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6 Top Retirement Investments Not About Money

Philip Moeller

Being obsessed with having enough money for a comfortable retirement seems like a national pastime. Almost daily, we are bombarded with worrisome messages about running out of money in our later years. From there, it's a short hop to living in unappealing senior housing, hoping our resentful children will keep paying our bills and occasionally visit.

While money is certainly important to personal security, the things it can buy are only part of a successful retirement, and often not the most important part. More money may give us a sense of satisfaction, especially as we compare our relative income to what other people make. But Daniel Kahneman, who won the Nobel Prize for his work on behavioral economics, says that after about $75,000 a year, additional income does not "buy" us any more happiness.

Social scientists have researched human activities and aspirations that are more deeply associated with wellbeing and happiness. None of them are surprising. But in thinking about the kinds of investments that may produce the greatest returns as you get older, here are six you might want to consider:

Friendships. Human relationships are at the top of the list of things that make life worthwhile and enjoyable. A good friend is a partner in many activities, a sounding board for your own experiences, and often a confidant for personal matters that you need to share. As we get older, friends and family tend to move away or, in later years, pass away. Women are society's heavy lifters in terms of building and maintaining relationships, while men living alone experience more isolation and adverse health effects. Thinking about the number and health of your relationships is every bit as important as making sure the investments in your portfolio are properly diversified and performing well. Seek out younger friends. Try to develop friendships with diverse people who have lots of different interests.

Social networks. Friends become cornerstones of a person's social network. But the benefits of being richly connected to other people and interests go well beyond friends and family. Most people are truly close to only a handful of other human beings. But we come into contact with many other people in our daily lives. Even incidental contact with strangers can bring happiness. To benefit from this mix of strong and weak personal ties, you have to be "out there." But over time, the routines of family and work may yield to less structured retirement activities, and our social networks can shrink. It's important to continue being out there--to join new organizations, to participate, to try new pursuits.

Volunteering. Doing something for another person, either directly or as part of a group activity, adds tremendous value to our sense of self-worth. The kind of purpose you may have once felt in your work can be replaced with volunteer work. Many people volunteer to find or maintain valuable friendships and for other social benefits. Interestingly, these people are more likely to stick with volunteering efforts than people who are motivated solely by a desire to make the world a better place.

Learning. Among all the attributes associated with longevity and well-being, education is at the top of the list. Some research has found that the benefits of education stem entirely from the higher incomes that more educated people earn. But other research finds strong signs of non-financial benefits as well--better coping skills and knowledge that leads to making better decisions, particularly about physical health and well-being. Continuing to learn new things in older age is also crucial. Our minds are mental muscles that like to be engaged and challenged. Being mentally active not only brings direct satisfaction but is also associated with better health.

Values. People tend to tell scientific researchers that they most value helping others, making the world better, becoming better human beings, and other intrinsic goals and values. Then they turn around in their real lives and focus on making more money, emphasizing their physical appearance, seeking social status, and other extrinsic values. Most people share both sets of values, but those driven more by intrinsic motives tend to be happier.

Wellness. This is such a no-brainer, I almost hesitate to include it. Yet even a cursory look at American lifestyles shows that we take poor care of ourselves, cutting short our lives and running up enormous healthcare bills for ourselves, our families, and society. Such behavior can cancel much or all of the amazing longevity gains we've achieved during the past century. What a shame. Physical and mental exercise, along with a good diet, are seen as increasingly linked to avoiding or at least deferring many infirmities and chronic diseases of old age, including Alzheimer's.

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