Retirement Regrets: 5 Retirement Purchases You’ll Wish You Didn’t Make
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- เผยแพร่เมื่อ 9 ก.ค. 2024
- Retirement is often envisioned as a time of joy and freedom, but without careful planning, it can also lead to regret, particularly regarding certain purchases. Here are five common retirement purchase regrets and how to avoid them:
1. The Dream Home: Many retirees dream of owning a perfect home, but it often becomes a financial burden due to high maintenance costs, property taxes, and upkeep. Additionally, if it's far from family and essential services, it can lead to isolation. To avoid this, consider a manageable home that fosters social connections and is convenient.
2. Unnecessary Insurance Products: Retirees often buy insurance products like annuities and long-term care insurance without fully understanding their needs, driven by fear-driven sales tactics. This can result in high fees and unsuitable coverage. To avoid this, assess your needs and consult unbiased financial advisors.
3. Investment Properties: The idea of investment properties as a source of passive income can be misleading. Managing properties involves significant time, effort, and unexpected expenses. Retirees should consider if they are willing to handle these responsibilities or explore other investment options like dividend-paying stocks or REITs.
4. Financial Gifts to Adult Children: While supporting family can be rewarding, it can also lead to financial strain and dependency issues. Retirees should ensure that their gifts are sustainable and align with their financial goals, setting boundaries to encourage financial independence in younger generations.
5. Trendy Retirement Travel Destinations: Exotic travel often fails to meet expectations and can be expensive. Instead, focus on what genuinely brings joy and consider local trips or less-publicized destinations for fulfilling experiences without high costs.
By aligning these purchases with your true needs and desires, you can avoid common regrets and ensure a meaningful and financially stable retirement.
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⏱Timestamps:⏱
0:00 - The dream home
3:07 - Unnecessary insurance
4:47 - Investment property
6:31 - Financial gifts to adult children
9:34 - Trendy travel destinations
11:57 - Conclusion
Other videos we think you'll like:
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Jame's 5 Common Regrets...
1. "Dream Home."
2. Unnecessary Insurance. (Annuities and LTC Insurance Policies) The WRONG Ones.
3. Investment Property
4. Financial Gifts to Adult Children
5. "Trendy" Retirement Trips
Another excellent video from James.
You forgot the Big Yacht or the Big Motorhome. It's fun at first and then it's another anchor.
I expected to see this on here for sure
Absolutely, larger investments like yachts or motorhomes can be particularly demanding in terms of upkeep, storage, and overall maintenance costs. What may seem like a thrilling adventure at first can indeed become a significant responsibility and financial burden over time.
Yeah I'm kind of glad he didn't say motorhome. I really think my wife and I would enjoy being on the road.
well I was thinking that motorhomes is a lifestyle enjoyment to adventures and experiencing things. However there are boundaries to excess and I think that's where the overly big and expensive motorhomes can become regrets. But hey, if you can afford it... live it because you can't take it with you
Retirees who remained in their starter homes seem to have been able to retire in these homes. I've seen retirees who have sold, moved up, bought "up", and sold several times. And...they now are in rentals. This is what I've seen. Good luck to all of us! 👍😊
That is kind of my goal. I've made several million dollars trading up in homes. My current home is worth 1.25 M and i have two rentals worth 250K each. When i cash out of EVERYTHING i plan on investing the money and using the cash flow to pay rent to someone else. This way i can pretty much move whenever i want and not have to worry about repairs etc etc.
I’ve lived in my 1950s ranch 1560 square feet for 26 years and will retire here too!
It's interesting to see the different paths retirees take with their housing decisions. Some find that staying in their starter homes allows them to retire comfortably without the financial strain of larger mortgage payments or rent.
Haha, yeah, in 1999, my husband and I bought our first home; our realtor told us to save her contact info for when we wanted to move up from our "starter home." We had two kids and it sometimes felt extremely "cozy," but any bigger place would've meant at least $1K more per month mortgage, and we always had things we preferred to do with that money (including going back to school for a more fulfilling career, cutting back work hours to focus on family & community activities, and saving for retirement). Now we don't feel like we should "downsize" (to what?!). Though I do wish we'd listened to her warning that with 25+ steps to reach the front door, we wouldn't be aging in place.
