These folks don't have time to focus on the "retirement crisis". Image source: Getty Images

On paper, the future looks absolutely frightening for America's retirees: Fifty percent of baby boomers have less than $100,000 saved for retirement, medical costs have grown rapidly, and a cloud of doubt hangs over Social Security.

But there's a funny thing about how things should be on paper, and how they actually play out in the real world. Often times, they not only don't match -- they exist on opposite ends of the spectrum. That's the case with America's so-called "retirement crisis."

How do I know that? Because researchers have actually gone out and asked retirees how they feel about retirement. The resounding answer: Great!

The truth about well-being in the Golden Years

In 2016, Merrill Lynch and Age Wave published a piece titled "Leisure in Retirement: Beyond the Bucket List" (links to a PDF). The survey was representative of the country on every variable -- age, gender, ethnicity, income, and geography -- and it included focus-group responses as well. When asked about the most basic emotions that combine to make us who we are and how we feel, this is what respondents of all ages had to say.

Create column charts

Data source: Merrill Lynch/Age Wave

This data flies directly in the face of everything we might believe about Americans in retirement. That's because the authors found that there's something far more consequential to our happiness than financial affluence, and that was "time affluence."

Writing on the benefits of this phenomenon, the authors wrote:

As retirees move from work into retirement, nine out of 10 (92%) say retirement gives them greater freedom and flexibility to do whatever they want -- and on their own terms. ... [R]etirees say they are able to create their own schedules, open a business, sleep in, exercise more, get to know their grandchildren better, fall in love again, travel, read more, unplug, volunteer, learn a new skill, and try lots of things that they could previously only dream about. And nearly all retirees tell us that freedom and flexibility increase, regardless of how much money they have. [Emphasis added.]

This jibes perfectly with what my friend Morgan Housel wrote back in 2014: "Having control over your time is the only sensible financial goal."

But seriously, how can this be?

Since the birth of positive psychology in the late 1990s, one of the key findings that researchers have repeatedly found is that we are usually pretty darn bad at predicting what will make us feel content -- over the long run. In 2008, Sonja Lyubomirsky, a psychology professor at California-Riverside, wrote a summary piece on everything the evidence shows in The How of Happiness.

The data points to some pretty surprising conclusions, the most striking being "The 40 Percent Conclusion." In effect, this states that 50% of our own levels of happiness, contentment, and general well-being are determined by genetics. That's not that surprising, given what we know about heredity. But it's how the other half of the pie -- what we actually have some control over -- that was shocking.

Data source: The How of Happiness. Author's illustration.

When we talk about "life circumstances," that includes "whether we are rich or poor, healthy or unhealthy, beautiful or plain, married or divorced,"  and, I would add, sitting on a large nest egg or not.

What kind of intentional activities make up the other 40%? Lyubomirsky is clear that different activities will work for different people, but the core activities include:

  • Practicing gratitude and positive thinking.
  • Investing in social connections.
  • Coping with tough times.
  • Living in the present.
  • Committing to meaningful goals.
  • Taking care of both your body and soul.

On the surface, this might seem obvious. But as soon as dollars and cents are introduced, our focus goes there. It's far easier to measure, and the steps to get more are pretty clear. But the overall results from pursuing this path are underwhelming.

That's why what's on paper doesn't match real life: What's on paper isn't measuring the most important stuff.

Where we come in

We here at The Motley Fool are here to help the world invest -- better. Often times that means money, but it can also apply to how you invest your time. Most obviously, we can help you with that 10% of life circumstances. And, we hope, by doing that, you'll be freed up to focus on what really moves your happiness needle -- before and during retirement.