When you’re making retirement plans, there’s a lot that you want to get right. You want to make sure your investments are in the right place, that you and your retirement planner are putting your time and energy into the strategies that will secure your future. Likewise, you want to avoid missteps in planning, and there’s no more costly way to do just that than to spend outside of your budget.
That Big Purchase
Retirement—Day 1: you’ve saved your entire adult life for this moment. You’re sitting atop a comfortable nest egg and you’ve got nothing but free time in front of you. What are you going to do now? If your first impulse is to make a big, expensive purchase, you may want to take a deep breath and think again. It’s a common impulse to want to celebrate your new freedom by buying something, such as a new mobile home, maybe even a dream home or retirement property. And while celebrating by rewarding yourself is a normal impulse, turning that into an impulse buy can be a serious retirement mistake.
Big purchases can be problematic for a variety of reasons. Not only can these big buys take a huge chunk out of your nest-egg from the get-go, it can be easy to overlook the way expenses for these purchases add up over time.
Take your retirement dream home, for example. If you take the plunge and buy a new home, it’s not enough to just consider the price tag of the home. It’s necessary to also factor in how the new location will affect your expenses. If your new home is larger than your old one, your monthly expenses are going to go up. There may be a range of unexpected expenses that can add up to considerably more than you anticipated, too, including difference in living expenses, if you’re moving to a new area.
Other slightly less big purchases can cost you, too. The recurring costs of RVs and boats, such as operating costs, insurance, and docking fees, can add up. It’s important to work these into the framework of your long-term budget.
Have you considered downsizing?
If you are itching for a change of scenery, consider changing your impulse into a savings opportunity by downsizing. Many retirees find that the big house they needed for raising their family begins to be more of a burden than a boon when just two people are living there. In addition to saving money, downsizing to a smaller residence can also save time and energy in maintaining those now-empty spaces. Thinking small may be the key to making sure that retirement dream stays realistic. Have questions about a potential big purchase? A dedicated retirement planner can be invaluable to
Have questions about a potential big purchase? A dedicated retirement planner can be invaluable to assist with making tough decisions like this, and ensuring that a big purchase fits your long-term retirement budget. If you’re looking for guidance, call our team at Miramontes Capital today.
Miramontes Capital is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Miramontes Capital and its representatives are properly licensed or exempt from licensure. This video is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Miramontes Capital unless a client service agreement is in place. Miramontes Capital is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Miramontes Capital and its representatives are properly licensed or exempt from licensure. This video is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Miramontes Capital unless a client service agreement is in place.