Hello,

I hope you’re enjoying your Sunday.

In today’s issue:

• One big thing. Will you enjoy your retirement if you have enough money to be comfortable? Let’s find out together.

• You have to check this out. Winning the lottery.

Let’s get into it.

1️⃣ ONE BIG THING

Enjoying your retirement.

Today, I thought I'd ask you a series of questions.

First, give me your take on this: I am considering hiring a senior manager for my business whose name is Wendy.

Will Wendy be a good leader? She is intelligent and strong…

Wait, let me interrupt. I bet a preliminary answer has already come to your mind, and it is yes.

But you jumped the gun. What if the rest of my description was: She is intelligent and strong… and corrupt and cruel?

One thing I am nearly certain you did not do (despite your sharp and savvy ways) is ask: "What would I need to know before I formed an opinion about the quality of someone’s leadership?”

My certainty is based on mountains of research from the main character of many of my newsletters, Daniel Kahneman, the world-famous psychologist and winner of the Nobel Prize in Economics and Presidential Medal of Freedom.

The central premise of his book Thinking, Fast and Slow is that our brains run on two systems. System 1 is fast, intuitive, and always on—it makes snap judgments, recognizes patterns, and reacts instantly. System 2 is slow, deliberate, and effortful—it kicks in when you solve a tough problem, weigh decisions, or override a gut reaction.

System 1 handles most of life automatically, while System 2 steps in when deeper thinking is needed. But because deeper thinking burns precious mental energy, System 2 often defaults to System 1's quick answers—even when flawed.

Regarding your reaction to Wendy's leadership potential, Kahneman says:

"System 1 got to work on its own from the first adjective: intelligent is good, intelligent and strong is very good. This is the best story that can be constructed from two adjectives, and System 1 delivered it with great cognitive ease”.

What you see is all there is.

If you'll pardon me for a moment, I am going to take a short break to get some coffee. ☕

While I am away, you will be in Kahneman’s capable hands. He can tell you about all of this more eloquently than I can:

“Jumping to conclusions on the basis of limited evidence is so important to an understanding of intuitive thinking and comes up so often in this book [Thinking, Fast and Slow], that I will use a cumbersome abbreviation for it: WYSIATI, which stands for what you see is all there is. System 1 is radically insensitive to both the quality and the quantity of the information that gives rise to impressions and intuitions.

“The confidence that individuals have in their beliefs depends mostly on the quality of the story they can tell about what they see, even if they see little. We often fail to allow for the possibility that evidence that should be critical to our judgment is missing—what we see is all there is.

“It is the consistency of the information that matters for a good story, not its completeness. Indeed, you will often find that knowing little makes it easier to fit everything you know into a coherent pattern.

“WYSIATI facilitates the achievement of coherence that causes us to accept a statement as true. It explains why we can think fast and how we are able to make sense of partial information in a complex world. Much of the time, the coherent story we put together is close enough to reality to support reasonable action.

“The combination of a coherence-seeking System 1 with a lazy System 2 implies that System 2 will endorse many intuitive beliefs, which closely reflect the impressions generated by System 1. Of course, System 2 also is capable of a more systematic and careful approach to evidence, and of following a list of boxes that must be checked before making a decision—think of buying a home, when you deliberately seek information that you don’t have. However, System 1 is expected to influence even the more careful decisions. Its input never ceases.”

OK, I’m back. Thank you, Mr. K.

Wasn’t that worth it? You might even reread it. Fully processing this idea will help you make sense of all sorts of puzzling aspects of life.

Enjoying your retirement.

OK, let’s get to another question:

Will you enjoy your retirement? You’ll have enough money to be comfortable.

Based on that information, as before, an answer has already come to your mind: yes.

If I have enough money to be comfortable, retirement sounds like it will be all kinds of enjoyable.

No more work. Oodles of free time. No more waking up early. No commuting. No work stress. No meetings. No need to finish that TPS report. Unencumbered freedom to get into birds.

What’s not to like? If the money part is sorted, I'll enjoy the heck out of my retirement.

Can you hear Kahneman’s voice in your head yet?

“We often fail to allow for the possibility that evidence that should be critical to our judgment is missing—what we see is all there is.”

