The Secret to a Happy Retirement

You think your retirement prospects are grim? Consider the plight of 19th-century Americans, as outlined in Joanna Short's "Economic History of Retirement in the United States":

Ransom and Sutch and Sundstrom and David hypothesize that in the 19th century, men typically used the promise of a bequest as an incentive for children to help their parents in old age. As more opportunities for work off the farm became available, children left home and defaulted on the implicit promise to care for retired parents. Children became an unreliable source of old age support, so parents stopped relying on children -- had fewer babies -- and began saving (in bank accounts) for retirement.

So there it is, the secret to a happy retirement: Have fewer kids.

The future ain't what it used to be
All kidding aside, four generations ago, retirees saw a crisis and met it with a solution: saving.

That's not so different from today's would-be retiree. As pensions become less reliable, and with Social Security's fate in the hands of politicians, the traditional three-legged stool of retirement is becoming less sturdy.

What's more, according to the Center for Retirement Research, nearly half of working households will need to ratchet back their lifestyles during retirement. "The reason for this gloomy picture is a rapidly changing retirement landscape defined by a rising Social Security retirement age, a sharp decline in traditional pensions coupled with modest 401(k) balances, low savings rates, and longer lifespans."

Old-school retirement planning
As Motley Fool Rule Your Retirement advisor Robert Brokamp has said, "Of all those factors, you have complete control over just one, your savings rate, and a good deal of control over another, your 401(k) balance."

Which is to say: Take a cue from our ancestors and focus on what you can do about retirement. Put simply, "Save more, invest wisely, and take control of your financial future," Robert says.

Again, that's:

1. Save more.
2. Invest wisely.
3. Take control of your financial future.

Invest wisely ... in the right stocks
"Save more" needs no explanation. To "invest wisely," you need to own the kinds of companies you can hold during your golden years. Robert has called dividend payers and their inflation-beating income potential the right stocks for retirement. They make even more sense for folks who one day want to retire (everyone), because the power of reinvesting dividends over time really adds up.

I've presented seven established stocks that fit the profile (not formal recommendations but ideas for further research). Each company has a dividend greater than the market average and comes with low levels of volatility:

Take control of your financial future
Get educated. Crunch your numbers. Save and invest. That's the secret to a happy retirement -- being prepared.

There's a lot more to owning your financial future, though, which is why I encourage you to test-drive our Rule Your Retirement service. A trial is free for 30 days and gives you access to Robert's retirement-planning primer, "How to Plan the Perfect Retirement," as well as specific stock recommendations, asset-allocation tips, withdrawal rates, and more. There's no obligation to subscribe. Click here for the details.

Brian Richards owns shares of 3M, which is an Inside Value recommendation. Dow Chemical is an Income Investor selection. The Motley Fool has a disclosure policy.