6 Expensive Purchases To Never Make After You Retire

If you’ve been planning for retirement and have finally reached the big day, you might want to celebrate. You might even be making plans for what to do with your money besides covering the essentials.

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But you may want to think twice before you go out and buy that luxury car or bespoke vacation. While it’s not a bad idea to splurge on a few things here and there — provided you’ve got the funds for it — you could end up spending too much or become financially stressed out if you’re not careful.

These are the top expensive purchases you should avoid after retiring , according to experts.

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Alternative or Overhyped Investments

“In my experience, one of the absolute worst financial moves retirees can (and some do) make is pouring their money into overhyped investments they don’t really understand,” said Alex Schlesinger, CEO and founder of Active Mutual .

This includes buying into cryptocurrencies, complex derivatives and other speculative schemes that never quite deliver on their promises.

“It’s heartbreaking how many of our clients lost huge chunks of their life savings in these sorts of risky ventures,” said Schlesinger.

“With some exceptions, many seniors live on a fixed income. That’s why I always advise my clients to avoid anything that seems too good to be true. Instead, they should focus on preserving their wealth and making sure they have enough to cover their essential expenses.”

Erika Kullberg, the founder of Erika.com , an attorney and personal finance expert, also weighed in on this.

“Consider new ventures with their accompanying risk, whether it’s a new business, an interest in speculative stocks, or anything else that can lead to parabolic gains, but also has the potential to wipe out your gains and more,” she said.

“Of course, in retirement, there are very few opportunities to recover from such financial failures — and you need to preserve your capital as it builds up that secure lifetime income. You should focus on stable, secure, dependable investments.”

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Extravagant Vacations

Retirement is when you have all the time in the world to take those vacations you’ve always wanted to go on, but you may want to skip the ultra-luxury trips.

“Extravagant vacations are a drain on finances, and your budget can quickly spiral out of control,” said Michael Foote, the founder of Quote Goat .

“There’s always another site to see, a trip to join and of course, fine dining. Travel, especially dream holidays, typically eats into your retirement savings. Extravagant vacations are fun but a spend that you could come to regret.”

Expensive Boats or RVs

When you retire, it’s generally best to avoid expensive boats or RVs — unless you’ve got a clear plan for using them and they fit into your finances.

“If you didn’t already own a boat or spend a lot of time on the water, don’t buy one in retirement,” said Scott Lieberman, the founder of TouchdownMoney . “Boat maintenance costs add up very quickly and the up-front costs aren’t cheap either. Most boats just aren’t worth it.”

As for RVs, Lieberman suggested that renting one might be more financially sound than buying one. “The cost for an RV isn’t worth it if you only use it a couple times a year,” he said.

Large Properties or Homes

Unless there’s a specific reason for it, skip the major real estate purchases, too.

“Many seniors dream of moving to a large beach house, but in reality, the upkeep can be too much,” said Foote. “As years advance, individuals may find the level of maintenance overwhelming and resent buying the property.”

The same goes for high-priced retirement homes.

“The lure of a vacation property located in an attractive part of the country or on another continent is a strong one, yet the continuous costs associated with such real estate — property taxes, upkeep, utilities, perhaps a homeowner’s association fee — can be crushing, especially for those on a fixed income, including retirees,” said Kullberg.

Timeshares

Timeshares are often marketed toward wealthy individuals and retirees who want the luxury of traveling and knowing they always have a place to stay, but don’t necessarily want the year-round upkeep.

The problem is that timeshares can be extremely expensive — annual maintenance fees can easily be in the thousands.

“It seems like a great idea to get a cheap place that you enjoy visiting,” said Lieberman. “But the costs go beyond your additional investment, and they’re virtually impossible to sell for anything close to what you paid for it.”

Luxury Vehicles

Needing a new car is one thing, but chances are you don’t need to buy a brand-new luxury car after you retire.

“In some cases, it makes sense to buy a new car — if your current car makes a warbling sound like a seagull, or if you need a larger vehicle to fit your grandkids in the back seat — but generally a new car loses a considerable amount of its value over the first few years,” said Kullberg.

“Plus, the cost of maintaining a luxury car, the insurance and the price of fuel can stretch a retiree’s fixed income, diverting cash from more important bills.”

This article originally appeared on GOBankingRates.com : 6 Expensive Purchases To Never Make After You Retire