I will enjoy my retirement if I have enough money to be comfortable is a totally coherent story. It is also perfectly consistent with everything we hear about planning for retirement: invest early and wisely so you have enough money to retire comfortably.

When people think about retirement, it is almost entirely about money. If that feels like a bold statement, let me try to back it up.

One of my favorite ways to understand what people are curious about is to analyze Google search terms.

I looked at Google searches in the US between January – December 2024. Google identified about 700 search terms related to retirement. Taken together, people ran these retirement-themed searches over 7 million times a month (84 million searches in a year). For example, people search "Roth IRA" an average of 368,000 times a month (the most frequent search).

Of the 700 search terms used, 94% pertained to retirement's financial, legal, or technical aspects.

Of the 7 million searches done monthly, 98% are about money.

The most popular non-financial keyword I could find was "happy in retirement," which was searched 18,100 times a month. That's not bad, but it represents 0.25% of all retirement-related searches.

Hawaii versus Michigan.

Another question:

Do you think you would be happier living in Hawaii or Michigan?

Here we are again. An answer quickly came to mind, and it was Hawaii—and not just for my friends who went to Ohio State.

Why? Hawaii has rockstar year-round weather compared to Michigan. Today’s high is 73, and the low is 61 in Maui. Come on.

My boy Kahneman researched this question, too. Well, he actually explored if people think they will be happier living in California than Michigan. (Does Living in California Make People Happy?)

Kahneman and his team surveyed people living in California, Ohio, and Michigan. They asked people in all three states to predict how someone “with your interests and values” who lived elsewhere would complete the same life satisfaction questionnaire.

People from all three states predicted that California residents would be happier.

However, when the researchers analyzed participant’s actual life satisfaction scores (not the predictions), they found happiness did not vary at all between the states. People in the Midwest were just as happy as those in California.

What’s going on? When asked to compare the likely happiness of people living in California and Michigan, what do you do? You think of weather. You conjure images of seaside hikes versus snow shoveling.

WYSIATI… what you see is all there is. If asked to compare life in two places that differ primarily in terms of weather, your System 1 brain system creates a cohesive and credible story that life satisfaction must be higher in California. It just makes sense.

But most of our daily living experiences do not concern the weather. We are at work, in relationships, attending social events, are healthy or unhealthy. These and many more things influence actual life satisfaction.

In behavioral science, this phenomenon is known as attention bias, “a cognitive phenomenon where individuals focus on certain aspects of a situation while disregarding other, potentially important information.” Kahneman referred to this idea as the focusing illusion.

There is a lot of information available on any given topic. However, System 1 thinking is not interested in “a lot of information”. It is interested in making quick sense of complexity and crafting a coherent story.

Would I be happier in California or Michigan? Well, the weather in Michigan sucks, so my answer is California. Problem solved. Can I get back to the game now?

Enjoying your retirement – take deux.

OK, last question:

Will you enjoy your retirement? You’ll have enough money to be comfortable.

Really, that one again?

By now, I know you can see the problem. My question has biased your answer by drawing specific attention to the financial aspects of an enjoyable retirement.

But it's not just my question framing. As you saw from my assessment of Google searches, when people think about retirement, they only think about money. 

Is having enough money to be comfortable in retirement important to enjoying your retirement? Of course. I haven’t lost my mind. It is foundational and essential.

But jumping from “I will have enough money to be comfortable” to “I will enjoy my retirement” is like thinking you’ll be happier living in California—an attention bias / focusing illusion trap.

“Ask any retiree, and they will likely tell you that is only half the story,” says Jacob Schroeder of Kiplinger. “You’ll need enough money to get by, of course, but you don’t have to be super wealthy to be happy. In fact, life satisfaction tops out at an annual salary of $75,000, on average, according to a 2022 study by the University of Pennsylvania’s Matthew Killingsworth.”

Does the combination of retiring (not having to work) and having enough money to be comfortable equate to enjoying your retirement?

This is a question I will dig into more in future newsletters, but let me leave you with a few stats.

Enjoying your retirement is not a given

Why 28% of Retirees Are Depressed

• 28% of retirees suffer from depression. This compares to 18% of the US population as a whole, which includes retirees, though I am unsure if the methodology allows for a proper comparison.

