I'm 65 and worth more than $5.6 million. Can I afford a $200,000 camper?

By Beth Pinsker

Math may be cold and unemotional - but finances are not

Are you holding back in retirement because of saving habits you built up throughout your life?

Got a question about retirement? Fill out our questionnaire or write to me directly at beth.pinsker@marketwatch.com (please put "Fix My Portfolio" in the subject line).

Dear Fix My Portfolio,

I'm looking for my dream camper, but it costs $200,000. I know it's a crazy high price and will be the most expensive item I've ever bought outside of my house. Can I do it? I'm 65, married and not yet on Social Security. I have $49,000 in cash and a total of $5.6 million invested ($1.6 million in Roth, $1.9 million in a brokerage, $1.9 million in an IRA and $162,000 in a health savings account). My home is paid off and is currently worth $1.1 million. I manage my own money, and my investing strategy is to have a 60/40 allocation (best-in-class exchange-traded fund ultimate buy-and-hold Paul Merriman approach).

Seeking Permission

Dear Seeking Permission,

Welcome to the great spending paradox in retirement. You know intellectually that you can afford what you want, but you're still afraid to shell out big sums of money.

Think about the camper as a percentage of your net worth: It's about 3.5% of your investible assets. Spending the money on it doesn't even remove it from your balance sheet, it just transfers it from cash to a physical possession. You can afford it. You could buy two, for that matter.

But you're holding back because of the habits formed over a lifetime of saving.

Up to now, everything you've ever decided to spend money on has needed some sort of permission structure, at least in terms of being a trade-off for something else. While you were putting all that money aside for retirement, surely there were purchases that you had to delay making in order to save, or dinners out that you had to skip. You probably traded some vacations or other luxuries to pay for college. Maybe you drove a car that was one magnitude of size smaller than you could have had. Or you strung along a subpar water heater for an extra year or two because of other household emergencies. Or a kitchen renovation or bathroom addition took a back seat to some other higher purpose.

Those days are over, and you don't have to make so many trade-offs anymore. What you have instead is a (big) pile of money that you will spend down over time. If that's making you too nervous, you could, at 65, go back to work for a little longer. But at some point, you have to stare into the abyss. You have to spend your money. And you most likely know that.

What you're asking about now is permission. I had a discussion with financial adviser Andy Panko about this recently on his podcast, "Retirement Planning Education." We talked about the kinds of questions people ask and why they ask them. There's a whole category of retirement questions that are about permission, especially from people like you who have been handling their own finances. This is not a math question at all, but an emotional one, and it's all tied up in your money values.

It probably goes all the way back to your childhood and how your parents taught you to think about money. Most of us had to ask our parents to buy us things when we were young, and there were usually conditions.

Even when we started to have our own money, there were rules about how we could spend it. Just ask my kids: Until they were about 12, I held on to their wallets to make sure they were spending responsibly.

There's usually another emotional issue embedded in questions like this one that I get from readers, and that is that we all think we're doing things wrong when it comes to our finances. That goes no matter the person's level of financial education or acumen. So we ask for a second set of eyeballs on our calculations. We want external validation that the decisions we're making are correct and good for us. And that's where it turns to asking for permission.

The main reason behind this feeling of unease, however, is the fact that there's no right or wrong answer, even though you're supposedly dealing with straight-line equations. Math is meant to be cold and unemotional, but finances are not. Your spending in retirement is as much about your values and your quality of life as it is about the balances in your accounts.

So there is no right answer that you are not seeing. Understanding yourself and your motivations will get you a lot further than any book on financial planning.

That means if a camper is what you want, then a camper is what you should get. You don't need anyone's permission but your spouse's.

You can also join the Retirement conversation in our Facebook community: Retire Better with MarketWatch.

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-Beth Pinsker

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