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I just wanted to get the opinion of retirees, especially those that have been retired for a number of years, what percent of your wealth do you consider acceptable to spend on cars in retirement?
Wife retired at 54 a couple years back and I'm getting ready to retire in the next few months and I was wanting to get the opinion of retirees.
We bought a new car recently for wife and I'm thinking of buying a very exciting car for myself and added together, it would constitute about 5% of our wealth (we won't have a note, pay cash)....do you think that's too much and if so, what do you recommend or if you think that's too little or not a problem, I want to hear that too.
Our pensions, investment income, SS should be easily sufficient to live on. Yes, we could conceivably get by on one vehicle but we are both pretty active and we live in an outer suburb so public transportation is not really feasible.
We just did a remodel project (I built a 625 sq ft wood shop for me), which is a discretionary expense, i.e., not really needed. Kind of like a new car. I spent about 4% of our wealth on it. But (and a big but here), we are in our late 60's so our money does not need to go as far as yours, and we don't spend that much money on living expenses, about 3% of our wealth annually goes for just living. Besides, it increased the value of our house which is somewhat recoverable. Hope that helps.
I don't care for the word "acceptable" in the thread title.
"Acceptable" carries a moral connotation. I suppose if a person is spending so much on a car that he or she will be on the government dole later on, then that is not "acceptable" because the rest of us will be paying for it, albeit very indirectly. Clearly, that is not the OP's situation, therefore whatever he wishes to spend on car is "acceptable" in my book.
I find the entire original post somewhat bizarre. OP, do you feel guilty about your proposed purchase? Why else would you seek the approval of strangers? You want a car which is above and beyond the standard of simple utility and practicality, so if you can afford it without the danger of being destitute later on, of course it's acceptable. We all have areas where we like to splurge somewhat because our values are different.
For some people, the desire to enjoy a high-performance car is well worth the cost, whereas other people would never even realize that the car they are driving is a "high-performance" car. Most people are not really "drivers" in that sense; that is, they may have a license and may be quite safe at low speeds, but they have no clue about the finer points of driving and no joy in cornering, etc.
Such "non-drivers" will never understand your desire to have a real car, because for them the purpose of a car is getting from one place to another in comfort. There is nothing wrong with that utilitarian mind-set, in which a car is like an appliance, like a fridge or a washing machine. It's just that there are some of us who really like driving.
I just asked for the opinion of retirees on what they considered acceptable % of wealth to use on their cars in retirement, I don't feel guilty or need the approval of strangers, you are making up things about my thread that have no correlation to what I asked....I consider your response quite bizarre.
If the "acceptable percentage of one's retirement wealth" is a factor in one's decision to buy a new car, one is probably not in the affordable new car range.
I did not read the thread title or the OP's post the same way that you did.
It is clear to me that the OP just want to know what criteria other retirees use to decide how much to spend on a car FOR THEMSELVES.
The question which I bolded simply means "what is personally acceptable to a person?". The OP neither asked people to judge his purchase decision nor to decide for him how much of his wealth that he should spend.
The OP emphasized seeking opinions especially from people who have been retired for a number of years. My read is that since he has not retired, he does not have a good feel for what level of spending is appropriate or prudent in retirement.
Bottom line is that I think you and maybe few others read too much between the lines. I neither find the question bizarre nor think that the OP feels guilty about his proposed purchase.
True, he and others are making up things about my post that had no correlation to what I asked....I consider those responses bizarre or just mean spirited.
I don't think you can have a set percentage. At least most people can't. I drive a 13 year old car and probably spend more on it than it is worth but it suits me. I have a little pick-up truck that is about nine years old. Other expenses pop up unexpectedly. I had to get a new well pump a while back. I had to get the leaking roof resealed on my storage shed. The refrigerator died about the same time. There might be a window next spring when I can consider replacing the car but there's no guarantee that something won't get in the way.
Recent article in the WSJ said those with income above two commas seldom purchase a new automobile. Majority buy high end and used. Savings is the main factor because one does not surrender immediate loss due to fast depreciation. It went on to say that if wealth is above 10 million then this is no longer considered.
Some of my retired friends spend a lot on cars and they do quite well trading and selling... it is a hobby for their retirement years... and one even buys new investment grade.
Most buy cars like Packards and Shelby Cobras... as a percentage they have made some significant purchases.
In 2006 my retired former boss at my first job paid 160k for a new Ford GT... he wanted it pure and simple... he never made more than 100k a year working and no pension... but his hobby was collector cars and specifically retired race cars... and it proved lucrative.
He enjoyed the Ford GT for 5 years... really enjoyed it and with the new car warranty ending and being 70 decided to sell it and it sold for 210k... so 50k appreciation plus the bragging rights.
His daily drive... a 15 year old Toyota Tacoma with a manual and 4 cylinder bought used 12 years ago...
I just wanted to get the opinion of retirees, especially those that have been retired for a number of years, what percent of your wealth do you consider acceptable to spend on cars in retirement?
Not retired, but I'm going to say it depends on how much you love cars.
If you've always wanted to get that Porsche or mint classic car and you can afford it, just go ahead and get it.
On the other hand if you're just interested in getting something to drive around in I'd get a few used cars & learn to do some basic maintenance & repairs. When/if one needs something fixed you'll always have the second. Could even get a third that you keep around just for long trips/vacations assuming you're the type who likes to drive.
Pretty much for what you'd spend on a lower end new car you can have two nice used cars with little wrong with them (if anything at all).
Either way I wouldn't spend more than $12,000 to $15,000 in total.
That price range would even give you the option to get something like say an 80's BMW if you wanted.
Quote:
Originally Posted by mathjak107
I worked my entire life at not being poor since that is how I started out . we scrimped ,saved and learned all we could about investing.
the goal has always been to live better in retirement than we did while raising a family and having to save .
we don't want a step down in retirement , we want a step up in what we do .
I've never really understood the thought process of waiting until retirement to enjoy life. It's much better to enjoy what you're interested in while you're young (you just have to know what you really enjoy & just spend on those things).
For most people there isn't a whole lot to learn about investing it's just admitting you're not going to beat the market, get index funds, a few other things, and own your own home and maybe a rental property or two at a great rate.
Last edited by Port Pitt Ash; 09-16-2017 at 05:24 AM..
Not retired, but I'm going to say it depends on how much you love cars.
If you've always wanted to get that Porsche or mint classic car and you can afford it, just go ahead and get it.
On the other hand if you're just interested in getting something to drive around in I'd get a few used cars & learn to do some basic maintenance & repairs. When/if one needs something fixed you'll always have the second. Could even get a third that you keep around just for long trips/vacations assuming you're the type who likes to drive.
Pretty much for what you'd spend on a lower end new car you can have two nice used cars with little wrong with them (if anything at all).
Either way I wouldn't spend more than $12,000 to $15,000 in total.
That price range would even give you the option to get something like say an 80's BMW if you wanted.
I've never really understood the thought process of waiting until retirement to enjoy life. It's much better to enjoy what you're interested in while you're young (you just have to know what you really enjoy & just spend on those things).
For most people there isn't a whole lot to learn about investing it's just admitting you're not going to beat the market, get index funds, a few other things, and own your own home and maybe a rental property or two at a great rate.
On what do you base that $12,000 to $15,000 amount? The car I'm likely going to buy is many times more than that and has a top speed over 200 mph. What this thread has shown me is that I analyze things to a far greater degree than the overwhelming majority and no one else really looks at their car purchases and considers what that does to their wealth.
About your comment on admitting that you can't beat the market and better to go with an index fund.
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I agree . jeep wrangler sahara with a 2018 Subaru outback being made now .
