How Retirees Can Make the Most of Their Money


If you’ve retired with sufficient money in the bank, your mission may be to live your remaining years in luxury. But if you spend your money indiscriminately, or on the wrong things, you may end up wasting it. Fortunately, there are a handful of spending strategies that can help you make the most of your material wealth.

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Primary Goals

Your strategies and choices should be motivated by three main goals:

1. Maximizing your time. When you enter retirement, time becomes more important than money. If you want to make the most of your wealth, you need to increase the number of years you spend alive and in good health—and that means optimizing your health.

2. Maximizing your happiness. You should also focus on spending money in a way that actually makes you happy; in many cases, what people think makes them happy isn’t what truly makes them happy.

3. Preserving your principal. You also need to make sure you don’t outlive your principal, guaranteeing your ability to live a luxurious lifestyle no matter how many years you have left.

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Key Strategies

So what strategies can help you achieve these goals while still living a life of luxury?

Adopt healthy habits. First, make your health a top priority. Adopt healthy lifestyle choices, including eating a diverse diet rich in fruits and vegetables and exercising on a daily basis. You’ll also want to use supplements and regular activities to prevent age from taking its toll on your mind and brain. While these habits might take some extra time out of your day, they’ll be worth it in the long run, helping you stave off illness and live a longer, healthier life.

Diversify your investments. If you’ve made it to retirement with a massive sum of wealth, you probably don’t need any investment advice. But don’t get arrogant in your later years; it’s important to keep your portfolio diversified, and rebalance it on a regular basis. It’s tempting to funnel the majority of your wealth into assets and securities with minimal risk, but you’ll also want a significant portion of your wealth in assets with a high potential growth rate, such as stocks. The key is to avoid too much exposure in any single area.

Choose experiences over things. Multiple studies confirm that people are much happier spending their money on experiences instead of tangible things. That doesn’t mean that tangible things can’t make you happy, or that you shouldn’t spend your money on them; on the contrary, getting a new car you’ve had your eye on or indulging yourself in the latest fashion trend can make you feel good. But don’t get carried away; instead, consider spending most of your money on travel, entertainment, and other experiences that you’ll be more likely to remember. The vast majority of people end up happier when they spend their money this way.

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Don’t tie money to happiness. Try to avoid making the link between money and happiness; for example, don’t assume that the most expensive house on the block will make you happier than a modest abode in the same neighborhood. After all, research shows that there’s no correlation between additional money and happiness after the $75,000-per-year mark. Having a reliable income will make you happier than living in poverty, but at a certain point, merely spending more money isn’t going to have a measurable impact on your happiness. Consider more than just the price tag when you’re shopping for new things or considering how to spend your time.

Give back. If you have money to burn after getting everything you want, at least on the surface, consider giving back to your community in any way you can. Research suggests that donating money to charity or contributing positively to your community in other ways can make you happier. Find a local organization to support, or consider redistributing a portion of your wealth in other ways.

It doesn’t matter how much money you have. What matters is that you’re able to live comfortably, and as long as possible, in a way that makes you truly happy.

Adopt healthy habits