Retired Boomers, beware of how you spend your money! Perhaps, you feel like you’ve earned the right to splurge or don’t understand how quickly overspending can be for a retirement budget. The advice of Beck & Lenox Estate Planning and Elder Law, as well as a large number of financial advisors, states that there are several things Boomers really need to skip. This recent article, “8 Things Boomers Should Never Buy in Retirement,” from msn.com, explains.
Overpriced vacations. Most retirees hope to travel during their golden years. If it fits with their budget, that’s great. However, even if your nest egg boasts seven figures, a $50,000 around-the-world cruise every year will quickly empty even the biggest retirement accounts. This is an exaggeration, of course, but what is “overpriced” depends on your lifetime and your retirement funds.
Extravagant gifts. Retirees are often a little too generous with making gifts, enjoying seeing the next generation or grandchildren benefit from their largesse. However, too many gifts will empty the savings needed for a long retirement.
Unnecessary or Overly Expensive Home Renovations. There’s nothing wrong with occasionally upgrading your home if you plan to age in place. Putting in grab bars in showers, adding lighting, etc., will make your home safer and could enhance its resale value. However, is now the time to install the latest solar panel system or redo the kitchen with top-of-the-line kitchen appliances? It is probably not the best investment for your retirement budget.
Buying Discretionary Items on Credit. Most retirees live on a fixed income from Social Security and retirement or pension income. If they spend beyond those amounts, they’ll do so by going into debt. Credit card debt is very expensive and will drag down even the best-created retirement budgets.
Timeshare Vacation Homes. Traveling to another location for a few weeks or a month every year or trading with other time-share owners to go to different locations is very appealing. However, the reality is that timeshares are expensive and restrictive. They are not easily re-sold, rarely appreciate value, and have ongoing expenses. You’ll be better off taking traditional vacations.
Excessive Life Insurance. If you didn’t purchase life insurance in your 40s or 50s, by the time you reach retirement age, the cost of a new life insurance policy could prove to be prohibitively expensive. If your kids are grown, the mortgage is paid off and your retirement accounts are in good shape, this may be an expense you can skip.
Out-of-Network Medical Services. Medical expenses typically increase as we age. However, don’t spend more than you must. Most insurance plans charge more if you use a doctor or other healthcare provider who’s out of network, so it pays to find an in-network provider before undergoing any procedures.
Let Your Children Pay for Some Things. It’s natural to want to spend money on your family but be protective of your nest egg. Gifts are one thing, but paying for an adult’s cell phone bill, rent, or credit card debt will drain your resources fast.
Everyone’s financial situation is different, but remember that spending in some of these categories will likely cause more financial difficulties than you need. The best advice for most retirees is to stick to a budget, and don’t live beyond your means. It’s much harder to dig yourself out of a financial hole when living on a fixed income. Beware of how you spend your money, Boomers!
One of THE best things you can do for yourself is to make sure you have your estate plan in place. That way, whatever assets you do have, can go to the beneficiaries you have chosen upon your death. Your attorney can advise you on protecting some of those assets should you need long-term care in your last years. For information on Beck & Lenox’s services and to schedule a complimentary phone consultation with one of our attorneys, check out our website here.
Reference: msn.com (Aug. 18, 2023) “8 Things Boomers Should Never Buy in Retirement”