@@nikij.6058same! Some might think it’s small but it really is
my dream home…especially since it’s paid for and the property taxes are low.
It is always strange to see retired couples buy huge, 3000+ sq ft. homes. The problem is that you need the big house when the kids are young but you may not be able to afford it, so when you can afford the dream, you have a bunch of empty rooms.
And the kids are busy with their families. Working, going on vacation, or to the kids' activities.
It has nothing to do with practicality. It's a big middle finger to your enemies.
This used to make sense when families lived together till old age in family compounds, not with the current family lifestyle.
Unless you are close and they visit.
And an enormous lot on which the big house sits; the huge yard requiring constant physical labor to maintain, or at the expense of a landscaping service.
With interest rates well under 4%, we will keep our original home and investment duplex. We can rent our “dream homes” whenever and wherever we want to knowing we will always have our base property to fall back on.
Great video and advice. The kids and Grandchildren can fight over what’s left when I’m gone. They need to support themselves.
We’re traveling now while we’re younger. Already went to Switzerland and Costa Rica this year. I’m not traveling the world at 70.
I'm 70 and spend half the year traveling?
Us, too, except we didn’t stop at age 70, Hubby is 76 and still enjoys active traveling.
I am 😀
Great list! Others to approach with caution are RV, sailboat, 2nd home. Rent first and multiple times before purchasing. You may find out you can still have the dream but only when you are enjoying it and not the rest of the year you must maintain that big purchase.
Thank you for the wise words in this video. Although there were years when I wished I had bought that dream home and our kids had the huge house, we stayed put. Now the kids are gone and the house is paid off. It is such a freeing feeling to not have a mortgage in retirement. Travel for me is important though, but only within the budget we established. I know there are many places I will never get to, but I will enjoy those that I can visit.
It's over 90 degrees where I am. Your long sleeve, heavy, flannel shirt is killing me.
90! It’s 118 in Phoenix! 🥵
@@DUNEATVbut, it’s a dry heat……🤷🏼♂️
Great content. Been following you for several years. You provide a real perspective on retirement that others don’t always address.
James, I like the clarity of your videos!
You might want to make a video on the most basic question in retirement, which needs to be asked first, before thinking about "how much is needed for retirement?" ...e.g. what does your retirement "look like'".
Scenario1 ... Husband wants to hunt and build ship models in the basement. Wife wants to paint the next greatest landscape.
Scenario 2 ....Husband wants to finally study monetary policy and investments, and wife wants to travel on cruise ships all over the world.
Scenario 3 ....Husband gets Parkinson's, and wife stays at home as the Care Taker.
The dollars need to support these 3 retirements is VERY DIFFERENT!!
Thanks James for another video with great information!
Good calls and definitely no what the other finance channels are talking about. I laugh at people talking about their "forever homes". There are often four homes in our lives. 1. The starter; 2. The larger home when kids get bigger; 3. The down-size when the nest empties; and sometimes 4. The retirement home. Let's not talk about the old folks home!!!
You make a great point about the different phases of homeownership that many people go through in their lives. Each stage often corresponds to different needs and circumstances, such as starting a family, accommodating a growing family, downsizing once children move out, and possibly transitioning to a retirement home later on.
I think the key take away from this video is that if you can’t afford an investment, home, vacation,etc before you retire, you can’t afford it after. Making increases in your living expenses after your employment income has ended is very risky. My biggest financial gift to my adult children is contributions to our grandchildren’s’ 529 accounts. It allows our adult children to contribute more to their retirement savings and gives us the satisfaction of empowering our grandchildren with educational opportunities.
Great channel. So grounded and realistic.
I’m watching this on our last night of a 17 day trip in Europe. Half of it was on a cruise of the Norway coast, and half of it was our own exploration of castles on the Rhine river. Both required a lot of time of research and effort, there were definitely moments of stress, but I think all of that is true of anything you want to be good at. I loved the cruise, but I also loved traveling independently. I don’t think travel is for everyone. we all have our preferences.
Congratulations on your travels. My wife and I have a passion for travel and we get months of enjoyment planning and anticipating the trip and years of memories. We are secure in our retirement and plan to travel extensively while we can. I know too many people in their late 60s who suddenly have a medical condition that limits their ability to travel. Bon voyage!
