THE BEST $100 YOU CAN SPEND EVERY MONTH IN RETIREMENT

When it comes to retirement, even if you’re living on a fixed budget, you might still want to leave some wiggle room for “nonessentials.” This means looking beyond things like housing, utilities, groceries or healthcare costs and being willing to splurge a little on other things that lend vibrancy to your quality of life.

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Say you have $100 to spare every month. Here are some of the best ways to use it, according to experts.

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Physical Exercise

“I would say spend it on anything related to your health,” said Chris Urban, CFP, RICP,  founder at Discovery Wealth Planning. “This could be a membership to a gym or perhaps getting outside to play golf or tennis. Or perhaps there are opportunities to do swimming and/or pickleball.”

Although these are mainly related to physical health and fitness, they can also provide some mental and emotional health benefits.

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Non-Physical Activities

If you’re not as mobile as you used to be, or if you’re not as keen on physical exercise, consider using that $100 on other aspects that get you out there or otherwise improve your overall retirement life.

“If you prefer less physical exercise, perhaps joining some kind of book club or social group that hosts regular activities and gatherings would be helpful for keeping your mind sharp and [are] well worth spending money on, in my opinion,” said Urban.

Just make sure the group or activity you’re interested in joining costs less than $100 a month — and it really should. This will give you quite a few options to try out and enjoy in your retirement life.

Half on Wellness, Half on Frivolities

Christopher Tasik, a certified financial planner at Tasik Financial, suggested splitting that $100 in half.

“From my perspective, I think the best way to spend $100 is half on wellness and half on frivolous joy,” he said. “According to CDC data released in November 2023, U.S. life expectancy is 77.5 years, so it makes sense to stay as healthy as you can to enjoy every moment of your life. People also need to stay happy, and spending $50 a month on a frivolous pleasure with zero guilt is the permission slip they need!”

If you’re not sure what frivolous joy looks like for you, that’s okay. Now’s a great time to figure it out.

Make Qualified Charitable Distributions

If you realize you don’t need that $100, consider donating it.

Khwan Hathai, CFP, CFT, founder and financial therapist at Epiphany Financial Therapy, said, “If financially viable, donating a portion of the $100 to charity can be deeply satisfying.”

This is especially true if you’re supporting a cause you truly care about and believe in.

Plus, charitable giving could give you some tax benefits: Even in retirement, it’s important to consider the tax implications of any wealth you’ve built over the years. That’s why one option is to use that money on charitable distributions.

“A tax-efficient way [to spend $100 a month] is in the form of a qualified charitable distribution, if you have charitable intent,” said Kevin Thompson of 9I Capital Group LLC. “This allows for you to take money out of your retirement account tax-free and possibly satisfy some of the RMD (required minimum distribution) requirements for those over 70.5.”

Split That $100 Up

It might seem like $100 a month isn’t a lot, but it can add up over time. You can also split it into smaller amounts and use it on multiple things, especially if those things don’t cost much individually.

“We advise diversifying $100 monthly in retirement,” said Adam Garcia, the owner of The Stock Dork. “Allocate for savings, health, leisure and personal growth.”

Health, of course, could be something like an inexpensive gym membership. The average cost of a gym membership is between $40 and $70 a month, according to GoodRx. But there are ways to lower costs, and some gyms have a much lower price tag.

Putting some of your $100 bill toward savings could be useful if you don’t feel comfortable yet with how much you have set aside. Otherwise, you could invest some of that money in personal development or learning — such as through online courses.

Use It for Smart Investments

If you don’t need the money for anything else, consider using it for some smart investments.

“I believe in a balanced approach that equally prioritizes immediate enjoyment and the long-term preservation of wealth,” said Hathai.

This includes investing in personal well-being through experiences — whether that’s a new hobby, a gym membership or a class. And if you’re more intent on the financial side of things, Hathai had a suggestion there.

“On the financial front, part of this monthly sum could be directed towards smart investments. This could mean putting the money into high-yield savings accounts or certificates of deposit for those who prefer low-risk avenues,” she said.

“Alternatively, for a bit more risk, investing in dividend-paying stocks or exchange-traded funds could generate passive income,” she continued. “This approach requires careful selection to navigate market trends effectively.”

And if you don’t want to invest in something entirely new, you could still use that money to rebalance your existing investment portfolio. This can ensure it remains aligned with your personal risk tolerance and financial goals.

Contribute to a Health Savings Account (HSA)

“For eligible retirees, contributing to a Health Savings Account offers a triple tax advantage, making it an excellent option for managing future healthcare expenses,” said Hathai. “The account’s contributions are tax-deductible, its growth is tax-free, and withdrawals for qualified medical expenses are untaxed.”

Generally, you can’t contribute to an HSA after the age of 65 or once you’ve enrolled in Medicare, so keep that in mind.

Put It Toward Working With a Financial Advisor

If you have a complicated financial situation and are feeling stressed about your finances, you might want to consider working with a professional financial advisor.

“One way to reduce money stress in retirement is to work with a professional financial advisor to manage your money,” said Laura Adams, a financial expert with Finder. “A fee of approximately $100 a month or $1,200 a year may be well worth it to ensure you minimize taxes, plan for your heirs and safely grow your nest egg as much as possible.”

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This article originally appeared on GOBankingRates.com: The Best $100 You Can Spend Every Month in Retirement

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