Yahoo Finance 4 Overpriced Products Retirees Shouldn’t Waste Their Money
One of the best parts of being retired is the freedom to spend your days the way you want to. You can sit on the porch, drinking coffee well after noon. You can take up a new hobby, from gardening to golfing to go-kart racing.
However, sometimes, that freedom might not be the best thing for you — at least when it comes to your money. With all the freedom of retirement comes a sense that you can let loose by splurging on the big-ticket, or at least super fun, items you never would have bought when you were still clocking or logging into the office every day.
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You might be surprised to find that some of the items that retirees are culturally expected to spend big bucks on, at least in those first years of freedom, are actually the cause of some major buyers’ remorse.
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Luxury Vehicles
You’ve worked hard, and you’ve earned the right to show off a little. What better way to wow the neighbors and become the envy of your bingo club by zipping around town in a luxury vehicle with the No. 1 Grandmom or World’s Best Pop-Pop license plate?
Before your dreams of being the Steve McQueen of your cul de sac get too big, consider this: According to MotorTrend magazine, one of the cheapest luxury vehicles in 2024, the Acura Integra, still goes for $32,955. Cheaper models of Lexus and BMW vehicles are in the high $30,000s to $40,000s range, making them still a little bit too pricey for a fixed income.
Unless you have enough money available to buy one outright, you’re essentially asking to take on a monthly car payment at a time when you don’t have a regular paycheck coming in. Using your money to keep up a reliable car with more good years in it, or going for a more affordable route, might be wiser.
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Online Impulse Buys
You’re relaxing at home on your iPad or tablet, and suddenly, you see an ad for a meal subscription service. Thinking it might save you money on your groceries, you decide to go for it, and sign up. A few moments later, your scrolling leads you to an ad for beautiful cookware that seems like it will be perfect for serving your boxed meals. Before you know it, you’ve also added some place settings and glassware to the mix.
It’s easy to get sucked into a purchasing spree.
Boredom can be a contributing factor in overspending for people of all ages. Staying active in your community, joining clubs or even making trips to the movies — why not take advantage of senior discounts and matinee prices? — can help keep you engaged enough to stay away from the “buy button.”
The Dream Home
For many retirees, finally acquiring the home they’ve always longed for is the absolute dream of their retirement. The house with the big backyard or in-ground pool — or better yet, both — enough bedrooms to have overnight guests and a gorgeous, spacious kitchen sound like major rewards for a lot of hard work over the years.
Unfortunately, the home of your dreams can soon become the bane of your reality. According to James Conole, CFP, founder of Root Financial and YouTuber, the dream home is one of the major purchases that retirees regret.
Instead of being able to prioritize freedom or proximity to family, Conole said that retirees saddled with a dream home can feel anchored by the costs of maintaining it. Instead of planning exciting trips or providing support to your family members, you’ll be stuck paying property taxes and spending money on home repairs.
If your dream home is also away from things that you’ve found you enjoy in retirement, like safe places to walk, or things you may need, like healthcare facilities and grocery stores, you’ll incur the extra costs of transportation.
Unnecessary Insurance
As people age, it’s understandable that they’d be concerned about having enough insurance to cover their health needs and other costs. However, Conole said sometimes, retirees can go overboard on purchasing insurance products.
He added that he often sees retirees show the most regret in terms of annuities and long-term care insurance products. While these can be necessary parts of any balanced approach toward insurance, the key is finding the right products for you. It’s better for retirees to evaluate their needs and make decisions about what to purchase based on those needs instead of going for the biggest package with the most features.
“Make sure that it’s the right coverage and make sure it’s the right product to meet your specific needs,” he said in a video called “5 Retirement Purchases You’ll Wish You Didn’t Make.”
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This article originally appeared on GOBankingRates.com: 4 Overpriced Products Retirees Shouldn’t Waste Their Money
