When you hear the word luxury, what do you think of? Maseratis, Ferraris, private jets?
Dream on – we are too – but that’s not what we mean by luxury today.
We’re talking about needs versus wants. Food, clothing, shelter – these are needs. Having a spare room and a six-bedroom home during retirement are probably luxuries. So essentially, what we mean by ‘luxury’ is something that could be traded off; something that you could live without in order to make room for other things.
Your money is finite. So, the more things you want, the more it has to stretch. We’re not saying give up everything – we’re just highlighting the fact that you’ll need to compromise a little to afford some of those luxuries.
If you have $1.6 million when you retire, that works out to be roughly $80,000 a year you can withdraw. Obviously, some people have concerns that their retirement money will run out. So, we always do a bit of ‘backwards mapping’ with our clients – we work out the amount they think they’ll need during retirement, then plan from there.
Just to be clear – we’re not here to tell you how to spend your money. If you want to buy a Maserati, go for it. And if you have some spare change, we’ll take one, too! Instead of telling you what to do, we simply want to discuss 5 popular luxury items that people like to have in their retirement.
Having some of these luxuries could mean the difference between needing $50,000 a year or $100,000 a year in retirement. Working out your goals is the key.
Dallas Davison, Michael Hogue and Ali Hogue.