By Lee Munson
I’m going to let you in on a little secret: Getting old is no fun. But money can smooth over many of the aches and pains of growing older. Over the last 25 years, I’ve seen people do things with money that would blow your mind or bore you to death. Below I’m going to break down the top three best and worst ways my wealthy clients have used their cash to make their lives better.
For context, remember that most of us will crystalize our spending habits by the time we are around age 55. So, if you clipped coupons and drove miles out of your way to get cheap gas, that probably won’t change with age. However, when you have amassed a seven- or eight-figure nest egg, eventually you will figure out that you can’t take it with you. If you were a good saver, you will realize to your dismay that you probably don’t have the lifestyle to burn through all that cash. Why? Most people entering their 60s are in denial about how the aging process works.
Let me spell it out. By the time you get into your mid to late 70s, you will be a different person – unable to keep up the same pace of spending as when you were in your 60s. This decade’s leap is very different than those that occurred from your 40s to 50s, or your 50s to 60s. My point is, do you have the courage to enjoy the fruits of your labor? If the answer is yes, below are the top things I find most worth my money.
Travel with some dignity
Still flying coach or staying in the cheap room on cruises? Once you get to a certain age, traveling gets hard on the body. Those who continue to pinch pennies and travel as if they are poor students eventually get turned off and just stop going. If you have the means, then now is the time to upgrade. I recommend that my wealthier clients start flying business class. The seats are more comfortable; you get to board with ease; and when your flight is canceled, you are the first in line to get on the next plane to your destination.
How many more trips will you be able to take in your life? Having a nice room to relax in and recharge on a vacation allows you to maximize your enjoyment. Clients say they always got the cheapest flights and budget rooms when they were planning with a family and had a large mortgage to pay. I get it. It’s difficult shifting your mindset to spending money on you, rather than on the kids, the mortgage, and the retirement portfolio. Keep trying.
Rock on in the grown-up section
Would you have ever thought that you’d still want to go to rock concerts in your 70s? There is a direct correlation between our aging society and the advent of VIP and “Artist” ticket packages for most music festivals these days. Simply said, nobody over 40 (or 60!) really wants to be pushed around in the crowd, stand in long lines for a beer, or use the facilities with a million hopped up kids. The point of VIP tickets for music and sporting events is all about a clean restroom, higher security, shorter lines for vending, and places to sit in between sets. This isn’t about feeling special; it’s about feeling like you can enjoy the show among grown-ups. Well, it’s a little bit about feeling special. Remember to maximize the experience, regardless if that costs more money or not.
When you join a special group (like Popejoy Hall’s Benefactor Program, which provides access to the VIP lounge), you get to meet other people who love what you love. Meeting other people who like to spend money on what they have a passion for is half the reason to upgrade.
Visit with a doctor for as long as you need, when you need it
Nothing is better than calling or texting your primary care physician and telling them what is going on and getting a response. Remember the old days when you could just ask to talk to the doc? Now you spend months waiting for the appointment only to receive a 5-minute meeting that seems like a huge inconvenience to your doctor.
Consider using a direct pay physician. Also called concierge docs in fancy places like Beverly Hills, they are simply doctors who limit their patient count and charge an annual fee to be available. Nothing is better than having an entire hour to go over with a qualified doctor all the ailments, trials, and tribulations of getting old – not to mention a single point of contact who knows everything that is going on with you.
Some people are very resistant to paying anything over their co-pay. That isn’t the world we live in anymore. If you want to access the best medical care in the country, either pay for it, or get in line with everyone else.
Now, here are a few things that I personally don’t think are worth a larger financial outlay.
Cars, I could care less
Sure, I love cars and I have a core group of clients who enjoy expensive high-performance autos. However, there is a distinction between a client who always wanted that special sports car but elected to wait until children were out of the house and had the time to enjoy the car, versus buying a fancy car because you are trying to spend money before you die. If you are not a car enthusiast, why become one now? Just make sure you have an updated car with all the new safety features to give you the best chance of not dying prematurely in an accident. That can be had for less than you think.
Second homes, yawn
Some people think that being wealthier means having multiple homes. I know a few nine-figure people and a couple of billionaires. They have multiple homes. It’s a pain in the rear.
While a second home sounds like a great idea, I recommend most clients simply rent cool homes temporarily, giving them the option to try new locations. Think about it. If you are 65, how many years do you want to go back to the same place in the winter or summer months? Before you spend a few hundred thousand dollars or even a cool million (or two or three) on a second home or condo, think about how many places you could visit and travel to on that same amount of money.
Leaving a huge inheritance
The big difference between the pre-boomers and boomers (pre-1945 or after) is that pre-boomers tend to spend less in retirement and leave all their money to their children, never really enjoying the fruits of their labor. Blame their parents who never let them forget about the Great Depression. Boomers, on the other hand, are more often thinking of themselves first and leaving money to the children last. I think that is a good thing in retirement.
Many of my retired clients want to give money to help others before they die – whether helping a relative with a down payment on a first home, college tuition, or just supporting an adult child with their finances. I’m not advocating for retirees to support their adult children, but if that is a wish, it may be worthwhile to consider what the money could do for their lives now, versus 20 years from now. While I would caution people to think before giving money to family, the idea of holding off any gift until you die is an old idea – many of us will live long enough to see our kids retire.
Even if you don’t have a large nest egg to lean on, remember that once you have the basics in life paid for, pay yourself first. Spending on yourself may be a difficult thing to do if especially if your values are the very reason you now have the money in the first place. Or, as a client was told by his dad: It’s OK to be broke, and it’s OK to be old, but it’s not OK to be broke and old at the same time. Great advice, just don’t forget to treat yourself today for doing the right thing.
Lee Munson is a certified financial planner and chartered financial analyst in Albuquerque.