There is no right or wrong way to spend your money once youï¿½ve retired. But you also donï¿½t want to spend a lifetime of savings on something trivial or wasteful, or on nothing at all. Instead, you may want to spend your money in a unique and enjoyable way.
Starting Your Retirement
For many, spending during retirement can be daunting, especially as you may have formed a habit to save, not spend.
According to Leslie Kramer in a September 2016 article on Investopedia, just as you planned your savings for retirement, you can also plan how to spend your money once youï¿½ve retired, with the help of a financial adviser. You should try to set a budget for living expenses so you donï¿½t run out of funds too quickly but are still able to spend money and splurge on items if you want, suggests Kramer.
Deciding How Best to Spend Your Money
Once youï¿½ve figured out how much money you have left to spend, you can plan where that money will go. One of the best ways to spend your retirement money is to do so for the purpose of enriching your life.
If youï¿½re planning to leave money to family, Kramer suggests you consider out-of-the-box ways to do soï¿½like creating a 529 college savings account for your grandchildren, or setting up an annual gift-giving account to give family members something to look forward to from you each year.
If traveling is your hobby or if youï¿½ve always dreamed of visiting faraway places but never had the chance to do so while working, retirement is the time to realize those ambitions, wrote Annie Mueller in a September 2011 article on Investopedia.
If youï¿½re interested in visiting popular tourist attractions, Mueller suggests doing so during off-season or off-peak times. Youï¿½ll save money on the trip overall and be able to do more while traveling, and you wonï¿½t be bogged down by crowds and long wait times for excursions and activities. You could also combine your trip with a hobby, like taking a wine-tasting tour in another country.
If you didnï¿½t attend college, or there is a subject youï¿½ve always wanted to study but havenï¿½t had the time, spend your retirement money on education, Mueller suggests. From attending a simple seminar to earning a degree, the investment you make is one of added depth and richness to your life, which is a fulfilling way to spend your money and your time.
A dog is never too old to learn new tricks, and neither are you too old to do something adventurous. You can experience new things without spending all your retirement savings, such as going on a hot air balloon ride, parasailing or scuba diving, Mueller says. Or you can take up a new sport or physical activity.
ï¿½Many folks who have come to sports late in life get great pleasure (and other benefits, like fitness) from their new activitiesï¿½whether it is fishing, boating, pickleball, tennis, boccie (sic), biking, or water aerobics. If you take up a difficult sport like golf or tennis, take lessons,ï¿½ reports an April 2013 article in Market Watch.
If you are itching to spend your money buying trinkets and items, consider starting a collection of something that will maintain or increase in value over time, Mueller suggests. Youï¿½ll not only put those dollars to good use, but the act of investigating, shopping around and pursuing a certain item also will become hobbies in themselves to enjoy during your free time.
ï¿½What youï¿½ve got to remember with your retirement dollarsï¿½and your retirement timeï¿½is that you have options. Just because your brother or your neighbor or your best friend decided to take a cruise, you donï¿½t have to. Decide what sounds best to you. Examine what you already enjoy spending your time and resources on, and think about how you can take that to the next level,ï¿½ Mueller writes.
In the end, make decisions for spending your savings based on whatï¿½s important to you and what you value.