Is this the best investment you can make for retirement?

If there was an investment you could make, which was very likely to bring you happiness in later life, and which cost very little, you’d be pretty keen to invest. 

The average person’s happiness tends to be U-shaped over the course of their life. Research by David Blanchflower, published in 2021 (Is happiness U-shaped everywhere? Age and subjective well-being in 145 countries) showed that it starts high in childhood, then declines in young adulthood and middle age (as job and care responsibilities crowd out time for more pleasurable activities), bottoming out at about age 50 before rising again into one’s mid-60s. But at that point, individuals tend to split into two groups: some who get much happier and others who become much unhappier.

And according to research, that divergence is not just chance, but rather the product of a lifetime of decisions. One 2001 study (“Successful Ageing” by Vaillant and Mukamal) found that there are seven major decisions that individuals can control to make it more likely they will be happier in old age:

  • Refraining from (or quitting) smoking
  • Avoiding alcohol abuse
  • Maintaining a healthy body weight
  • Prioritizing movement in daily life
  • Developing coping mechanisms (to deal with life’s inevitable distresses)
  • Engaging in continuous learning (which promotes an active mind in old age)
  • Cultivating stable, long-term relationships.

I doubt anybody will be surprised by the list. But I doubt many people were taught them in early life.

When people think about investing for retirement, the first thing that comes to mind is often saving money. But if our goal when investing is to give ourselves a better chance of being happy in later life, the research suggests that investing in our own physical and mental health might produce the best return.

Philip Wise |

Managing Director and Chartered Financial Planner

This guide is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.
The value of investments may go down as well as up and you may get back less than you invest. Past performance is not a reliable indicator of future performance.

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