Once people reach retirement age, their spending habits often change. Housing, food, and clothing still take a significant part of the budget, of course. But since retirement means more free time, it also means the opportunity to pursue activities and acquisitions that may not have been possible during the working years.

If you're retired or about to be, think about whether you want to budget for any of the following. If you're not there yet, read, dream—and start saving.

Key Takeaways

  • If you saved up enough for your retirement, you may want to start planning what to do with the extra income that your assets might generate.
  • If you want to focus on a retirement that is leisurely or adventurous, budget funds for travel, including perhaps splurging on an RV.
  • Many retirees also take the opportunity to pick up new hobbies, or even purchase a second home.


The freedom to get in the car or take a bus or airplane to a faraway destination is one of the first things many retirees want to experience.

Still, others begin going on cruises or continue a life-long “cruise” habit with more intensity and seasonal flexibility this time around.

With the average cost of summer vacation coming in at $1,180 per person ($2,360 per couple), it’s important to set aside funds for travel in the yearly budget. Off-season trips—one benefit of being retired—can cost less, while big-deal exotic vacations can cost way more.

Recreational Vehicle

For some, retirement means buying a full-sized or mini motor home and taking to the open road.

How much you'll pay for a motorized RV depends on the type and age of the vehicle. According to the website costhelper, prices for a brand-new Class A motor home start at $50,000 to $100,000; a customized model could cost between $500,000 and $800,000. Camper Vans, also known as Class B, cost between $40,000 and $80,000 new and Class C, mini motor homes range from $50,000 to $80,000.

Buy any of these second-hand, and the cost drops 20% to 30% below the original price after just a few years, according to costhelper.

Second Home

For those who have already traveled to the four corners of the globe—or have no desire to do so—retirement often becomes a time to move to their favorite destination on a semi-permanent basis.

Owning a second home can cost about as much as owning a first home, unless it is in a less expensive community. Other variables include the type of dwelling, its location, and whether it is occupied all year long or just part of the year.

According to the National Association of Realtors, the median price paid for a vacation home in 2013 was $168,700.

A less costly option than a traditional house or condominium is a mobile or manufactured home in a mobile home park. These can have two or more bedrooms. According to Foremost Insurance, a single-wide (1,000 square feet) mobile home costs about $24,000. A double-wide (1,600 square feet) averages $43,000. These are factory-made and transported to the housing site. Be aware that when you buy a manufactured home that is already on a site, the homeowner may not own the property on which the house sits.

An even less expensive option—and much smaller—is a "park model" trailer. These are one-bedroom RVs with about 400 square feet of living space, designed for long-term or permanent placement at a campground or mobile-home park. A new park model runs from about $21,000 to about $50,000, depending on furnishings and options.

Unless you own the land where it will be sited, remember to factor in rental costs and fees for the campground or mobile-home park when budgeting for a manufactured house or trailer home.


For many retirees, retirement means the chance to participate in previously part-time hobbies. Among popular hobbies for people over age 65 are boating, golf, fishing, antiquing, photography, model-building, gardening, volunteering, genealogy, and knitting.

MarketWatch pegged the amount retirees said they spent on hobbies at about $2,200 per year. While that’s less than $200 per month, most hobbies do not require a huge ongoing outlay once the basic materials are on hand. Unless you develop a yen for rare species of trees or Georgian silver, you're probably safe. Maybe you can even earn a profit on your hobby.

The Bottom Line

The most important thing seniors need to do, especially when contemplating a large retirement purchase or investment, is to make sure it fits in their budget. For those who are not yet retired, planning for those big expenditures is can make sure they happen when the time comes.