Relative Non-Labor Income and Retirement Satisfaction

This study examines the role of non-labor income relative to net worth and its association with retirement satisfaction. Using panel data, the authors construct a log-transformed measure of non-labor income relative to household net worth and evaluate its relationship with self-reported retirement satisfaction. The results indicate that retirees with a higher relative proportion of stable non-labor income, measured as Social Security, pension, and annuity income, report significantly greater retirement satisfaction than retirees who rely more heavily on asset decumulation to finance consumption. Supplementary analyses using alternative wealth denominators and fixed-effects specifications yield substantively similar results, reinforcing the robustness of the central association. Collectively, the findings suggest that the predictability and structure of retirement income, rather than wealth alone, play an important role in shaping subjective well-being in retirement. These results have implications for both retirement planning and public policy by highlighting the value of strategies that strengthen lifetime income stability and reduce late-life financial uncertainty.