Behavioral science offers hints about maximizing your retirement spending to get the most happiness out of it. “Hedonomics” applies economic science to the study of happiness, and it provides interesting ideas you can incorporate into retirement planning. If you want to squeeze more pleasure from retirement, you may need to mix up the payout schedule.
People feel happier when rewards change over time, especially when the rewards increase. So if you use an annuity and Social Security to provide regular income every month, you could include a scheduled withdrawal from a retirement account in certain months. This would allow for extra spending for a summer vacation or holiday season indulgence. The payout schedule would return to normal in the following months.
The Wall Street Journal article also discusses the potential to individualize retirement plans with digital tools, just as subscription streaming services personalize our feeds according to our favorite shows. These plans could break up the fixed income monotony. More study needs to be done, but the future of retirement looks broader with the technology now available.