Personal Finance

I'm 43 and have been able to save $3 million towards retirement - but I'm having a hard time spending money

Maurie Backman

Published: January 6, 2025 10:15 am

Key Points from 24/7 Wall St.

• A $3 million cushion gives you the leeway to spend some money.
• Set a budget to ensure you aren’t going overboard.
• Work with a financial advisor to stay on track with your goals.
• Retiring early is possible, and may be easier than you think. Click here now to see if you’re ahead, or behind. ^(Sponsor)

There’s a mental tug-of-war that happens in my brain every time I’m tempted to spend a large amount of money. The “live for today” part of my brain says “go for it,” while the cautious part of my brain says “you might need that money for your retirement.” So I can totally relate to this Reddit post, where the writer in question is 43 years old, earns about $200,000 a year, and is hesitant to spend money on a newer car because prices are inflated.

See, I have a decent chunk of money in retirement savings, and I generally do a good job of living below my means. So you’d think that it wouldn’t be so difficult for me to splurge occasionally. Yet to this day, it’s often a struggle. And I can see why it’s a struggle for the poster here, even though they’ve got about $3 million saved for retirement already. But I’ve also learned to strike a balance between saving for the future and spending on today.

A $3 million cushion buys you some leeway

I’m being sincere when I say that I feel for the poster above. They’ve clearly worked hard and saved well to get to where they are, but they’re also worried about spending a large chunk of their income.

They also say point blank that if they earned more, they’ve had an easier time spending. A $200,000 salary certainly isn’t shabby, but when you factor in the cost of raising kids (which the poster has), it gets whittled down quickly.

And also, let’s be real. In some parts of the country, a $200,000 income doesn’t go very far — not when a starter home costs $700,000 or more.

But here’s what the poster should realize. The average 43-year-old has about $142,000 saved for retirement, per the Federal Reserve. A $3 million portfolio is way ahead of the game. And that knowledge alone should make it easier to spend on important things, like a car.

In fact, when my last car reached the point where it was practically old enough to vote, you know what I did? I replaced it with a newer one. I went from years without a car payment to having to pay a lot of money each month for a comfortable vehicle that can accommodate my family. But I didn’t feel guilty about spending the money because a) a car is an essential expense, and b) I know I’m saving pretty well for retirement and don’t have to sock away every spare dollar I earn.

How to get more comfortable spending your money

There are two primary things I do to make it easier to spend my money. And if you’re like the Redditor above, they may work wonders for your mindset, too.

First, I follow a budget. I don’t list every single household expense of mine down to the dollar, but I put together a rough estimate of my essential costs coupled with my yearly savings goals. The way I see it, if I can cover my non-negotiable bills and fund my retirement plan nicely, I shouldn’t have an issue spending the rest.

The second thing I do is work with a financial advisor on long-term goals. And I’d strongly encourage you to do the same, no matter how much you earn or have saved.

The poster above could probably benefit from working with an advisor because they’d see clearly that they can afford an updated car. The logical part of their brain probably knows that, too, but the emotional part may be stopping them from making that purchase. An advisor’s perspective could get them more comfortable with that sort of purchase once they see that the numbers really do work.

Interestingly, this isn’t the only Reddit post I’ve come across where someone with a lot of money struggles to spend. I think that depending on how you grew up and how you came to be in that situation, it can be a tough thing to part with your cash. But it’s also important to strike a balance so you don’t reach your retirement years with a massive pile of money and an equally massive pile of regret.