I’m a financial planning expert: 5 expenses retirees want to spend more money on
Most retirement advice is geared toward saving, reducing expenses, increasing income, and… Grow your nest eggs As large as possible to ensure you don’t exceed your funds.
Retirement planning: How much does the average person 65 or older spend per month?
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All of these steps are crucial, but just as you can never go back and save more money, there are also no second chances to spend on things that might bring you contentment, happiness, and wealth later in life.
GOBankingRates spoke with two financial planning experts who know this scenario well. Here’s what he recommends for retirees who want to spend more on earlier in life.
Many retirees have the same regret
Max Avery He is an author, keynote speaker, and business development and growth professional who was appointed by Secretary of Commerce Wilbur Ross in 2018. He has served on the Arkansas District Export Council, contributed to the National Small Business Association, and served on both the Small Business Exporter Committee and the Economic Development Committee. For two years on the Economic Development Committee for the City of Alma.
Along the way, he has guided countless business owners from entrepreneurship to retirement.
Over and over, he heard them express their regrets—not about the money they hadn’t saved, but about the things they wished they’d spent more money on in their younger years.
Investments in health and wellness
Avery calls health in retirement “true wealth” — and he’s encountered many wealthy retirees who haven’t invested in it.
“A common regret among retirees is not prioritizing health-related expenses,” he said. “Along with routine checkups, investing in preventative dental work and other health-focused measures proves invaluable. Neglecting this in earlier years often leads to unexpected health care costs in retirement. A stitch in time saves nine, Not just for your wardrobe, but for your well-being.
The risks are as much financial as they are physical and mental.
According to Merrill Lynch, “Even with Medicare, medical costs can put you at risk of outpacing your savings.”
A healthy 65-year-old who retires in 2023 will likely use approximately 70% of his or her lifetime Social Security benefits to pay for premiums, vital services, and out-of-pocket expenses not covered by Medicare. However, only about half of Americans realize how much health care coverage will cost in retirement.
They spend on their homes as if their retirement depends on it
According to the American Association on Aging (ASA), homeownership is one of the most notable differences between retirees who are thriving and those who are surviving.
A home can be an important source of wealth, as it significantly reduces housing costs and seniors can leverage it to cover expenses. While owning a home comes with stress and risk, “even older homeowners with high levels of mortgage debt enjoy significantly greater financial security than renters,” according to the ASA — but only if those homes are well maintained and don’t depreciate in value. Unsaleable money late in life.
“Many retirees find themselves wishing they devoted more resources to improving home maintenance,” Avery said. “Overlooking minor repairs or improvements in prior years can result in major expenses later. A well-maintained home not only provides comfort, it can also be a profitable asset in the ever-changing real estate landscape.
Spending to help adult children reach important milestones
Many parents – especially those who are building their own fortunes – refuse to help their adult children financially because they believe they will never grow up if they know they can always depend on their parents. While this philosophy is not entirely without merit, many regret being so stubborn later in life in refusing to help them achieve accomplishments such as getting married or buying a car or a house.
“Retirees often express a desire to support their children more,” Avery said. “Providing financial assistance to children during critical life stages pays off in the form of a lasting family legacy. Financial well-being is a torch that is passed down through generations.
A warning not to overspend in two main areas
Harvard-trained economist and personal finance expert Keisha Blair He is the internationally bestselling author of the Holistic Wealth book series, host of the Holistic Wealth podcast, and founder of the Holistic Wealth Institute. Her latest book won Best Book in the Self-Help Motivational category at the 2023 American Book Festival Awards.
“Retirees often express regret about some financial decisions they wish they had made earlier in life,” she said. “Understanding these regrets can provide valuable insights into the psychology of financial choices. Here are two common investments that retirees want to prioritize.
Contributing to the education of their grandchildren
For many retirees, missed opportunities for generational health spending extend beyond just their adult children — they often carry over into their children’s children, too.
Grandparents who open 529 tax-exempt college savings plans can enable their generations to afford the astronomical cost of higher education without burdening themselves with years or decades of student debt. Those who don’t start early miss out on years of tax-free compounding.
“Not supporting the education of grandchildren seems like a great regret,” Blair said. “Investing in the Grandchildren’s Education Fund can have long-term positive impacts, enhancing education and financial security for future generations.”
Buy a priceless gift of travel and experiences
Finally, many seniors look back and realize that they spent their lives living to save rather than saving to live. Having a healthy egg is a must, but all the money in the world can’t buy back the opportunity to experience the things that make life worth living.
“Many retirees express a desire to invest more in travel and experiences, especially in the early stages of life,” Blair said. “The rich, memorable moments gained through exploration often outweigh material possessions.”
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