My husband would dream about a big piece of property, until he saw how much work his friend had to do on his property
Nice job with this video presentation.
Keeping the list present as you walk through each item was very helpful while also referring back to them as you progressed through the entire list.
That said, all great points and you now have me as a subscriber.
I’m 2 years out from planned retirement and putting more time into planning those next moves, and you’re giving me good points to consider. Thanks!
Buying expensive toys without renting at least a few times or seasons first. RVs, trailers, boats, touring motorcycles, etc. We probably all know folks who dropped major cash on buying something they had never tried or only tried once, only to find the reality of the experience to not be what they expected. The toys gather dust or soak up major maintenance expenses for years, or are sold back for a fraction of what they cost.
Excellent point about renting first. I've been looking at RVs, and the price is daunting. Thanks for this.
You're absolutely right. Buying expensive recreational vehicles or toys without first renting or trying them out can sometimes lead to unexpected realities.
If it uses fuel, rent or lease.
No. 5. Travel. I travel a lot and far away.
The Facebook and Instagram doesn’t show time and frustration spent on reservations, tickets, and planning. The pain and torture in lines at airports, trains, busses, taxis, subways, museums, attractions… The hassle of packing, organizing and carrying luggage.
The hot and humid weather, noise, crowds, smells, dirtyness and discomfort at destinations and accommodations
Agree, travel to far away places is not without its challenges. My spouse and I retired in early May and just spent four weeks in France and Italy. We saw amazing things and learned so much. But it was also hard. I can see why some people would not want to deal with the planning and the challenges of travel. It may be somewhat like having investment properties, where you need to enjoy the process and challenges or you are going to be disappointed.
If you hate traveling so much... why do you keep doing it? If you want a very smooth travel experience, book an executive tour package. It will cost 5x-10x the travel experience, but you are catered to and pampered, with a dedicated agent who will make everything go smoothly.
You only need a backpack, you can buy everything else, travel light.
Recently retired at 58. Rode bicycles with my wife from Rome to Amsterdam over three months then another month in the UK. Planned one day ahead and had the time of our lives. @pronetowander.together for the videos. TH-cam and insta taught us to push ourselves beyond our usual comfort zone and I’m so thankful for the time with my wife and the wonderful people that we met in 10 different countries.
@@fialee8ca132 did I say I hate traveling? As for executive package, not my preference, I don’t like to be pampered by people I don’t know nor do I like servants around me
Highly recommend Die with Zero, especially the chapter concerning children. We’re giving our children the money to contribute to their Roth IRA so they benefit now and in the future and we get joy from helping them now.
Great and useful information.
Thanks a lot.
Great video, James. Very well done. Not judgmental. Just, beware. Thanks.
Awesome tips James.
Beautifully put Thanks for sharing God bless
I retired in late 2022 at the age of 70 and am doing just fine. My home was paid for and I didn't have any debt. I have about $550,000 in savings, IRAs, and a brokerage account.
Maybe not a good idea to share this on the internet.
if i can help others retire happily i wont hesitated to do so
Why on earth not? It is great to see what others are doing and how much they can make it work with.
@@elizabethandrews4199yeah.. because trolls on the internet don’t exist and everything that’s posted is true
Fantastic information. Thank you.
Fabulous content. Thank you
Well done, and thank you!
Very good and smart advice.
Excellent video!
I don't know if this has been mentioned or not. As an adult (and working), I had dogs (Airedale and Wire Hair Fox terrier). However, as I've retired, I've been traveling like crazy (Europe/Asia). And for up to 30 days at a time. I still love dogs, but it is not fair to have a dog and also be gone a lot. When my traveling days are done, then I will get a "rescue" dog, not a puppy, to live out my days. Spending Hint: Who cares what you look like. I buy alot of used clothes (shirts, pants, etc) at GoodWill, Salvation Army. Just make sure that they are in good shape and wash before wearing.
Good info
Gotta see what I need to avoid!
