So you spend decades working your butt off for a fat retirement savings account. Now you can retire in safety and comfort. Right? Let’s take a step back here. Unless you are a billionaire, your retirement fund will not last forever. Once you retire at the age of 60 or 65, you still have decades to live. Your final years will also incur hefty medical bills whether you like it or not. It’s easy to think that you can spend all you want in your sunset years and be all right. Not exactly. Some people do waste their hard-earned retirement savings and end up destitute. Don’t let this be you. Be aware of these simply awful ways some retirees end up wasting their lifelong savings:
Spending Your Final Years in Hotel Rooms across the Globe
You are retired! Yay, now you can spend your life cruising around the globe. Sure, but only if you can afford it. It’s typical for many retirees to go on extended vacations soon after retiring. However, these vacations can be quite costly. If you plan to go around the world in 80 days, it has to be budgeted for. You must calculate the cost of vacations and deduct that amount from your total savings. Now take the remaining amount and estimate whether it is enough to survive the next two decades on. Plan for one or two luxury vacations. It’s best to keep vacations in mind and save extra early on to avoid running out of money.
Buying Cars, Boats or Other Vehicles
Once you have your hands on your retirement savings, do not go on a vehicle buying spree. Vehicles, in general, are terrible investments. If you buy a shiny new car today, the value of that car will go down in price year after year. You can never sell a used vehicle for more money that you initially bought it. So, buy a new car or a boat only if you really, really need it. Consider whether it’s better to rent a boat or another vehicle than buying it and keeping it in your garage.
Buying Everything the Shopping Channel Tells You To
If you are a retiree or a soon to be a retiree, avoid the shopping channel. Stop browsing shopping sites online “just casually” as well. Some shopping ventures are set up deliberately to target elderly retirees. Deals and discounts that you can’t refuse will be pushed onto you, and the next thing you know, you don’t have money to buy the basic necessities. Be very careful when you shop with your retirements savings. If possible, consult with a friend, a child or a confidante whether buying something expensive is really worth it.
Deciding to Become a Late Blooming High-Risk Investor
The retirement years are not the time to be high-risk investors. You should ideally avoid investing in retirements. The reason is simple. If you lose money on a bad investment, you no longer have a source of income to pay for it.
And the absolute worst way to spend your retirement savings is anytime before actually retiring. Do not spend a penny in your retirement savings fund until you have left working life for good. Save separately for emergency needs that might occur before you retire.