You may think of retirement as a time to live it up. You’ve worked hard your whole life, and now you may want to splurge on luxurious travel or your dream car. But Grant Cardone, a private equity fund manager and real estate investor, said you should think twice before buying that expensive sports car.
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Here’s why Cardone — who recently launched the 10X Wealth Plan, a personalized financial coaching program — doesn’t recommend buying a super high-end car in retirement.
Why Tax-Deductible Cars Make More Sense in Retirement
When you’re retired and living on a fixed income, you should think not only about how much you’re spending, but also about what the tax repercussions are. Because a sports car is never a tax-deductible expense, Cardone doesn’t recommend buying one in retirement.
“Do you know how many retired people go out and buy a Ferrari that’s not tax-deductible?” he told GOBankingRates. “They could have simply bought a Suburban Navigator and written off the entire thing. They could have bought four Navigators and written all of them off.”
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How Retirees Can Use Section 179 To Deduct Car Costs
Cardone recommended taking advantage of the Section 179 deduction, which allows businesses to deduct the full purchase price of qualifying vehicles in the year they’re placed in service. Of course, this means you must use the vehicle for business purposes — but Cardone sees this as a great opportunity to make money in retirement while enjoying a new car.
“You could buy four or five Navigators and literally start a business,” he said. “You could write off [the cost of the vehicles] on day one, by the tax code, and you could have started an Uber Black business that actually produces income going forward.”
Want a Ferrari? Lease or Rent Instead, Cardone Said
If you are still set on having a Ferrari in retirement, Cardone said to lease one, or better yet, rent one on the weekends.
“I’ve never bought a supercar in my entire life for that very reason,” he said. “I can’t write it off.”
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This article originally appeared on GOBankingRates.com: Grant Cardone: This Is the One Type of Car Retirees Should Never Buy
