Retirement is supposed to be the reward. You finally have the time and, hopefully, the money to do what you want. But some financial experts say a surprising thing can happen once the paychecks stop: buyer’s remorse.
Big purchases can feel very different in retirement than they did during your working years. Two retirement professionals shared the purchases retirees most often come to regret. And what to do if one of them sounds familiar.
RVs, Campers, and Second Homes
It sounds like a dream: buy an RV and hit the open road. Purchase a vacation home and have family visit every summer. But Farr says these big-ticket buys are among the most regretted in retirement.
The problem is usually the long-term cost. Farr says many retirees “underestimated the long-term carrying cost of these items, and overestimated how often they would be able to utilize them.” The assumption that you’ll travel constantly or have family over every weekend, he notes, “rarely happens.”
Generous Gifts to Family
Wanting to help your children or grandchildren is completely natural. But Von Ahsen says becoming too generous too soon can backfire. That includes large cash gifts and co-signing loans.
The regret tends to set in when these gifts are made, as Von Ahsen puts it, “before the retiree has full clarity around their own retirement income plan.” In other words, giving away money before you truly know how much you’ll need.
Big Home Improvements
Spending money to update your home so you can stay in it longer seems like a smart move. And sometimes it is. But Farr says it’s also a common source of regret.
“It is not uncommon for people to spend tens of thousands of dollars improving a home so that they can ‘age in place,'” he says. The trouble comes when, a few years later, those same retirees find they need assisted living, memory care, or nursing home care instead. The money spent on renovations is gone, and the funds needed for long-term care aren’t there.
Financial Products They Didn’t Fully Understand
This one stings. Farr says some retirees look back with regret on financial products they purchased without fully understanding what they were buying. He mentions high-commission annuities, speculative investments, and illiquid private placements, all of which were “sold by salespersons promising safety or excessive earnings.”
Recovering from a costly financial mistake is hard at any age. In retirement, Farr says, it’s especially difficult.
What to Do If You’re Already There
If any of these hit close to home, Von Ahsen says, don’t panic, and don’t let pride make things worse. He recommends stepping back from the emotion and asking yourself three clear questions:
- What is this purchase actually costing me each year?
- What would I recover if I sold it today?
- What am I giving up by keeping it?
“Sometimes the right answer is to sell and move on,” Von Ahsen says. “Other times, the better answer is to keep whatever ‘it’ is but adjust spending elsewhere.”
The goal, he says, is to avoid letting a regrettable purchase become what he calls “a long-term financial anchor.” You made the best decision you could at the time. What matters now is what you do next.