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Savvy retirees seek financial advice in their quest to spread their cash as much as possible. Some of the advice they receive is good. Others, not so much.
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“Retirees get a variety of recommendations for frugal living, but not all recommendations correspond to optimal monetary well-being,” said Keisha Blair, a Harvard-trained behavioral economist and monetary planner and foreign author and best-selling foreign author “Holistic Wealth. “eBook series. Founder of the Holistic Wealth Institute and host of the Holistic Wealth podcast. “As they move toward retirement, it’s critical that Americans compare recommendations seriously, taking into account their specific needs and priorities. Retirees deserve to approach retirement from a holistic approach. Attitude of wealth that improves your mental, emotional, physical and monetary fitness and ensures a balanced life.
Here are some well-intentioned but misguided frugal living tips that retirees should avoid in 2024.
During retirement, you should make every penny count, but that doesn’t mean you should count every penny.
“While budgeting is critical, budgeting too narrowly can reduce quality of life,” Blair said. “Retirees try to balance their day-to-day money jobs with the enjoyment of well-deserved leisure, studies and hobbies. A holistic path to wealth, living in retirement, ensures this balance for a healthy life.
I retired early: here’s my monthly budget
Health is wealth, especially in retirement when medical bills start to pile up as the body breaks down. Saving money by scrimping on physical and mental well-being is not frugality. It’s financial shortsightedness.
“Cutting corners on health-related expenses, like preventive care or necessary treatments, can lead to more significant costs in the long run,” said Blair. “Investing in health today can contribute to a more fulfilling retirement.”
When your friends invite you over for lunch, a movie, or anything else that costs money, you can see it as an opportunity to save money, but letting those social connections unravel comes at a significant cost.
“Saving money doesn’t mean isolating yourself,” Blair said. “New studies show that loneliness in retirement also negatively affects physical fitness outcomes. Maintaining social connections is imperative for intellectual and emotional well-being. Retirees devote resources to social activities and relationships to ensure a satisfying retirement. I would implore them to minimize their spending at all costs, resulting in missed opportunities for enriching experiences. But smart, conscious spending, aligned with non-public priorities, can increase retirement satisfaction without jeopardizing monetary stability.
CPAs, investment advisors, money planners, and other cash professionals are reasonable (at least not the right ones), but retirees deserve to see their fees as a profitable investment, not an expense to be avoided.
“Some retirees may be tempted to manage their financial adventure on their own, ignoring the need for professional advice,” Blair said. “However, seeking advice from financial experts can help them navigate complex investment landscapes and ensure a secure financial future. “
Financial planner Michael Ashley, a former high-level employee of Wells Fargo and Citi and founder of private finance firm Richiest, agrees.
“While frugality is admirable, my recommendation to retirees is not to give up on pro-monetary recommendations,” he said. “Market situations and retirement methods change, and consulting with a monetary planner can provide personalized information. Ignoring pro recommendations can lead to missing opportunities to optimize the source of retirement income and adopt tax-efficient methods.
Many retirees believe that investing is anything they do before they retire to have cash to spend during retirement; However, leaving your career does not eliminate opportunities to increase your wealth.
“I meet retirees who are being asked to avoid investments for fear of risk,” Ashley said. “However, with careful planning and a diversified portfolio, investments can be a must-have component of retirement income. Ignoring investment opportunities can lead to missed opportunities to maintain and grow wealth, especially when you consider the potential longevity of retirement.
When there are multiple editions of a chair, lamp, measuring cup, or whatever else you’re interested in, you may have been told that savvy retirees choose those potential options based solely on price. But this strategy ends up costing more, because the most reasonable edit is the most reasonable, and you end up finishing more to update the reasonable portions that break early. If you’re thinking about buying something, finish it long enough to make sure you’ll only buy it once.
“Going for the cheapest option in all scenarios can be counterproductive,” Ashley said. “Retirees deserve to focus on value and quality, not just price. “
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This article originally published on GOBankingRates. com: 6 Tips for Frugal Living Retirees Should Avoid in 2024
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