Midlife pressures: Understanding the U-shaped happiness curve and how to feel (and do) better

It is easy to assume that financial confidence increases over time. You make more money as you get older, after all. However, the opposite seems to be true. Recent research suggests that financial stress — not confidence — increases as we age, peaks in midlife, and then improves during our 60s.

This financial stress may be the root cause of your midlife crisis.

The U curve of financial confidence and happiness

If you were to illustrate financial confidence across generations, you would see that the results are U-shaped. Confidence and happiness are highest in the early and late stages of life, and lowest in the middle. In fact, financial confidence reaches its lowest levels in your 40s and 50s. (Learn more about the ages you’re happiest.)

Feeling bad in your 40s and 50s doesn’t make much sense right away. Most people have families, make money, own a home, etc… However, it may be those obligations that cause stress.

Research has found that confidence in your financial situation is directly related to the number of obligations you have at a given point in life. The maximum number of commitments usually occurs in middle age. This is a period when things like home loans, weddings, children, education, elderly parents, and health care compete for your time and money.

With these expenses in mind, it’s no wonder workers ages 45 to 54 feel overwhelmed and are among the least confident about their retirement finances.

These financial pressures can easily contribute to a midlife crisis as described in an article in The Atlantic, “The true roots of the midlife crisis“.

8 Ways to Find Happiness and Financial Confidence in Midlife

So the midlife crisis is real, and may have its origins in financial crisis fatigue.

Here are 8 things you can do to overcome feelings of financial stress:

1. Create a financial plan

I want to:

  • Do you feel more confident about making your financial decisions?
  • Save more money?
  • Make more progress towards financial goals?

Create a financial plan! It is the lack of knowledge that creates stress.

Researchers I have found that people who have a financial plan feel more confident and have better financial results.

“When you’re worried about your money, you have to actually face your financial situation, look at it and have a plan,” says John Sherman, a financial advisor at Sausalito, Calif.-based IV Lions, LLC, a firm that primarily serves clients in the area. San Francisco Bay.

The new Retirement Planner makes it easier to create your own plan. Be organized. See where you stand. Find ways to optimize your time, savings, taxes, income, insurance, and more.

2. Find out how much savings you will need

In middle age, retirement looms. Maybe you’re excited about it, but you’re also worried about whether the amount you’ve saved is enough.

Your fears are completely normal, but there are ways to quell those fears and help with peace of mind.

Some people say you should have about 1.4 times your annual salary set aside when you’re 35, 2.4 times when you’re 40, and 3.7 times when you’re 45. When you reach 50, you will need 5.2 times your annual salary saved.

However, these are just guidelines and may or may not apply to you. The only way to know with confidence how much you really need to save is to create a detailed retirement plan.

3. Prioritize saving over other commitments

Yes. There are a million different ways you can spend your money in midlife, and it’s exhausting.

You won’t get rid of stress just by worrying. You need to set priorities.

Most financial planners suggest that you choose retirement savings as your priority.

  • There are loans for college, and nothing for retirement.
  • Weddings and vacations last only a day or a few weeks. Retirement is often 30 years or more.
  • Paying off debt is important. But it’s not as important as accumulating retirement assets.

“You’re in a race to get to the retirement finish line,” Sherman says. “You should be able to save as much as you can by the time you turn 50.”

4. Increase your savings when the children leave home or when you get out of debt

Your financial obligations are at the limit now, but this is good news for your future. Financial pressures will ease soon. Just think about the improved cash flow when your children become financially independent and debts are paid off.

However, instead of boosting your lifestyle when you retire from a financial obligation, boost your savings rate.

Learn more about saving more when kids fly the coop.

5. Choose to thrive in midlife

Beginnings are exciting. The ends are the middle goal? No one really waxes poetic about psychics.

Brokers are where all the work happens. They’re also where life really happens. Therefore, it is especially important to choose success and make the most of this time.

Explore 8 ideas on how to find success in uncertain times of middle or transition.

6. Make friends with your future self

research It suggests that our brains naturally process our futures as strangers. And let’s face it – you’re unlikely to be saving for retirement expenses or taking care of a stranger’s body. It turns out that by envisioning your future self and “getting to know” that person, you’re more likely to take steps now to care for that future version of yourself.

Whether you’re 40 and hoping to retire in 30 years or if you’re 67 and hoping to have enough resources to finance the rest of your life, here are 7 ways to envision your future so you can create and achieve a truly effective plan:

7. Try a sabbatical or mini-retirement

Think again if you think retiring at 50 is impossible.

Sure, you probably can’t leave work forever, but maybe you can “try” retirement and see how you feel.

More and more people are doing mini-retirement by taking a month or a year off from work. Some temporary retirees choose to spend time with family, others pursue a hobby, while others explore alternative work arrangements, or a second career.

Learn more about sabbaticals and mini-retirement.

8. Avoid the issue and expensive sports cars

Look, if you’re already feeling the financial strain, I have some news for you: The tropes of midlife crisis — sports cars and divorce — are sure to make things worse.

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