I thought, what does this whip snapper have to teach me…a lot! Good info ❤
I plan on purchasing a dream home, and love traveling. I agree with you on the other pitfalls but having a cool home and traveling is something I plan to pursue. I was thinking about a travel van but decided that pooping in a fancy bucket is not for me. Maybe I will rent a van for a month and test the waters.
I strongly recommend you go the rental route. Even if it’s $5,000/week you will know if your ready to spend $100,000
Ty
Great video, Another factor to add is Do they spend a lot of time planning their financial future? The majority of people do not engage in planing for their future
But James, if I don't watch ads how will I know what I can't live without?
Me and my wife made a dream board on the one date we got to go on in the past 10 years, and it was just a bed to take a nap with no kids!!!!!
100 percent true. I’m approaching retirement and while I am in a good position to have the ‘dream home’ increasingly I don’t think I want it. I don’t want the hassle or, as he notes, being tied down with having to worry about what to do with it while away doing things I really want to do. Not sure what we’ll do as flexibility will be key in retirement but of course I also want to live in something nice when we are at home. Guess we’ll see what seems best when time comes.
With condos investment properties are NO WORK!!! Awesome!! If the unit has a clog or issue, you just enter a work order and the building maintenance fixes it! All you have to do is clean it between renters… travelling nurses are the best … 3 month stints, responsible and clean!
I think investment property is a good investment for the early stage of retirement period. Yes, it is active but doesn't require as much time and effort like the full time. It is a quarter time job that does not require lots of time but kills the boredom of the retirement.
Well done
#4. I agree with your points but you failed to mention for those in the situation to do so, gifting is a strategy for lowering your estate tax liability upon your passing.
Yes purchasing an Annuity depends on 2 things
1. The right annuity for your situation
2. What the market does in the beginning of your retirement
I plan on buying a single premium immediate annuity and I hope the market does well and it was waisted insurance.
I am an early Retiree. I could afford a vacation home, but I just can’t justify the math over renting an AirBNB. Paying for taxes, insurance and upkeep just does not make sense.
Vacay use may not make financial sense but weekend home may
Very true about investment properties. Great income but a steep learning curve that is not passive even with the best manager. Would I change it? Not now. Was I surprised for the first few years? All the time.
Luckily, I have looked at these issues prior to retirement and went through a similar line of reasoning. We moved to an area that with the lifestyle attributes that we really enjoy that is exponentially more affordable than where we were. We did this 10 years before retirement, so we wouldn't be rushing into anything while we were on the cusp of retiring. And we still love living here. Your list is a good one. The one thing that sticks in the gut, though, is LTC. We always maintained LTC policies and still do. But I am not sure that there is a good plan out there . All of the plans seem shaky and expensive. But it's one of those things that you feel you may regret if you don't have one.
I'm curious where you live. I'm 7-years into my (early) retirement journey. Struggling with where I want to/should live. Still enjoying an active lifestyle, (biking, hiking, gym, yoga), but not a fan of the winters in NE Ohio, (where I've lived all of my life). I'm fortunate to have low rent, subject to change at any moment. I try to travel as much as possible and chase warmer weather in the winter. I've visited some nice cities with more favorable climates, but can't see how the major increase in housing costs in those places will be offset by a better overall lifestyle fit. Feel like I'm settling and not truly living my best retirement life. Wish I could find that sweet spot that feels like a great fit.
Thank you for the great tips for retirement that I am very close to! 😂
Good thoughts here. I expected 2nd home/beach house to make the list!
The second home/beach house became my retirement home…love it!
Have a 2nd beach house had for 9 years. Hope to stay there a lot during retirement. When done it will add to my retirement account…
Start early with diversified investments in stocks, bonds, and real estate. Maximize contributions to tax-advantaged accounts like 401(k)s and IRAs. Regularly review and adjust your strategy to ensure security.
So how do you plan financially for gifts to kids? Especially if you plan to “Die with Zero.” We would like to gift our kids when they most need it. Is it the one time payments built into a plan? How do you know if you are “enabling” when they are just struggling financially with no other issues?
Yes, the Financial Service Industry often uses fear and complexity as a selling tool. Remember: "Money Doesn't Grow on Fees."
