4 Money Splurges You’ll Never Regret in Retirement
Written by
J. David Herman
Edited by
Rebekah Evans
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Not all money splurges during your retirement are created equal.
For retirees lucky enough to occasionally spend a chunk of money they hadn’t planned on spending, out of funds that may have been earmarked for elsewhere, it’s worth considering the “possible regret” factor. It’s also worth remembering that “splurging” is not inherently bad and can be a significant joy-booster during retirement, experts say.
“‘Splurging’ gets a bad connotation,” said Tim Miller, a financial advisor with Quaker Wealth Management. “You could view it as smart expenditures.”
The amount of spending that constitutes a “splurge” is also relative.
“The amount of a splurge varies widely and is relative to personal wealth,” said Wendolyn Forbes, a certified financial planner (CFP) with Wealth Transition Finance, a member of Advisory Services Network, LLC. “For example, spending 5% of one’s retirement savings might mean $5,000 for one retiree or $50,000 for another retiree, but each splurge is impactful.”
Forbes and Miller are largely aligned on splurges that they rarely see retirees regret purchasing. They include the following:
Splurges on Your Health
Calling them “splurges” might be a stretch in some cases, but experts tout the benefits of health-improving expenditures that go beyond the basics. They add that health-related purchases don’t tend to fill people with regret.
The importance of proper levels of medical care was mentioned by Miller, but he also offered a lengthy list of other potential health boosters. It includes organic food, mental health care, hobbies, buying a new bike to stay active and even getting a new pet. Maybe you could get by with that old mattress, but if getting a new one could boost your sleep, it may be worth the expense.
Miller said, whatever helps you mentally and physically.
Splurges on Family
Trips to visit your children and siblings, large family get-togethers and celebrations of special occasions or providing support to loved ones during challenging times. For many retirees, these are top priorities and worth shelling out chunks of savings for.
“In my experience, clients rarely regret spending money on family-related expenses like traveling to support elderly family members or celebrate the births of new family members,” Forbes said.
She does advise caution when it comes to balancing requests for financial support from family members and spending money on yourself.
“It’s really important for them (the retirees) to have a really good relationship with their financial planner,” Forbes said. “Working with a planner gives you an opportunity to really talk through the pros and cons. Remind yourself that the person (the one requesting help) may have work opportunities that they aren’t doing, or there may be other avenues to explore.”
Adding to 529 plans, other education funds or helping family members in other ways can create a richly rewarding “living inheritance situation,” Miller said.
“While you’re still alive, you can see the positive impact those funds are having,” he said.
Splurges on Travel
For many financial advisors, nudging overly conservative retirees to spend some of their money is a significant part of the job. Travel is one area where some clients could use a gentle push.
“Make travel a priority, if that’s important to you,” Miller said. “‘Maybe it’s time to take that expensive trip to Italy’ is something we might encourage with clients.”
He also noted that those dream trips are rarely regretted, provided that you’ve crafted a strong financial plan and are revisiting it from time to time.
“Leisure travel represents another expense that clients relish in retirement,” Forbes said.
Splurges on Charitable Donations
How many times have you given thoughtfully to a charity, then thought afterward, “Well, that was a terrible idea”? Probably not many.
Forbes includes “splurges” to make charitable donations in her list of rarely regretted retirement moves. For some of her clients, it’s one of the best parts of yearly financial reviews.
“I have clients that always look forward to deciding which charities they want to donate their money to,” Forbes said. “It’s kind of cool, just seeing their excitement.”
Flipside: Splurges With High ‘Possible Regret’ Factors
Forbes has retired clients who have had bad experiences buying into properties with divided forms of ownership or use rights.
“While these clients have expressed frustration about the fees and booking problems, I have shared that these purchases may also present unique problems when it comes to estate planning,” she said.
“For example, often these properties are in different states and present unique challenges and costs that heirs do not anticipate during the probate process,” Forbes said. “For most folks, it may be better to avoid these types of properties altogether.”
Miller advised caution around items like fancy cars and boats, which can lose value rapidly and may stick you with high maintenance costs.
“Deprecating assets are sometimes a regret, especially if you don’t use them enough,” Miller said.
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