Retirement Lifestyle Creep: 6 Signs Your ‘One-Time’ Splurges Are Becoming Permanent
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Jordan Rosenfeld
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Molly Sullivan
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Retirement is supposed to be the time when people get to enjoy the lives they’ve worked decades to build. But with more free time and fewer financial guardrails, some spending habits can become problems, particularly splurges.
Experts shared seven signs that a well-earned splurge is becoming something much harder to scale back.
1. Your ‘Occasional’ Hobbies Are Now Daily Habits
Lifestyle creep, the gradual increase in spending on nonessentials over time that becomes part of your regular spending, “is more dangerous when you are retired,” said Angie Welsh, founder and president of My Annuity Agents. This is a time when income is generally fixed or less flexible and there is no pay raise or bonus coming down the road to bail you out.
Extra free time can turn occasional indulgences into everyday expenses without you realizing it.
“Golfing every day can get very expensive, and shopping for fun because you have free time will kill a budget,” Welsh said.
2. One Big Trip Turns Into Several Per Year
Travel is another source of retirement spending creep. “One big trip may turn into three or four during [the year] and dining out on weekends may become a daily habit,” Welsh said.
Or what might start off as a memorable retirement trip can turn into a yearly vacation, according to Adem Selita, co-founder of The Debt Relief Company.
3. New Recurring Services Sneak Into Your Budget
Small recurring expenses can add up gradually over time, like high-end club fees or hiring a weekly gardener, said Nate Willardson, a CFP and managing partner at Currents Wealth Strategies.
Home renovations can also be another big one, Selita added. More time at home can lead to a desire to renovate. “This can start off innocently with small upgrades in the bathroom but then lead to new kitchens, revamped interior designs, etc.,” he said.
“Awareness is the key to keeping one-time splurges from becoming a bad habit,” said Aviva Pinto, a financial advisor and managing director at Wealthspire. “I tell my clients to take a look at their bank statements and credit card bills and compare them with the month before. If the new statement is substantially higher, they need to identify the areas where they overspent so they can be more careful going forward.
4. You’re Dipping Into Investments To Cover Monthly Spending
One of the clearest warning signs is when you’re “routinely pulling cash from your investment portfolio beyond your safe withdrawal rate to cover routine monthly expenses,” Willardson said.
Welsh added that if your consistent income sources, like Social Security, annuity payments or interest income, are not meeting your monthly expenses, “an evaluation of your budget and your long-term plan is necessary.”
5. You Feel Uneasy About Spending but Do It Anyway
You might get a gut feeling before the evidence shows up in your bank accounts. “One of the signs is feeling hesitant to spend money but doing it anyway,” Welsh said. The internal conflict may be a red flag that just hasn’t been demonstrated on paper yet, but trust that hesitation, she said.
Selita warned to pay attention to “whenever you start making rationalizations for purchasing or spending behavior.”
6. You’re Increasingly Worried About Market Drops
If you find yourself obsessing over market volatility, it may be because your spending depends too heavily on your portfolio.
“Market loss is a part of any portfolio, but the concern for being forced to sell when the market is down is a legitimate risk,” Welsh said.
Why Lifestyle Creep Is Riskier in Retirement
Unlike during your working years, there’s little room for error once income is fixed. “Overspending can rapidly deplete your principal on a fixed income,” Willardson said.
The biggest risk is running out of money before your retirement ends and having to rely on others or end up going back into the work force, Selita warned.
How To Reset Before It Becomes Permanent
Retirees don’t need to eliminate enjoyment, but be intentional about your budget.
Welsh advised creating a “baseline” budget and a “lifestyle” budget. Then, “determine which lifestyle budget items provide the most fulfilment and enjoyment and start cutting the rest before lack of money forces a cutback of all lifestyle budget items.”
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