Money really does buy extra happiness in retirement, according to two-thirds of retirees.
Only one in three told a new study that a lack of cash does not stop them living the life they dreamed off in retirement.
And one in eight confessed a shortage off money limited their lifestyle choices after they gave up work.
The conclusion is everyone should start saving as much as they can as soon as they can if they want to enjoy life to the full in their later years.
The study, by the Irish Longitudinal Study on Ageing (Tilda) from Trinity College Dublin, spoke to 8,000 over 50s about their retirement.
The overwhelming result was those with higher incomes enjoyed a better lifestyle regardless of how much money they had before retirement.
Quality of life increases with money
The research also revealed that all aspects of quality of life increased consistently with household income.
A fifth of those with the lowest retirement incomes confirmed a shortage of money regularly stopped them doing what they wanted, compared with 3% of the wealthiest.
The study also looked at income replacement rates – the amount of money someone has in retirement compared to what they earned before giving up work. The average rate was 51.4%, meaning someone with an income of £1,000 a month before retirement typically has £514 after giving up work.
Dr Irene Mosca, a Tilda research fellow and lead author of the report, said: “The finding that shortage of money does not seem to be an important issue for the majority of retirees might be attributable to the fact that consumption patterns do change over time.
Fewer financial commitments
“Compared to when in employment, retirees are more likely to have more time to shop around, to have paid off their mortgage, to have fewer dependents and not to have to save extra for their retirement. ”
The university expects to carry on the report to provide better comparison figures in future years.
“Overall, the findings of this report suggest that it is the income that people are on, pre and post retirement that affects their quality of life, not the rate at which their income changes,” said Dr Mosca.
“It is important to note, however, that a limitation of this analysis is that it only examines follow-up after retirement of up to a maximum of 2 years.
“More waves of Tilda will inform if these relationships between income and quality of life and replacement rates and quality of life are sustained over time”.
