Whether because they feel like they’ve earned the right to splurge or because they don’t understand how problematic overspending can be for a retirement budget, there are several things Lynchburg 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.
Virginia 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. Find more life insurance considerations in our article, Should I List Beneficiaries on my Life Insurance?
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.
Paying for Your Adult Children's Expenses
It’s natural to want to spend money on your family, but be protective of your nest egg. Gifts are one thing, yet paying for an adult’s cell phone bill, rent, or credit card debt will drain your resources fast.
Everyone’s financial situation is different; however, remember that spending in some of these categories will likely cause more financial difficulties than you need. The best advice? Stick to your retirement 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.
Certified Elder Law Attorney Robert W. Haley
Certified Elder Law Attorney Robert W. Haley helps Lynchburg seniors plan wisely to both enjoy their golden years and ensure they protect their nest egg for the long term. Schedule a call with his team today to learn how to plan for financial wellness throughout retirement.
Reference: msn.com (Aug. 18, 2023) “8 Things Boomers Should Never Buy in Retirement”