• Retirement increases the probability of depression by 40%. 

• For some, retirement diminishes well-being by removing a large portion of one's identity. For years, your job was an easy answer to the frequent question, "What do you do?". With retirement, that identity is gone.

• When people have spent most of their time fostering relationships with co-workers at the expense of people outside the workplace, there is a natural sense of isolation following the move into retirement.

2024 MassMutual Retirement Study:

• Although pre-retirees had envisaged an active retirement lifestyle with travel and exercise at the top of their lists, 83% of current retirees reported watching TV as their top activity.

• In preparing for retirement, current retirees focused on their finances more so than health or social connections:

  • At least five years prior to retirement, retirees most often said they were preparing by contributing money to a retirement account (64%), increasing their savings (60%) and paying off debt (53%).

  • Fewer retirees made efforts to take care of their health (39%) or reach out to old friends or make new friends (7%) in the years leading up to their retirement.

Thank you for reading each week.

See you next Sunday.

BONUS CONTENT

This bonus content was added to provide further detail on some topics after this newsletter was distributed. DISCLAIMER: The bonus content section was initially drafted using AI tools, then edited by me. My primary newsletter, as sent by email to subscribers, is all 100% written by me.

Retirement planning is not financial planning.

Retirement planning focuses on long-term financial security specifically during retirement, while financial planning centers on current finances and short-term needs. A comprehensive retirement plan complements a financial plan, outlining how to manage savings and investments tailored for retirement.

Having both financial and retirement plans is crucial because they work together to ensure a sustainable income throughout retirement. Financial plans help establish budgets and savings, while retirement plans outline how to use those resources post-retirement.

However, a significant portion of individuals focus solely on financial aspects for retirement, with only 35% addressing emotional and lifestyle considerations.

“My concern is that we’ve got a group of soon-to-be retirees who have been saving, investing, and doing everything right. Yet, they are so riddled with worry about the future that they miss out on living their lives,” says Roger Whitney.

If You Live to 100, You’ll Need More Than Money

Financial resources alone may not sustain a fulfilling life in retirement; emotional and social well-being are equally important. Longevity underscores the need to develop hobbies and maintain relationships, which contribute to overall happiness.

As you plan for a long life, consider what will truly bring you joy and fulfillment. Just having extra money won’t be enough if you lack the emotional and social pillars that support a happy, healthy life.

Diversify your retirement planning to include not just financial stability but also activities and relationships that enrich your golden years.

Eight Ways to Enjoy Your Retirement

Maintaining good health is crucial for enjoying retirement and can be achieved through exercise and a healthy diet. Continual learning is essential for cognitive health and can help delay cognitive decline in older adults.

Here are eight ways to enjoy your retirement more

1. Stay Physically Active: Engaging in moderate-intensity physical activity, like walking or swimming, can improve both physical and mental health.

2. Foster Social Connections: Strong social ties can reduce loneliness and improve overall well-being.

3. Keep Learning: Lifelong learning keeps the brain sharp and can delay cognitive decline.

4. Practice Gratitude: Keeping a gratitude journal can enhance life satisfaction and outlook.

5. Spend Time in Nature: Outdoor activities can relieve stress and improve mood.

6. Find a Sense of Purpose: Having clear goals can provide direction and purpose.

7. Mentor and Share Wisdom: Mentoring others can offer a sense of legacy and fulfillment.

8. Train to Stay Optimistic: Studies show that simple, low-cost exercises can foster a more optimistic mindset.

By incorporating these habits into your daily routine, you can significantly enhance your retirement life, ensuring it is not just comfortable but also deeply fulfilling.

Work hard at staying healthy

Regular physical activity is important for retirees to maintain health and well-being. Aim for at least 150 minutes of moderate-intensity physical activity each week, such as walking, swimming, or playing golf.

Establishing a structured exercise routine can help retirees gradually increase their activity levels and achieve their physical activity goals. Staying physically active not only improves physical health but also enhances mental well-being, making it a cornerstone of a happy retirement.

Incorporating physical activity into your retirement routine can enhance both physical and mental health. The benefits of staying active extend beyond the body, positively impacting overall well-being and quality of life.

