When you envision your retirement, do you imagine staying put the whole time? Of course you don’t. Retirement travel is a priority for most people, whether that’s visiting family in another state or globetrotting. You’ve earned this time, so you want to make sure you can make the most of it. Let’s go over how you can be financially prepared for retirement travel.
A financial advisor can help you create a financial plan for your retirement goals.
Plan for Travel When Saving for Retirement
The best place to start planning for retirement travel is by factoring it into your retirement plan. Many people plan to rely on a fixed income in retirement. Retirement travel can be financially difficult if extra isn’t factored in. Especially if you have big goals, the sooner you start saving, the better.
Usually, starting to save 5 – 10 years away from retirement is a good time to plan. At this point, you’ll have an idea of your health, as well as what your appetite is for travel. You can even start a separate fund just for travel instead of lumping it all in with your retirement plan.
Downsize and Reduce Your Daily Spending
Careless spending adds up. Over time, the money you could have saved for travel gets eaten up by eating out and impulsive purchases. Determining your needs vs. wants is a great place to start. There are plenty of ways to live frugally and make the most of your dollar.
Another place you can look for some savings is through discount programs. Grocery stores, restaurants and more offer discounts to those age 60 and up. Consider joining the AARP and taking advantage of the member benefits.
One way to grow your travel savings is to downsize your home. This is especially true if you own your home outright. By selling your current home and buying a smaller, cheaper property, you can deposit the difference in your savings. On top of the earnings from the sale, smaller homes are typically cheaper. You may have less property taxes and lower utility bills.
Budget for Your Trips
Having a personal budget helps, but having a plan for how much you’re going to spend on retirement travel is essential. You need to be prepared for how much things cost, and these days, how much they cost can change. If you want to fly to Greece, for instance, tickets could cost you more or less depending on the season and when you book tickets.
If you want to make the most of your travel, you may want to plan for things outside of transportation, food and lodging. Many travelers take excursions to visit ancient ruins, go fishing or go scuba diving, for example. Do your research and factor in every piece of the trips you want.
Consider Extended Stays
Since you’re retired, you’re more likely to be without responsibilities back home. If that’s the case, consider extending your retirement travel. According to a 2018 report from Airbnb, seniors are their largest growing demographic. On top of that, they’re more likely to stay longer than other travelers.
On a per-night basis, extended stays can be less expensive than shorter stays. This type of travel can help you save in other ways, too. For instance, if you stay at a house, you can take advantage of the kitchen, saving you the cost of restaurant food. These sorts of stays allow you to settle in more and take in your surroundings, which can help you enjoy the trip more and avoid tourist traps.
And while it’s not traveling, when you’re at home, hosting travelers through an app like Vrbo or Airbnb is a great way to make extra money for travel. You’ll also get to meet other travelers and learn about their experiences, which can be great information when planning your next trip.
Insure Your Retirement Travel
Unexpected things happen all the time. When you buy your plane tickets or book your hotel, consider insuring the purchases. For a small fee, you can have peace of mind knowing that, if you need to cancel, your costs can be refunded.
If you’re traveling internationally, and you have medicare, it’s smart to get travel health insurance. Medicare only covers healthcare costs in the U.S., so if you’re leaving the country, you need to be covered medically.
You’ll also want to have some room in your budget for emergencies. For example, if you get hurt while traveling, your travel health insurance will cover the medical expenses, but may not cover extra costs. If you want to head home early, you may have to do it on your dime.
Work While You Travel
Just because you’re retired doesn’t mean you have to quit making money. In fact, there are plenty of great side hustles for retirees, many of which you can do while traveling. If you have an internet connection and a laptop, work like business consulting or bookkeeping can easily be done to earn more for traveling.
If you’re staying somewhere long-term, you can look into finding work locally. For instance, many countries where English isn’t the primary language have a large need for English tutors. Or if you’re staying in a touristy area, you may be able to get a part-time job working at an amusement park.
Some retirees may see retirement as an opportunity for non-stop world travel. Others may just want to take a few short trips a year but stay mostly at home.
Wherever you fall on the spectrum, it’s important to plan for retirement travel if you want it to happen.
Finding savings where you can and putting them into an investment account is a great place to start.
Tips for Retirement Planning
- Consider connecting with a financial advisor about whether you should work in retirement. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Getting everything out of your retirement is important. After all, you’ve earned this. To take full advantage of benefits like social security, SmartAsset’s social security calculator and our retirement guide can help you out.
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