I’m a Retired Boomer: 6 Things I Spend My Savings on That Are Worth It
Average annual spending among U.S. households is $97,319 for 45- to 54-year-olds, according to the U.S. Bureau of Labor Statistics, but that amount drops significantly with each passing decade. By ages 65 to 75, boomer households spend just over $65,000 a year. How they spend also changes.
Housing costs typically drop, for example, and medical costs often increase. For most, spending on things like transportation and entertainment remain relatively stable, according to Fidelity. But there are exceptions, as GOBankingRates learned in an interview with a retired boomer who has clear priorities for how he spends his money.
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The retiree, who asked to be identified as Steve Sommers, formally retired from his university faculty position in 2014. His worthwhile expenses are a diverse collection, but each one satisfies one or more of the following goals:
Enjoyment.
Staying entwined in the world. “Most are social events, and it’s commonly believed that keeping connected with people is an antidote to Alzheimer’s,” Sommers said.
Keep moving. “Again, important to the ‘aging gracefully’ process.”
Learn new things.
Keep or sharpen skills.
Make “fun” money.
Travel
Travel satisfies all of Sommers’s goals except for making fun money. “Most of my travel is self-reliant, so learning and skills do enter into it,” he said.
According to an interdisciplinary study by researchers at Edith Cowan University in Australia, travel doesn’t just help you age gracefully — it might actually slow the process.
The study, published by the Journal of Travel Research in August 2024, found that positive travel experiences help the body maintain a low-entropy state — entropy being the state of disorder eventually resulting in death. Being in new settings, relaxing and engaging in physical activities all contribute to the beneficial effects.
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Track Events and Car Collecting
Sommers participates in “high-performance driving events,” or HPDEs, on bona fide race tracks.
“While not truly racing cars, well… it is racing cars,” Sommers said. “And a weekend is almost as pricey as truly racing cars,” he added.
Contributing to the expense is the towing rig he uses to transport his cars. “Money I don’t have to spend, but do,” Sommers said.
These events check each of Sommers’s boxes except one, which is making money. But another of his worthwhile expenses, collecting cars, will eventually help fill that gap while contributing to each of the other five goals.
It’s worth considering what hobbies you might participate in after you retire, and earmark some of your saving for them, if necessary. Studies show that engaging in activities that are meaningful to you reduces the risk of a host of diseases, promotes longevity, preserves cognitive function and encourages happiness and resilience, according to the National Institute on Aging.
Recreational Investing
Recreational investing in stocks and crypto isn’t a physical activity, but it meets Sommers’s criteria in every other way.
“While investment firms handle the real money, I do put some into Robinhood just to play around,” he said. His play portfolio has some unique holdings, such as shares in the Empire State Building.
“Yeah, it’s a thing — and it’s going up,” he said.
You can invest in the New York City icon by purchasing shares in Empire State Realty Trust, the real estate investment trust that owns the building. One benefit of investing in REITs is that they’re required to pay out 90% of their profits as dividends to investors.
Rental Property
Sommers wonders if he should sell his investment property while the seller’s market is still strong, but as it is, the property is the one worthwhile expense that meets every one of his goals.
Rental properties diversify your portfolio while producing income and, over the long term, appreciating in value. Using a property manager to collect rent and take care of maintenance makes it a more passive investment, but managing it yourself provides all the benefits Sommers enjoys.
Lifestyle Upgrades
The last worthwhile expense on Sommers’s list is about enjoyment, pure and simple. When he flies, he flies first class. Time for a new TV? Find the biggest one, with the best sound. And forget shrink-wrapped steaks from the supermarket — Sommers buys his meat from the butcher.
Planning Your Own Retirement Spending
The things you consider worth spending on in retirement will depend on your own goals and the cash you have available to meet them.
You can expect to spend 55% to 80% of your current income after you retire, according to Fidelity. But you’ll likely need more if you want an active lifestyle — about 15% more, in fact.
One way to keep your goals on track is to create a retirement spending plan. The U.S. Department of Labor has a free retirement-planning resource with worksheets and calculators you can use to track your current assets and expenses, and make projections for the future.
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This article originally appeared on GOBankingRates.com: I’m a Retired Boomer: 6 Things I Spend My Savings on That Are Worth It
