4 Recreational Retirement Expenses You Can't Afford to Ignore

Peter, good to see you. A fun topic today. The four recreational retirement expenses that you can't afford to ignore. Once people retire, their spending habits often change a bit. Of course, housing, healthcare, and groceries, those are still going to be a part of your budget. However, since retirement often means more free time, you'll probably be spending more fun money. So let's talk through those four common expenses.

So listen to this too. The average cost of a vacation in the U.S. for two coming in just around $4,000. So what is a realistic amount to set aside for a travel budget? I guess I need to find out where these folks are booking their vacations.

My last several have been significantly more than that. We are only traveling with three generally. So I think that, I don't know, either those are dated or of course you can control the extent of your vacations, right? You can do a staycation, you can travel locally, you could just change locations to an Airbnb or something like that, right?

And that helps to control costs. Every vacation doesn't have to be an all out escape completely, right? But yeah, I mean, people's spending habits and life change completely after they retire. And I know right now I'm either here at work earning money or I'm out there in the world spending it. And when every day is a Saturday on vacation in retirement, you've got a lot more free time to be spending and a lot more lifestyle that you're going to have to pay to support, right? When we retire, we've got a finite amount of money and an unknown amount of time that we've got to make that money last. And there are definitely expenses that we need to address.

You've got your, I have a report, it's called the three biggest expenses in retirement and how to plan to control them. And I highlight taxes, healthcare, and inflation. But in reality, like lifestyle is right there with those three expenses.

It may be more than several of those if we add it all up, but we've got to address that. So yeah, I mean, leisure, recreation, travel, vacation, we have to live, we have to enjoy life as we're living it. We don't want to be so scared to spend that we never do anything and then pass away with a pile of money that we could have used to enjoy ourselves. But at the same time, we've got to have a plan for how to know how to control those expenses. And then the next item you might want to factor into your budget would be an RV. A study by the RV industry found that 48% of avid RVers are retired.

And these typically cost around a hundred grand, but of course that can vary quite a bit. Yeah. Well, I mean that that makes sense, right? Who's got the time to go around traveling the country in an RV. People who are retired, who don't have a job.

So all well and good. And people who love their RVs love their RVs. I'll tell you what, and people who don't, I think that there's kind of that just not something I would ever be interested crowd as well, right? All well and good, but you do have to consider like the closed quarter aspect.

Do you have a spouse that snores, right? You know, there may be something that you need to consider when thinking about RVing. And then certainly like to your point, Erin, the range of prices, you could do everything from kind of a tonneau cover on the back of a pickup truck and put a nice mattress to a several hundred thousand dollar full home on wheels. Luxury expands at the push of a button TVs and beds everywhere that fold out from secret compartments like these things get very elaborate and high dollar very quickly. And just remember it has a motor and everything with a motor depreciates over time. So we've got to consider the cost that we're willing to put into it, how much work, how much upkeep, how much maintenance is going to cost as well.

And then like, how much are we actually going to use? It should probably never be your only place to lay your head down at night, but it is perhaps and I can't claim that I am one who's ever really experienced this, but it sounds like a fun kind of temporary lifestyle to just go out and travel and see the world. My wife gets carsick easy, so it probably is not something that we'll ever get to enjoy together. You can enjoy this one vacation homes, right? A lot of retirees choose to own a second home and listen to these stats.

Baby boomers currently own 57% of all vacation or seasonal homes and 58% of rental properties. Well, what do you do when you're done paying for one home? You go out and buy another, right? Everybody says, Oh, I'm going to be done with that mortgage. And suddenly we've got all this additional discretionary income because we get close to the end or at the end of one mortgage. And then we're like, Oh, we should, we should go out and get another one, uh, some, someplace else so we can go visit and vacation and then more and more like some of those vacation homes are income producing. We can rent them out for weeks at a time or Airbnb them. Not everybody wants to do that with their vacation home. There are some people who just, you know, that, that is just a second place for them and for them only. But yeah, I mean those stats on the percentages of those kinds of second homes and vacation homes that are owned by retirees does not surprise me because during our work and career, our, our money is generally going to our first home and then we've got the extra discretionary income potentially. But don't discount that price again, right?

