When it comes to money, there’s always someone who has less than you—and there’s always someone who has more than you (unless you’re someone like Elon Musk).
While this may be true, it doesn’t make it any easier to navigate financial gaps among friends, especially in retirement. It may feel unfair to see your peers living it up in retirement, traveling, dining out and golfing every week, while you’re budgeting to make ends meet. On the flip side, you may feel guilty or awkward to be living comfortably in retirement while your friend struggles financially.
The reality is, many Americans worry that their retirement savings aren’t enough. The median retirement savings balance for Americans aged 65–74 is $200,000, according to Nerdwallet. And while that’s no insignificant sum of money, it may not go as far as you hope when you consider these factors:
- More than 10 million Americans aged 65 and older are still paying off a mortgage.
- Retirees spend on average $7,030 a year on health care costs.
- People aged 65 and older spend $6,490 on food each year.
- A year of nursing home care costs about $95,000 to nearly $110,000 for a private or semi-private room.
- The expected retirement length is 6 years for men and 21.3 years for women.
Check out these 4 tips for handling cost of living (COLA) increases in retirement.
So how can you handle a friendship wealth gap in retirement without your bond suffering? Keep reading for tips on navigating this dicey territory.
If You Feel Like You Can’t Keep Up With Your Friends Financially…
- Find Happiness in What You Have
Jealousy is a natural emotion when someone has more than you. However, rather than letting it turn you bitter, instead focus on accepting and finding happiness in what you have. Avoid comparing your things and lifestyle to that of your friends because there is no contentment in comparisons. - Know and Respect Your Financial Boundaries
Many retirees are underestimating how long they’ll live, are living beyond their means, and aren’t prepared for long-term care. That’s not to say this is the case for your friends, but plenty of retirees may appear wealthier than they actually are.When you have clarity about your budget and spending limits, you will feel empowered knowing that you’re doing what you can to make smart money choices. Working with a financial professional can help you be confident in your ability to meet financial obligations and have a personally satisfying retirement.
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- Talk to Your Friend
If you have a friend who invites you to do things you can’t afford, don’t be afraid to talk to them about it. If you feel uncomfortable discussing money, one strategy is to simply suggest a different plan that costs less.A more direct way to address the issue is to tell your friend that you feel uncomfortable spending that much money, but perhaps there’s a way to make things comfortable for both of you.You can also take the initiative and invite your friend to do things that you’re financially comfortable with, such as grabbing coffee or attending a free event at the library.
Are you practicing these 7 saving strategies for a secure retirement?
If You Feel Like You Have More Than Your Friends Financially…
- Be Aware of Signs Your Friend Is on a Budget
Never assume that everyone around you is in the same financial boat as you. If you have a friend who often declines invitations to expensive outings, requests to only pay for their portion of the bill, or has taken a job in retirement, it could be because they’re on a budget.
Do you know your net worth? Learn how to calculate it here.
- Be Sensitive to Financial Gaps
When you’re aware that you have more money than your friends, it’s important to suggest options that are affordable for everyone, such as inexpensive restaurants, low or no cost activities, or potlucks. And when a friend suggests a less expensive option, honor their boundaries. You can still share experiences that don’t hinge on spending much money.In addition, avoid making tone-deaf remarks about money, such as rambling on about large purchases and vacations. - Consider Treating Occasionally, But With Boundaries
If there’s a new restaurant or experience you’d like to try, but you know it isn’t in your friend’s budget, you may offer to cover their costs. Be up front and let them know it’s your treat in advance or at the beginning of the outing, settling money matters quickly and quietly. Keep in mind that this isn’t something you should do all the time as treating too much could lead to sour feelings on both sides.
Want more? Check out our blog, Financial Wellness: For Women, It Isn’t Just About Money.
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