Invest time in strong social connections

A strong social life during retirement reduces loneliness and negative emotions, offering companionship and support. A robust social network fosters independence by providing needed support. Participating in group exercises or classes can help prevent feelings of loneliness and encourage individuals to seek social support.

Social activities are linked to a reduced risk of cognitive decline in older adults. Joining clubs, participating in community events, and interacting on social media can help retirees stay connected with old colleagues and new friends.

They never stop learning

Lifelong learning involves the ongoing pursuit of knowledge and skills. Lifelong learners see learning as fundamental to life and experiences. Professionally, this can mean obtaining further education like graduate degrees or certifications.

Continually acquiring new skills and knowledge keeps your mind sharp and delays cognitive decline. Whether it’s learning a new language, picking up an instrument, or mastering a new skill, stay curious during your retirement years.

Practice gratitude

Practicing gratitude enhances mood and outlook. It can lead to better exercise habits, fewer illness symptoms, enhanced life satisfaction, and reduced materialism. One effective method is keeping a gratitude journal, which is associated with greater self-esteem, better sleep, and improved heart health.

Noting daily gratitudes can effectively uplift your mood during significant life transitions, including retirement. Regularly practicing gratitude helps maintain a positive outlook, allowing you to enjoy life more fully in your golden years.

Spend time in nature

Spending time outdoors significantly improves physical health and offers numerous physical benefits, health benefits, and other benefits. Engaging with nature boosts positive emotions and reduces stress, fear, and anger. Activities like brisk walking, hiking, or running in nature combine exercise with outdoor benefits.

Exploring nature themes in writing can inspire and promote relaxation. Spending free time in nature relieves stress and improves overall well-being, making it essential for a happy and healthy retirement life.

Happy retirees find a clear sense of purpose

Fulfillment in retirement comes from aligning passion with purpose, not just financial stability. With increased life expectancy, retirees should plan long-term for a fulfilling retirement. Engaging in volunteer work can enhance mental and physical health, contributing to a sense of purpose.

Continued education is vital for retirees as it fosters mental and emotional well-being and supports cognitive health. By finding a clear sense of purpose, retirees can enrich their lives and maintain a positive outlook during their golden years.

Finding purpose through work

Retirees often seek a sense of purpose in their lives by engaging in work. This can provide them with fulfillment and structure in their daily routine. According to the Pew Research Center, individuals over the age of 75 represent the fastest-growing age group in the workforce. Their numbers have quadrupled since 1964, and it’s estimated that the number of older working Americans will double over the next decade. This rise is partly due to a higher cost of living and the desire to continue working.

Currently, about 19% of individuals aged 65 and older are in the workforce, seeking jobs with reduced physical demands, greater independence, and more flexible working conditions.

Whether it’s a part-time job, becoming a substitute teacher, or pursuing new interests, older adults today generally possess higher education levels compared to previous generations, which correlates with increased employment opportunities.

Set goals and projects

Setting goals after retiring is crucial to avoid losing a sense of purpose. Goal-setting provides direction, increases productivity, and boosts motivation during retirement. Identifying your motivations enhances this process.

Consider creative projects like mapping your family tree, building a shed, or planting a vegetable patch. Making a list helps focus on your aims and schedule time to achieve them.

Setting clear goals and projects helps maintain a sense of purpose, leading to a fulfilling retirement life.

Mentor and share wisdom

Mentoring others during retirement fosters a sense of legacy and fulfillment. It helps retirees find purpose and impact their community. Programs like AmeriCorps and Big Brothers Big Sisters of America provide avenues for engaging in mentorship.

Sharing professional expertise through mentoring significantly contributes to the growth of younger individuals. Retirees can mentor others by imparting essential life skills for navigating daily challenges.

Engaging in purposeful activities keeps retirees active and allows them to share their wisdom and skills with others.

Train your brain to be optimistic

Believe it or not, optimism is a trait anyone can develop. Studies show that simple, low-cost exercises can foster a more optimistic mindset. One effective method is consciously reframing situations to view them positively. Over time, this rewires your brain to think positively. Negativity can spread easily, so it’s important to be around optimistic individuals and take breaks from the news.