Is that this is going to need to be, if that is a dream or a hope or a situation or reality of yours, you've got to factor that into the plan for income and expenses. Mm hmm. Right.

And then of course this is the funnest one. I think your hobbies, right? This has to be a portion of your budget because you finally have time to enjoy this hard earned retirement and this needs to be a part of your budget and expenses though can vary quite a bit. You know, I wish more people thought about this one here and I talk with a lot of people who really don't think through what are you going to be doing with your time when you no longer have to show up to work. And there's something about the human psychology that wants us to stay driven and active and motivated and involved. And you know, just sitting in the lazy boy or not going to work is not actively using up that time.

And the prevalence actually of depression in retirement is much, much higher than is discussed. It should be talked about more because as much as we talk about on our side, how the money is going to be used and how it's going to be there to support you and we plan out for that. Like I encourage everybody to really think about what are you going to do? What are the hobbies? How are you going to fill your time? How are you going to stay active, involved and motivated? Are you going to volunteer? Are you going to travel?

Are you going to garden? Are you going to go get another job? And I'm seeing a lot of people who say, I want to retire, but I want to keep working.

And it's like, wow, that's kind of directly conflicting. What do you mean by that? Well, I don't want to do what I've always done. I say, oh, you mean you want rewirement, right? It's not retirement, but it's just time to rewire where we don't have the same grind. We don't have the same job, the same level of obligation and workload.

We sort of back off, take a breath, but find something to do with your time. If you don't already have that planned and mapped out, like really, really think that through, I think is important because not everybody has a ton of hobbies that are going to fill up all the hours in the day, seven days a week for decades on end. Right.

Maybe start cultivating them now. Yeah, absolutely. Absolutely. So you also need to have the plan to know that you can do all those things and, and, and financially support it, right?

Yeah. Well said, well said. Well, if somebody wants to talk through, again, just creating a spending plan, a budget, which is part of their financial plan, what's the best way to reach you?

Give me a call. And what we strive to do is optimize retirement for our clients. That's why we put together what we have named the optimized retirement plan. It is a five step, five category process in planning and mapping out and writing down and documenting how we will approach income investments, taxes, healthcare, and legacy, so that you don't have to worry about those things. You can figure out what you want to do with life, those hobbies, those travels, those ambitions, do those things, worry about those things. The money is planned and mapped out.

And then there's always changes in the world around us as we continue to see. So the plan has to be a living, breathing document that grows and adapts and changes with the world around us and with your changing lifestyle, which also evolves over retirement. So again, that's the optimized retirement plan. We love to put that together for proactive savers and investors that want lasting financial confidence. Give us a call.

9 1 9 3 0 0 5 8 8 6 9 1 9 3 0 0 5 8 8 6. All right, Peter, thank you. Always a pleasure and thank you.

Hey folks, Peter Rashaan here with Rashaan Planning. So glad that you are enjoying the podcast Planning Matters Radio. You know, one of the tools that we've put out there that people really seem to appreciate and really are our finding of value is at 919retired.com. It is your retirement tax bill calculator. If you've got any kind of retirement account, your tax deferred 401k or IRA, this is the website.

This is the resource where you can go. You can plug in your own numbers, your information. You can slide the tool calculator up and down for your tax rate or your amount of savings and see what your tax bill is likely to be if you default and defer to the IRS's plan versus what you could potentially bring that tax bill down to. A lot of times it is a very significant savings.

So if you have not yet, go to the website 919retired.com. Run your numbers on the retirement tax bill calculator. This has been Planning Matters Radio. The content of this radio show is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. You are encouraged to seek investment tax or legal advice from an independent professional advisor. Any investments and or investment strategies mentioned involve risk, including the possible loss of principal advisory services offered through Brooks own capital management or registered investment advisor, fiduciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services. Advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission which may result in a conflict of interest regarding compensation.