With skyrocketing costs for groceries, healthcare, insurance, and more — coupled with experts estimating the need for nearly $1.26 million to retire comfortably — you may wonder if splurging in retirement goes against all common sense. The thing is, there’s a big difference between recklessly spending on items you’ll never use, versus occasionally splurging on items or experiences for enjoyment, rather than necessity.
Yet, about 25% of people spend less in retirement than in their working lives, even if they are financially well-off. For many, the habits that helped you build wealth, like hard work, fiscal restraint, and diligent saving, can become obstacles to enjoying your retirement. While it pays to be responsible with your money, especially if you’re on a fixed income, there are ways to splurge without giving up your financial security.
It’s totally worth making your house a home
You’ll likely spend a great deal of time at home in retirement. That’s why having a comfortable home — both physically and emotionally — is so important, and worth splurging on. While you might be open to spending money to renovate in a way that helps you age in place, not everyone is comfortable with spending money to make changes that are purely for aesthetic and comfort.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Upgrading to new appliances for the first time in ages, buying some new backyard furniture, or swapping out that ugly old carpet are renovations that can be well worth the cost. Just because you’ve lived this way for the past 20 years doesn’t mean you can’t indulge yourself a bit to be comfortable in your own home.
It’s totally worth spending money on good food
Robert F. Kennedy Jr., Trump’s new Secretary of the Department of Health and Human Services (HHS), is “going wild on the food,” signaling a possible shift in our nation’s nutrition policies. Considering that diet-related illnesses cost more than $1 trillion annually, shaping our eating habits can, in all likelihood, lead to better health outcomes.
On average, retirees aged 65 and older spend about $4,938 annually on food, or about 25% of their monthly expenses. In comparison, the average American household spends around $9,826 per year on food. That’s nearly a $5,000 difference.
When the cost of groceries has increased by approximately 25.8% from November 2020 to March 2024, you may hesitate to dip too far into your wallet just for food. Even so, eating a healthy diet can help reduce future medical costs by preventing chronic diseases and promoting overall well-being. By prioritizing healthy eating, you’ll not only improve your health and well-being but also save significantly on medical expenses over time.
It’s totally worth treating yourself (if you can pay all your bills)
Living a happy and healthy life is more than just about paying the bills. While wise financial management is key for a comfortable retirement, it doesn’t mean you have to pinch every penny. This is especially true if you are well-off financially and can afford to buy the gadgets you want (or need). After a while, if you no longer want or need it, consider having a garage sale (and meeting your neighbors) or selling it online.
It’s totally worth having a hobby
Someone once said, “If you want to feel rich, just count the things you have that money can’t buy.”
According to research by AYTM and Harvard University, approximately 67% of American adults report having multiple hobbies, and 85% consider having hobbies to be important in their lives. It appears that there is a direct connection between pursuing interests and a person’s level of satisfaction with life.
Since you have an extra level of freedom in retirement that you didn’t have when you held down a job, there’s no reason to deny yourself the pleasure of a hobby, especially if it costs little to nothing at all, like birdwatching, planting a garden, or going to a car show. When you choose to spend money on experiences, happiness just seems to follow.
It’s totally worth bequeathing your money to your heirs
You can care for others without sacrificing everything, and leaving an inheritance for your kids is deeply fulfilling. Gifting money or assets now lets them benefit from your wealth when they need it most. The IRS annual gift tax exclusion for 2025 is $19,000 per recipient. Married couples can gift up to $38,000 per recipient by electing to split gifts.
It's totally worth spending some money on yourself
Saving for retirement is fiscally smart, but it’s okay to treat yourself sometimes — without the guilt. Worrying about running out of money is normal, but if you budget for spending, pay your bills, and maintain an emergency fund, splurging on travel, a dream car, or a vacation can be rewarding.
Finally, how much should you splurge during retirement?
Assess your finances honestly to determine how much you can spend on yourself. If your current habits cover basic needs and allow savings, you likely have more to spend than you think. Prioritize paying bills if money is tight, but even a small surplus can fund a dinner out to boost your retirement enjoyment. Avoid a Scrooge mindset — budget for small joys and savor the rewards of all your hard work.
Related Content
-
Think Twice Before Getting a Credit Card Cash AdvanceA credit card cash advance can be a quick solution when you need emergency help with money. But you'll pay for the convenience with high interest and fees.
-
What is AI Worth to the Economy?The Letter Spending on AI is already boosting GDP, but will the massive outlays being poured into the technology deliver faster economic growth in the long run?
-
The Rule of Two Lives in RetirementThe 'rule of two lives in retirement' means accounting for your partner at every decision point, because one life becomes two.
-
Retire in This Asian Country for a Warm Culture and Relaxed LifestyleWith its fabulous beaches, delicious food, and affordability, this Southeast Asian country is a haven for expats from around the world.
-
I'm a Financial Adviser: Three Things You Will Wish You Did Before the Fed Cuts Interest RatesWith potential interest rate cuts on the horizon, you might want to lock in today's higher yields and consider adjusting your asset allocation.
-
Get the Best Car Deal in Retirement: Here's the TrickPlanning on shopping for a new car this Labor Day weekend? Here’s how to haggle for a better price, even though you are retired.
-
Want to Visit Your Favorite National Parks in Retirement? Here's How.Exploring the breathtaking landscapes and diverse wildlife of America's National Parks offers retirees an adventurous way to soak in epic scenery and keep things exciting.
-
Average 401(k) Fund Fees and Expenses: Are You Overpaying?Average 401(k) fund fees and administrative expenses are, in some cases, shockingly high. But don't be misled by gloomy headlines. Here's the skinny.
-
Three Pros (and Four Cons) of Hiring Multiple Financial Advisers: The View From a Financial AdviserThere's nothing to stop you from working with several financial advisers instead of just one. But take a balanced view of the risks and rewards first.
-
How to Keep Your Work Friends After You RetireWork friendships can boost teamwork, lift your spirits, and make the job more fun. But when you retire, these friendships can fade. Here's a look at why that happens and what you can do about it.
