From Career to Leisure: Can You Afford Your Ideal Retirement?

How to Spend on Leisure with Confidence

Whether you dream of bucket-list adventures, leisurely lunches with friends, or new hobbies that fill your days, retirement can be the most fulfilling—and surprisingly costly—stage of life. A two-week trip to Europe with your spouse could easily run five figures. Initiation fees at a private golf club may cost the same. Even eating out a few times a week can add hundreds of dollars a month to your food bill.

The sticker shock of leisure expenses can create anxiety, even for investors with substantial savings. After years of saving, the shift from a steady paycheck to living off your nest egg can feel emotional. But being too cautious can also be a mistake: financial consultants often find that clients who hold back on early retirement dreams out of fear later regret missing those experiences.

The solution? Work with a financial consultant, advisor, or coach to build a spending plan that balances your leisure goals with a sustainable withdrawal rate so your assets last. As you crunch the numbers, weigh these three key factors.

1. Your Personal Definition of “Essential”

Start by adding up all non-negotiable expenses: housing, food, insurance, health care, cell phone, and transportation. Remember to include smaller, regular costs that add up, and larger periodic expenses.

“When I sit down and do a budget analysis, I poke holes in it,” says one financial coach. “I’ll ask, ‘Are you sure you’ll never need a new car?’ or ‘I don’t see any costs for your hobbies or pets.’”

Be honest about what truly feels essential to your happiness, even if it isn’t strictly necessary to keep the lights on. If visiting your grandchildren several times a year or holding season tickets to the ballet makes retirement meaningful, build it in.
Also consider whether you might help children or grandchildren with education costs, a down payment, or a wedding—and whether you hope to leave a legacy.

2. Your Expected Post-Retirement Lifestyle

Retirement opens hours once filled by work. How will you spend them?

If you plan to be very active, traveling, taking classes, playing sports, your budget should reflect that. Fidelity research suggests an active lifestyle can raise overall retirement costs by about 15% compared with a less active one. Many retirees underestimate what they’ll spend on travel or new hobbies.

Expect leisure spending to decline with age, while health-care costs generally rise.
Couples should discuss their visions of retirement openly. Your spouse may imagine three rounds of golf each week while you’re planning to check off travel destinations. After 30 years together, you may still have very different pictures of retirement, and that’s important to reconcile.

3. Your Predictable Sources of Income

List every potential income stream and use after-tax estimates for taxable accounts.
This includes:

• Withdrawals from IRAs or other retirement accounts

• Dividends and interest from investments

• Part-time work or business income

• Predictable sources such as Social Security, pensions, rental income, or lifetime income annuities

Ideally, structure your retirement income so essential expenses are covered by predictable sources. Clients with guaranteed income—such as Social Security plus a pension or annuity—tend to spend more comfortably, while those relying heavily on the market often cut back during volatility even if their plan can handle it.
If market swings might tempt you to slash leisure spending, you might combine a diversified growth portfolio with a fixed lifetime income annuity.

Planning for Trade-Offs

If you discover a gap between your estimated income and your desired lifestyle, you have options:

• Increase savings now or reduce current spending.

• Work a bit longer or plan for part-time income.

• Use an asset-location strategy to improve after-tax returns.

A financial professional can help you review investments, future income needs, and projected expenses, and even “stress-test” your plan under different market scenarios. With a great financial plan, you won’t have to cut all your leisure spending if markets wobble or life throws a curveball.

The Bottom Line

A retirement budget isn’t just about keeping the lights on, it’s about defining what’s essential to your happiness, anticipating your lifestyle costs, and aligning them with reliable income, you can enjoy those long-awaited bucket-list trips, hobbies, and lunches with friends—confident that your wealth will support you for years to come.

Ready to build a financial plan that supports your dreams?

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