Retirees Be Warned: Avoid This Popular Upgrade If You Don't Want To Bleed Money

During retirement, individuals may be tempted to splurge on a luxury vehicle. Whether as a reward for the decades of savings or for enhanced safety features to keep you and your loved ones safe, upgrading your transportation at this stage in life can sound like a solid plan. However, according to GoBankingRates, upgrading your transportation during retirement can be a huge money drain. Instead of upgrading, individuals about to retire should consider selling their extra vehicles before retirement to save money.

While there are many seemingly valid reasons to upgrade your vehicle during retirement, there are just as many reasons not to. But for retirees, the main concern with this popular upgrade is cost. Getting a luxury vehicle can chip away at retirement savings due to these cars' high upfront costs and ongoing expenses, such as insurance premiums, maintenance, and repairs. What's worse is that recovering from this purchase may be challenging, as luxury vehicles depreciate in value quickly. Conventional retirement advice encourages retirees to invest in assets that earn income or increase in value, but luxury vehicles do the opposite. Their loss in value could also make it harder to recoup your money when trying to sell.

While driving a high-end car during retirement might feel nice, it may not be entirely necessary for everyone, as transportation needs vary widely for retirees. Apart from considering the budget implications of such a major purchase, it's also important to weigh how often you plan to drive and your retirement location. If you live in a walkable community or don't drive much to begin with, forgoing a vehicle and relying on public transit for day-to-day transportation needs is a manageable alternative. This could also be the most budget friendly option for retirees — according to the American Public Transit Association, taking transit instead of driving could save you $13,000 per year. Meanwhile, occasionally renting a car or using a car-sharing service is an excellent alternative for the occasional long trip you cannot take on public transit. 

If you still need a vehicle to get around, buying one that fits your budget and lifestyle may be a better choice than something flashy. Going with this option will still help you move around with ease but spare you the costs of owning a luxury vehicle. There are hundreds of affordable car models out there, but these are a few used cars retirees can consider buying for under $10,000. You should also be wary of particular brands and models even if they are affordable, and it's best to avoid certain vehicles during retirement altogether.