Many people reach their peak net worth right when they retire. This also happens to coincide with the feeling that it’s time to spend some of that net worth after working so hard to accumulate it over the years. However, without proper financial planning and budgeting, this can sometimes lead to a disastrous combination.

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If retirees overspend immediately after they stop working, they may find themselves coming up short in their later years for even the most basic needs. To help avoid that situation, check out this list of purchases that retirees almost always regret, and make sure they fit into your long-term budget before you make a financial misstep.

A Big House
If you’ve grown accustomed to upsizing your house throughout your life, you might feel like when you retire, at the peak of your net worth, it’s time to splurge and get the biggest house of your life. But generally speaking, that is actually the worst time to do that. If you have kids, they have most likely left the house, leaving you and perhaps your spouse alone to both occupy and maintain a large home. In other words, except for entertaining purposes, you likely won’t ever use most of your giant home. In the meantime, all of your other expenses will increase, from your property taxes to your heating bills to your maintenance costs. At a time when you have shut off the main source of your income, dramatically increasing your expenses is the last thing you want to do.Take Our Poll: Are You Concerned That Social Security Benefits Will Be Reduced During Your Lifetime?

Big Travel Experiences
Many older Americans have travel on their minds when they finally retire, and that’s a great way to occupy your time. However, if you blow a big chunk of money on a round-the-world cruise for two the moment you retire, you could be crippling your future financial well-being. Not only will that money immediately go out the window, but you’ll also be losing up to 30 years or even more of investment returns on that cash. While there’s nothing wrong with traveling after you retire, try not to get overexcited and blow five or 10 years of your retirement budget in a single outing.

Luxury Items for Friends and Colleagues
Those who are generous in mind and spirit might see retirement as the time to spend on nice gifts for friends and former work colleagues. While tokens of appreciation are always in good taste, it’s important to balance kindness toward others with the preservation of your financial well-being. If you retire with $1 million, for example, you might feel like you can afford to buy cruises or cars for special people in your life. But at tens of thousands of dollars per shot, you’ll find that $1 million won’t last you very long at all, especially if you have 30 or more years of retirement ahead of you. Feel free to be generous, but keep your gift-giving within reason.

Early Gifts to Children
For many retirees, the urge to give money to children is even stronger than the desire to buy gifts for friends and colleagues. In some cases, providing early gifts to children can be a valuable part of an estate-planning strategy. But if you intend to fully support your adult children or shower them with boatloads of cash, you’re likely to regret it. Not only do you run the risk of denying them self-sufficiency, you may find that you’ll need that money back in your twilight years — when it’s no longer likely to be in their possession.

Expensive Cars
Expensive cars fall into the “I earned it so I’m going to spend it” category when it comes to retirement. While it’s completely understandable to want a comfortable car when you retire, you’ll have to balance the costs with your budget. Remember that an expensive car is an ongoing expense, not a one-time purchase. Luxury cars tend to have higher maintenance costs, higher insurance premiums, and higher fuel costs, as many require premium gasoline. Plus, luxury cars tend to depreciate rapidly. Be sure to factor in all of these costs when deciding if you can truly afford an expensive car without damaging your long-term standard of living.

Online or TV Shopping
One of the things that people look forward to most when thinking about retirement is additional free time. However, if you’re financially undisciplined, your free time could end up costing you. If you’re prone to late-night TV solicitations for “only available on TV” products, or if you spend a lot of time on the computer visiting shopping sites like Amazon, you may find that you’re spending a lot more than you used to when you were working and your free time was occupied. Typically, items that people buy when they are bored tend to be nonessential and regrettable. Keep an eye on your spending after you retire, and realize that you don’t have the same steady income that you used to have while working.

Extra Insurance
Insurance is important to have as a retiree. But overspending on insurance you don’t need is wasteful and can be an unnecessary drain on your nest egg. Life insurance is a great example. Typically, working adults take out life insurance so that loved ones are provided for in the event that a family breadwinner passes away prematurely. But by the time you retire, your kids have likely completed their education and are out of the house, and your home mortgage is likely nearly or fully paid off. While you might want to keep a small policy to help your spouse in case you pass away, you won’t likely need the $1 million-plus policies often taken out by younger workers.

A Vacation Home
A vacation home is a fun way to spend time with friends and family, but it’s often a purchase that retirees regret. For starters, you’ll be dramatically increasing your expenses at a time when you’re turning off your main source of income. In addition to your mortgage, you’ll have to add property taxes and maintenance costs to your retirement budget. Second homes also typically have more unfavorable tax consequences. Over time, you may find that you don’t even use your vacation home as often as you thought, as you now have the freedom to travel to more places in the world. More From GOBankingRatesSNAP Schedule: When Can I Anticipate August 2022 Payments?
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This article originally appeared on GOBankingRates.com: 8 Purchases Retirees Almost Always Regret

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