5 Ways to Mess Up Your Retirement: Buy a Brand New Car!
What would you say to a “hot” new investment that guarantees you -15% (“negative fifteen percent”) a year for the next 5 years?
Sounds scary? According to Carfax, that is exactly what you get when you buy a brand new car![1]
“The minute a person drives a new car off the lot, it loses approximately 10 percent of its value.”
But wait, there’s more: “On average, a new car will lose 60 percent of its total value over the first five years of its life.”
Given the average new car price is $36,270 according to Kelley Blue Book, that is a sizable investment for all but the most affluent![2]
Our advice? It doesn’t matter if you’re already retired or if you are thinking of taking that next step: we encourage everyone to think twice before spending a big part of your nest egg.
Retirement might be the biggest decision a family or individual can make. Any mistakes you make early on could potentially create a difficult path for you, with often irreversible consequences. On the flip side, wise decisions you make beforehand potentially could make retirement enjoyable and full of great accomplishments along with the possibility of leaving a positive legacy for your loved ones.
In order to maximize your potential for success in retirement, consider these few critical decisions:
- When will you take Social Security?
- Should you pay off debt prior to pulling the trigger on retirement?
- How will you devise a sustainable strategy for generating income?
My goal, as a financial coach, is to help our clients live purposeful, fruitful lives. As my clients approach the crossroads of life decisions, my role is to assist them to navigate through potential choices and consequences. My greatest delight is to see my clients fully understand their options and make the best choices for their future.
[1] “Car Depreciation: 5 Things to Consider”, CarFax on https://www.carfax.com/blog/car-depreciation accessed on May 25, 2018.
[2] “Press Releases: Average New-Car Prices Rise Nearly 4 Percent For January 2018 On Shifting Sales Mix, According to Kelley Blue Book”, Kelley Blue Book, February 1, 2018 on https://mediaroom.kbb.com/2018-02-01-Average-New-Car-Prices-Rise-Nearly-4-Percent-For-January-2018-On-Shifting-Sales-Mix-According-To-Kelley-Blue-Book accessed on May 25, 2018.