Strongly Agree: I’ve now had 2 FPs make needlessly complex buys under the guise of diversification. But really they just extend a hundred tentacles and make it overwhelming to think about disengaging. And I also think they sandbag with lower-than-realistic returns to keep clients anxious about the future and therefore less likely to find alternatives. I’m fixin to fire my second FP and go all-in with Vanguard Select.
Regrets: Boats, time-shares, SUVs, that "hot" stock that went bankrupt, crypto currency.
Dream home is a big one and it's definately as much location as it is structure. We live in a 55+ community. Single story houses between 2000-2800 sf and smaller yards. A large number of our neighbors moved here to be closer to family (kids/grandkids), and these people TRAVEL, I tell you.😊 We had some investment properties but they are a lot of work and time and will wear you out. We sold them and reinvested in more passive areas. ROI and revenue stream isn't the same but then again neither is the effort or stress, and that trade-off was worth it for us.
You completely forget using reverse mortgages to buy your dream home and that’s what we did and we love it and our payment is zero in our taxes and utilities are reasonable
Sweet! Thanks for sharing~ were you able to take tax deductions feom the interest in the reverse mortgage to get that xero taxes?
Where can i go on safari in Europe? That would be an interesting adventure.
If I have a property manager then what is the problem ? In retirement you need a property manager for your rentals . There are plenty of good ones out there .
True. But all properties require maintenance and upkeep. Some property managers may handle all of this for you but you can rest assured that it will come at quite the cost and greatly erode your ability to achieve a true financial benefit. Hard to beat 5% CDs if what you’re looking for is cash flow.
Why. You have time. If you have 5 homes. You cousi be spending $6-$20k a year. That’s your vacations!
#6 Toys (RVs, Boats, etc) All on your list are on ours to avoid in retirement.
Dream board on a date night?
My European safari was a total let down. 😂
1 to 3 seems to be things you buy well prior to retirement.
That "investment" apartment building will open a can of tax worms. Nothing in the tax code is simple, but anyone considering this should consult a tax expert first.
We’re living in our dream home that we paid just over $400k for. It’s 3 stories 5 bedrooms rooms. Two fireplaces. With just the two of us now, we have 2 guest rooms-one on its own floor with a fireplace/ living area and deck. A formal living and a great room. It was valued over $1.2 million last Summer. It was in foreclosure, in a great neighborhood and several homes sold for over $1 million last year. Oh, did I mention the 3.2% interest rate we bought it at? We’re keeping this home but selling our beach home in another state we bought with a 3.9% rate now worth double what we paid for it. Writing this after a Transatlantic cruise to EU and planning to travel while waiting on 9th grandchild to be born next month. I’m retired but my husband, a Physician is still working. Which he loves. He’s over 70 and had to start taking his Social Security which is a nice monthly sum and I decided to also take mine though I’m just 65.
In which city/
location house went from 1.2M last summer to 400K in foreclosure?
What happens when those stairs become undoable as you age? Who cleans all three floors. Who pays for heating and cooling that huge home? Sure, if you're rich, none of this is a problem, but then why are you watching this video? To quote Star Wars, "Don't be too proud of this technological terror you've constructed."
I’m closing in on my retirement and I’d like to move from Minnesota to a warmer climate, but the prices on homes are ridiculously high and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways
Renting is always an option, especially in a new city.
I wouldn't go into retirement with debt personally.
I don’t know anyone who purchased a dream home after retirement. Boat or RV has to be number 1/2.
lol, my largest home was 3300 sq. Ft. My dream home would be closer to 1800 sq ft.
Regret #6: Purchasing an RV.
I was thinking the same thing!!
We are enjoying the heck out of our travel trailer, spending 4+ months per year on the road.
Different strokes for different folks.
I'm now avoiding new purchases to avoid slipping into a bear trap. However, I'd like to know where the best investment opportunities are during a downturn. My goal is to retire comfortably on around $1.2 million.
I plan to retire at 62 in another country outside the US that is free, safe and very cheap with a high quality of life. I could fully just rely on only my SS if I wanted to when that times arrives but I'll also have at least one pension, a 403 (b) and a very prolific lnvestment account with my Abby Joseph Cohen my FA. Retiring comfortably in the US these days is almost impossible. I honestly don't understand why people don't move to another country when they get older in retirement. It seems everybody has excuses for almost anything to not take action to better their situation.
