Planning For Early Retirement Makes Me Happy

In a recent issue of Money magazine, Walter Updegrave shared the results of a recent survey by insurer Northwestern Mutual and health education company LLuminari. It showed that people who perform financial planning tend to feel happier than those who don’t. The article is also online here – Save for tomorrow, be happy today.

You have to be a little careful in reading the diagram provided, and realize that there are separate components going on (the colors help):

Economists, psychologists and others who study happiness find that people who have a sense of control over their lives cope better with stress and live more happily, while those who feel powerless are more likely to be depressed.

Now correlation doesn’t necessarily mean causation. It could be that those who are happy are more likely to budget. But in general, I agree that consciously choosing how I spend and invest my money makes me feel in control of my future, which makes me happy. Realizing the abundance of choices and alternatives out there is one of the best things I’ve learned from blogging.

(It also helps keep my mind off of all the things I can’t control, like a bailout bill with $150 billion of pork attached. Wooden arrows? Nascar race tracks? How is this related at all???)


  1. Clog Money says:

    I wonder if that’s because they’ve already started saving. Having this nest egg makes you feel more secure in your finances and thus happier?

  2. Jeff Davis says:

    I would also say that setting a budget is just plain fun. It changes your point of view of money being a burden to a challenge and even a “hobby.”

  3. Yes, I totally agree with this. Saving for retirement has definitely kept me more cheerful and optimistic than anything else. First of all, you know you are doing the right thing for your future. On top of that, knowing that I had a substantial sum sitting somewhere has given me more confidence in general. I’m not fearful of being unemployed (maybe I should be more!), because I know I have a lot to fall back on. And, in my particular case, I’ve decided against an emergency fund, because I feel in the event of a real emergency, I could take out some of this money (albeit with penalties). In the event I lost my job, actually, I would first go to collect unemployment while looking for a new job. So I wouldn’t have to disturb anything right away. I sometimes think about changing careers too — and knowing that the money is available, makes me more relaxed and I don’t feel stuck.

    So planning for retirement has helped me in four ways; for retirement, for job confidence, as an emergency fund and for not feeling stuck. Totally worth the investment. Now if only the market would cooperate! I was much more “happy” this time last year, for sure.

  4. Realizing real estate long-term was a good investment, our first property purchased was a rental property which we like to keep through our retirement years as extra income. Our goal was to increase our cashflow and lower the actual tax per dollar we pay.
    Having tenants help pay for your mortgage and lowering your tax, makes us happy.

  5. Good post, I think essentially all problems can be traced to this fact, that the majority of the population in this world don’t have control over decisions to the extent that they are affected by them.

    Take capitalism for example, in capitalism, you will have more say over decisions if you are bigger or have more bargaining power, it doesn’t matter if you are adversely affected by decision, if you have no bargaining power, as most of the working class don’t, well that’s just “life”.

    An alternative I’m particularly interested in is parecon, which does propose for proportionate say over decisions to the extent one is affected by them, which I think would certainly make a lot of people “happier”.

    Now with politics, we have “representative” democracy, and we supposedly have “control” over decisions, but common, I mean effectively we know don’t, not after 9+ hours of work. Seriously. One has to be pretty hopeful and optimistic to think somehow they’ll just “represent” us? If participation in decisions empowers us and makes us happier, then I ‘d choose “council” democracy, where every adult member in society participates in the making decisions that affect them.

  6. I can’t believe the bill passed the House with all of that pork attached to it. I’m ashamed…it was completely unacceptable to attach pork to this type of bill. Politicians are corrupt. Taxes will inevitably increase. I’m going to be packing away all the money I can in my Roth IRAs to limit the affects of future tax hikes…..What’s wrong with our country?

  7. I think it is correlation, not causation. Right now, planning for retirement makes me very unhappy. 🙁

  8. Baughman, why would you keep shoveling your money into the stock market? Aren’t Roth IRA’s tied to its performance? I don’t really know since I don’t have one.

    It’s beyond me why anyone has there money there now. Perhaps they’ve already taken a 20% hit and imagine if they leave it in long enough they will get it back some day.

    Johnathan, what if you’d put all your money into high-interest savings accounts, spread around, two years ago? Where would you now be? I know you’d be ahead, that’s for sure. I think this would make an interesting thread topic. Thanks to sites like yours and I saw this coming. Just wondering why many here didn’t.

  9. Well, to be able to save money towards the future through something like a retirement fund implies that you have enough money to pay for most/all basic expenses and probably a little extra for fun, and then also have enough money to put towards the future.

    If you got your bases covered and some extra to throw around for investing for retirement, you have good reason to be satisfied! It’s a fairly comfy life, yeah?

  10. themarketinggal says:


    My bank,, does not provide loans such as mortgage loans. I called because I was worried about the current economy status, and they said that because they only are involved with personal and business accounts and do provide lending services, there is nothing to worry about because they do not provide loans as big as mortgage loans.

    I just wanted your advice on this comment. How reliable is it to not be worried about banks such as


  11. Just a few days ago a well known financial advisor said get mutual funds now. I don’t agree with buying (investing) necessarily now. Why not depend on building a savings wholeheartedly and I agree and believe we as Americans will start feeling better when we have a plan (on paper) for our families.

    Between the “rescue plan” (aaaggghh!) and the credit card industry who can we depend on but ourselves to look ahead and figure out how to create wealth.

  12. Very nice post, yes correlation seems much more likely. Those that take sensible steps with their retirement often take other sensible steps which are wise and make it easier to be happy.

    Payoffs to those that paid politicians in the bailout out bill are very related to the credit crisis. The politicians decisions to allow financial companies to risk the economy for big payments (from those companies to the politicians) is a big part of what required that bailout in the first place. So while not related, in the way you meant, it very related in showing that the politicians do not plan to in any way change their standard operating procedure. And since we will re-elect almost all of them it is pretty obvious we support the actions they take.

  13. Hey Jonathan,

    I know this is off-topic, but Id love to hear your opinions on the current market crashing. Are you holding, selling, buying in more or less than usual? I know you have a long, long-term outlook, but are you concerned at all that the DOW will take a long time to get back to 14k?

  14. “Wooden arrows? Nascar race tracks? How is this related at all???”

    I can’t speak to the Nascar issue, but the wooden arrows thing has been misreported.

    Spending bills must originate in the House. But the House flubbed its chance to pass the bailout. The Senate needed to act but could not introduce a bill from scratch. So they used a loophole. They took an existing bill they had already passed – the wooden arrows legislation, a very minor bill that had passed overwhelmingly – and tacked the huge bailout legislation onto it.

    IOW, the Senate had no interest in the wooden arrows. They just used the wooden arrows bill as a vehicle for the bailout, in order to get around the Constitutional prohibition against originating a spending bill in the Senate.

    No doubt there was lots of pork, but the wooden arrows were there for a different reason.


  1. Everybody Loves Your Money - Living for today - Planning for Tomorrow » Posts From Around the PF Blogosphere says:

    […] at My Money Blog has an interesting post about the fact that people who plan for their retirement seem to be a happier lot.  That doesn’t surprise me at all.  I know I feel a ton better when I’m in […]

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