[Money Wise] One surprise that hits retirees in their first few years is that even without the costs of working and contributing to retirement accounts, they end up spending more than when they held down a job.Financial planners cite three retirement phases: Go-Go, Slow-Go and No-Go. In the Go-Go years, typically 65 to 75, healthy young retirees spend big on travel, hobbies and scratching life-long dreams off their bucket list. Retirees are less active between 76 and 85 in the Slow-Go years, and tend to spend their No-Go years of 86 to 100 quietly.
And it’s during those early Go-Go years that retirees with pent-up dreams for their golden years often make big purchases that they can end up regretting.
Regular lavish travel
The first years of retirement can be a never-ending vacation, but endless expensive trips can create a serious crack in your nest egg.
Travelers tend to underestimate daily costs, such as meals, tips, resort fees, costs of excursions, airport costs and more, as well as paying for someone to care for your home while you’re gone.
A four-day vacation within the U.S. costs on average $144 a day, while a 12-night international jaunt costs around $271 per day, based on analysis from ValuePenguin.
And several big trips at the start of your retirement means big withdrawals that limit the growth of your investments for the next 20 or 30 years. That can mean you’ll have less to rely on when health care expenses typically rise.