Being frugal, saving money, and making all the right financial choices can be tiring for many after an extended period of time. Indeed, saving for one’s retirement is important, but one shouldn’t make too many sacrifices in their everyday life. Undoubtedly, extreme frugality and living far below one’s means can lead to incredibly high savings rates (think saving 70-80% of one’s paycheck).

That said, if it’s taking too much of a toll on one’s lifestyle or psyche, some changes need to be made. Otherwise, one may be tempted to throw in the towel on saving for retirement and start cracking open the nest egg well before they’ve exited the workforce.

In the case of this individual who took to the r/fatFIRE subreddit, asking if he should retire or start making bad choices, it’s apparent that there’s some form of retirement savings burnout going on. The anonymous poster, 49, has a shocking eight-figure sum (net worth of $25 million) in the bank, with an absurd annual income in the seven figures.

I have no idea what this person does, but it’s pretty jarring how much income they’re pulling in and the fortune they’ve amassed. Arguably, the individual could afford to splurge and perhaps even make an absurdly lavish expenditure (perhaps a sports car for that midlife crisis) or two and still be in decent shape to retire.

Key Points About This Article

• A $25 million fortune is more than enough for a “fat FIRE”
• Making bad financial decisions is still a bad idea, and I don’t care how much one has saved or how high their income is!

The “bad financial choices” could add up fast. Not even a $25 million nest egg is immune to erosion from such expense ramp-ups.

Of course, if the so-called “bad choices” can add up fast. And though a $25 million nest egg seems like more than anyone could spend in a lifetime, I’d argue you’d be surprised how quickly someone that rich could go broke in a hurry. Just have a glimpse at the many celebrities and professional athletes who spent more than they made through their careers.

Notably, overdoing it on luxury goods (think the Hermès handbags, Armani suits, or the Louis Vuitton outfits) or flashy cars and homes can really take a big bite out of any retirement fund. And for many, the high sticker price is not worth the utility (or joy) the item provides. If that’s the case, going down the luxury good route may not be worth the while. Arguably, experiences may be a “good,” albeit expensive, choice for someone with more money than what they know what to do with.

In any case, I’d advise the poster not to make “bad choices” per se but to allow themselves a bit more freedom to spend on things they truly enjoy.

If that means retiring tomorrow and traveling for the rest of their life, so be it. Undoubtedly, with a net worth that high and aspirations that may be even higher, the individual should consult a financial adviser to help them manage a retirement budget and even take care of items such as insurance and estate planning.

That way, the poster will have the means to spend more on their lavish lifestyle without running the risk of running out of money way into the future.

The bottom line

At 49 years of age, there’s still another 30, maybe even 40 years of retirement to cover. So, overdoing it with one’s nest egg (a few fancy cars, lavish trips, and private jets could eat into the nest egg faster than you’d think) this early may not be the best idea. Instead of thinking about “blowing it,” perhaps it’s best to think about maximizing utility from every purchase and the possibility of leaving a part of their wealth for loved ones and charitable causes.

Either way, someone needs to get this man to a financial adviser fast before they really start to ramp up the spending!

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