Ask AI Advisor: What Holiday Spending Advice Should I Give Loved Ones Who Are Retiring Soon?

It’s the giving season, and here at Origin we’re focusing on ways that we can give our members the tools to pay it forward. We’ve shared some strategies from our in-house Certified Financial Planners® on how to give generously and celebrate meaningfully without derailing financial goals, and now we’re putting our industry-leading AI financial advisor to work for you and your loved ones. With all the joy this time of year brings, it can also come with stress and anxiety — especially after the inflation, layoffs, tariff talk, and resulting market swings of the past few years.

So with that in mind, we turned to AI Advisor for help on some of the trickier situations you or your loved ones might be experiencing this year. Here, we’re exploring how to support those in your life who are retiring next year.

Keep this advice in mind for conversations over the next few weeks, and check out AI Advisor’s answers to other tricky topics for spending this time of year: layoffs and job searches, budgeting and spending, expecting a baby, and worries about a potential AI bubble. We also hope that this inspires you to ask AI Advisor for guidance on other financial and economic hurdles impacting you, your family or friends. 

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Regarding spending this time of year, what advice should I give to loved ones who are retiring in the next six months?

‍Your loved ones should think of spending right now in terms of opportunity cost, not just dollars. Every holiday dollar spent now is a dollar that can't compound through retirement. Spending $2,100 this holiday season (the 2024 average) means forgoing $6,735 over a 20-year retirement at 6% returns. 

Splurging on a $3,500 holiday costs you $11,225 in future value, while a conservative $1,200 budget only sacrifices $3,849. The difference between high and conservative spending is $7,376 over your retirement.

‍In general, they should keep holiday spending below 4% of their annual budget. For typical retiree spending of $54,000 annually, a conservative $1,200 holiday budget represents just 2.2% of your annual spending—manageable and sustainable. A moderate $2,100 holiday is 3.9%, which is reasonable. But a $3,500 holiday jumps to 6.5% of your annual budget—that's disproportionately high for a single seasonal expense.

‍Budget for healthcare coverage gaps. If you're retiring before age 65, healthcare is likely your largest unexpected expense. Marketplace insurance for a couple in their early 60s runs around $800 monthly or $9,600 annually. Overspending on holidays now could force you to choose between gifts and essential coverage.

‍The bottom line: Six months before retirement isn't the time for your most extravagant holiday season. Celebrate meaningfully but modestly. Set a firm budget around $1,200-$1,500, prioritize experiences over expensive gifts, and avoid the temptation to "go big" one last time. Your future self will thank you when healthcare costs hit and you haven't spent your cushion on wrapping paper and elaborate parties.

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AI Advisor gives realistic advice about real financial concerns you may have — or topics you want to be able to advise parents, siblings, or friends on when you meet up to celebrate this holiday season.

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