The harsh truth about a retirement spending spree
Ten years into retirement, some Australians can be tempted to go on a spending spree but "we deserve it" doesn't always cut it financially
Self-funded retirees can be affected by a "mid-term retirement extravagance" syndrome, which can have an impact on their otherwise carefully managed finances.
Sometimes, after about a decade in retirement, some retirees can be tempted to go on a spending spree.
It might be buying the luxury car they have always wanted, or taking an extravagant holiday while they feel able.
This is fine and indeed should be encouraged if retirees can easily afford it.
However, they need to ensure such spending does not affect their longer-term financial situation, including the quality of care they will be able to afford in their final years.
It is a mistake to think they will need less income in the later years of their life, as they become less active.
Quality of life for retirees needing care can vary enormously, and aged care and medical needs are increasingly expensive.
Healthcare costs can rise dramatically after the age of 70.
The aim for retirees should be to achieve a happy balance between enjoying life now but also making sure there is enough to cover their future medical and support needs.