As a retirement coach, my primary goal is to help people plan for a retirement with purpose. It’s about much more than just the finances, yet it’s the biggest hurdle many clients have, to see past the income, assets and pension calculations.
Which is why I was so fascinated to read a new study from researchers at Stanford University. On the face of it, the existing research examined by Jennifer Aaker, a marketing professor at Stanford Graduate School of Business, confirms how my clients think. It’s her own research that opens up a whole new question:
“Research has shown when people get wealthier, they experience greater happiness. But this research suggests that the nature of happiness also shifts based on income.”
Worldwide evidence base
The research team analysed dataset from over 500,000 people in 123 countries for patterns on the correlation between meaning and happiness at the level of income falls.
They found that, consistently across the world:
“Meaning is a stronger predictor of happiness for people with low incomes than those with greater financial resources … People with more money may be happier, but people with less money view happiness as tied to a sense of meaning — the belief that their life has purpose, value, and direction.”
Policy and well-being
The research was originally intended to inform policy makers when considering policies to help low-income communities. The authors suggested that where mental health interventions were usually focussed on encouraging people to talk through their emotions, the “angle” of meaning could be a new way to engage with these communities.
How to add meaning if you’re wealthy
Wealthy people can learn from the conclusion that having meaning in your life can prolong your sense of well-being too. I was very encouraged to read the research’s finding on one of our 7 core elements in a purposeful retirement: giving something back.
The researchers suggest that if your life/retirement has lost meaning, it can be restored through volunteering, doing charity work or contributing to improve your local community.
“Lacking a sense of meaning is not irreparable: People seeking more meaning in their lives can proactively choose to look beyond themselves and give more to others.”
Which comes first, happiness or meaning?
The research could not say whether meaning makes people happy, or the other way around. However, they suggest that they are inter-dependent. As Aaker says:
“People who succeed in finding meaning experience both meaning and happiness, but those who can’t find meaning aren’t happy, consistent with other research.”
Why does low income equate to more meaning?
For anyone struggling to reconcile the truth that their modest income might affect their lifestyle in retirement, the team have encouraging words. The hypothesis is that having limits to your finances is both a practical and emotion strain. The need to understand that situation and make sense of it is a way to find meaning in life.
In contrast, those with more wealth don’t need to struggle so much. So they don’t need to examine their purpose so deeply. Hence, for them, the link between meaning and happiness is less apparent.
Aaker’s paper (free to download here) ends with a note of great optimism for anyone planning to build purpose and meaning into their retirement:
“Our results identify meaning as a source of happiness that is available to individuals across society at any level of financial means. As Nietzsche famously counseled, “He who has a why to live for can bear almost any how”.
Looking for help with your retirement planning?
I’m here to help. Why not join me (Paul Hammond) and a select group of about-to-take-the-plunge retirees on a free 60-minute webinar. Together we’ll explore exactly how to plan to retire with purpose. I’ll show you what areas to think about, share useful tools and exercises, and reveal why having a GAME plan is crucial.
If you like what you hear, you’re welcome to join my Retire With Purpose programme, or book some 1-2-1 coaching if you prefer.
Or you can take the information and do the planning yourself, incorporating crucial non-financial elements that will give your retirement meaning and purpose.
Act now for a better retirement