One word: fear
Two more words: Medical care.
Dream home
Dream luxury car
Dream vacation/cruise
2nd home
HOA
1) Boat, 2) RV, 3) Larger home, 4) Vacation home, 5) Pool
And here I thought you were going to say "Buying too many cars and guns." Then I realized no one ever regrets that.
In all seriousness, I've actually re-evaluated buying my dream home. As I plan on moving away from where I've lived for the last 20 years due to work, I'll probably look to rent in a different state before I decide to buy.
Incredible safari through Europe? Hehe swole Conole rarely slips so I’ll take this as intentional. BTW your target audience seem the 55-65 near retirement cohort. How about some advice for 45 year olds?
You might enjoy some of the videos from Jame's partner who focuses more on early retirement and a younger cohort. www.youtube.com/@earlyretirementari
Here is some advice for 45 year olds and younger. Save. Save. Save. Do math and look at the actual cost of things. Most people bleed off far more money than they realize.
100 % asset management is not the answer for retirement either….,
Listening to this kid would b my first mistake!
How does everyone feel about purchasing umbrella insurance? I feel like I'm wasting my money on it. Asking for a friend. Thank you.
I live in NC. I have a PUL policy from State Farm for $2M. It costs me $281.00 a year. All you need to do is get into a car accident, for which you are responsible, and you will see WHY you need a PUL policy. There is no excuse for an adult who has an meaningful assets, NOT to own a PUL.
Keep the umbrella but hope you never need it.
Depends how much money/assets you need to protect…I have it and sleep much better.
It's a waste of money until you need it, just like full coverage auto and home insurance. As your net worth increases I think its a good idea. Not in insurance at all, but that was my logic when I bought mine
I buy it because it is relatively inexpensive,....and it certainly can't hurt to have it. I have a 1 million dollar policy that only costs about $400 a year. Every year I happily pay it. And in this sue culture today you need extra protection,......in my opinion.
Disagree on the insurance one. Different people need different peace of mind. If insurance or annuities give you peace of mind and help you sleep, it's worth it.
It is good for the retirees travel, life is too short. You will not bring money with you when you die.
You may purchase an annuity and purchase the wrong product. You may purchase long term care, and purchase the wrong product. Guess what? You may invest, and invest in the wrong investment. You may purchase a 2nd home, and purchase the wrong home. You may purchase and RV, and purchase the wrong RV. You see where I'm going here. Shall we just list everything?
I don’t know anyone who purchased a dream home after retirement.
Subtitle: You can’t buy happiness.
It's their money.
Not once did I ever have a dream home wish 🤷♂️
Good points. #5 is a difficult one. Ive been a global nomad for 30+ years and was lucky to be able to retire at 49. Ive continued that lifestyle into retirement. Also, all of my American friends have permanently left the US so essentially they are on a retirement trip. International trips can be cheaper than living in the US with the insane medical system that Americans need to deal with, plus just being around a culture of who can consume the most, is not entirely healthy.
14 year old talking about retirement. Okkkkkkk….
I’m watching this on our last night of a 17 day trip in Europe. Half of it was on a cruise of the Norway coast, and half of it was our own exploration of castles on the Rhine river. Both required a lot of time of research and effort, there were definitely moments of stress, but I think all of that is true of anything you want to be good at. I loved the cruise, but I also loved traveling independently. I don’t think travel is for everyone. we all have our preferences.
Same here. Finished a Transatlantic cruise to England where we visited Stonehenge. Now in Amsterdam to await the arrival of our 9th grandchild due next month but before that we’ll travel to Portugal because we’ve never visited there. Have been to Paris, Italy and Spain already and Switzerland. Our daughter lives in Amsterdam with her European husband. We love traveling at least once a year. If you can just save $200/week for a year. That’s over $10,000+ for a trip. I’ll br staying for at least two months while hubby returns to the States and continues working-which he does while we travel anyway.
You completely forget using reverse mortgages to buy your dream home and that’s what we did and we love it and our payment is zero in our taxes and utilities are reasonable
Reverse mortgages are just about the worst financial product out there.
@@tpolerex7282 Reverse mortgages are a HUGE mistake. Don’t do it !!!