You’ve done it: After decades of waiting, your retirement is here and you’re gonna meet it head on. Yet depending on how you look upon your precious nest egg, that could mean using your head — or losing it.
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Make no mistake, big money purchases often feel like the reward for many years of hard work. If you want to tour North America in a brand-new RV, good for you. But once you tack on a pool, six cruises and a lavish wedding for your kid, it may not belong before debt and regret set in.
That being said, living frugally for decades can be exhausting. Frustrating. Who’s to stop the person who’s finally retired from splurging?
But if you want to ensure your retirement funds last, you’ll need to be a bit choosy about those splurges.
Before you start swiping your plastic with reckless abandon, you might want to take a good, long look down the money pit. There’s no shortage of foolish purchases you can make in retirement, but here are five that could leave you with a lingering feeling of buyer’s remorse.
In-ground swimming pools
Ah, pools. Almost no one thinks about how expensive and time consuming these babies are to maintain and clean — averaging about $4,500 per year across the United States, according to HomeGuide. What’s more, you may get little use out of it if you live in a northern climate. (In Chicago, for example, pool-worthy temperatures stick around for as briefly as two-plus months a year.)
It may be worth the effort and cost, though, if you plan on hosting pool parties and grandkids. And there is the argument that pools increase a home’s value by an estimated $27,200, according to a HomeLight Spring 2021 report. But how much will it cost to build it? Count on an average of $42,480, which can easily sneak into the $100,000 to $150,000 range for an upscale version.
For avid swimmers, you might consider alternatives like an above-ground pool, swim clubs or visiting a nearby beach in the summer.
Your child’s wedding
Wedding costs have exploded in the last few decades, with retirement-age parents often footing the bill. In fact, many American parents may take on serious financial struggles just to pay for this one day of their child’s life.
The average cost of a wedding ran about $30,000 in 2022, according to a study by the Knot: a $2,000 increase from the year before. And with inflation still hot and interest rates on the rise, this is only likely to run higher and higher. Flying to an exotic location? Cha-ching. Fifteen-piece wedding band playing the “Electric Slide”? Cha-cha-ching.
Think about what truly makes a wedding special: your guests. By all means, make it a day to remember. But if $30,000 represents, say, a down payment on a beautiful home, you could just as well take that plunge for the couple and have a simple-yet-beautiful ceremony there. Now isn’t that romantic and creative?
Read more: Here's how much the average American 60-year-old holds in retirement savings — how does your nest egg compare?
A timeshare
Often bought under high pressure from slick salespeople, vacation timeshares always look great on paper — at least the way they present it. But there’s lots to ruminate first: How often will you really use it? What will you sacrifice to buy it? What will it cost to maintain? (Note: No big-ticket purchase of a physical item comes without maintenance costs.)
What’s more, timeshares are often impossible to sell as they’re hardly worth anything . It’s not a second home, after all, and therefore not technically an investment. It’s an $8.1 billion industry and your piece of it will cost you $24,140 per interval, according to the American Resort Development Association data. And all that often boils down to a few weeks of use a year.
Life insurance
Life insurance continues to be a controversial topic in terms of its utility. While whole life can certainly be worthwhile during your working years when you have a family to support, when you retire this isn’t necessarily the case.
A far smaller policy might be worth considering, like term insurance versus whole life. Still, the premiums explode once you hit your golden years. A healthy 35-year-old who buys a two-year term policy may pay around $430 per year, CNN figures show, whereas a 65-year-old could pay around $7,300.
Travel experiences
Many retirees use their freed-up time to travel the world. But there are some clearly indulgent, exorbitant routes that won’t meaningfully expose you to local cultures or the rich variety of global life. Here, cruise ships are without equal.
Figure airfare costs to arrive at a port — you could’ve just as easily jetted to a vacation spot, right? — in addition to that, the average cruise vacation suite runs about $200 per night before any extra costs, according to Cruiseline.com. Excursions, experiences, drinks, food — it all adds up to be around $3,650 per person for a seven-week cruise. (And are you paying someone to care for your pool while you’re gone?)
That being said, seven weeks of retiring to a cruise ship may sound like the life. And that’s the thing: it is your life. Our goal here is not to discourage you from making any of these big-ticket buys so much as to sketch things out first — and avoid making a bunch all at once. Your retirement was the result of a beautifully executed plan Why not carry that planner’s wisdom into your post-work years?
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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