Traveling during retirement is one of the main goals that a lot of people have as they think about what those years will look like. To travel the way you want, it’s important to make sure you’re saving enough money for retirement to help cover those travel costs on top of your regular retirement living expenses. Here are seven common ways you can save money for travel in retirement.
A financial advisor can help you create a financial plan to save for specific retirement goals.
Saving Money for Travel During Retirement
Saving for travel has become a popular retirement goal. Retirement planning takes a multifaceted approach that involves saving enough to provide financial security for your golden years and also creating a budget to explore of new destinations and cultures, or anything else on your bucket list.
Striking a balance between those goals is key. One common budgeting strategy is the ’50/30/20′ rule. This rule suggests dividing after-tax income into three categories: 50% for necessities, 30% for discretionary items and 20% for savings. In the context of retirement, travel would typically fall under the 30% discretionary category.
Ways to Save Money for Retirement Travel
There are several ways to save for your retirement goals. Here are seven basic tips that could help turn those goals into a reality:
- Plan ahead for your retirement lifestyle: This is not just about creating a budget; it’s also about envisioning the lifestyle you want and figuring out how to achieve it. For instance, if you dream of traveling to exotic locations in retirement, your plan may include saving a specific amount each month towards this goal. Early planning can help you accumulate more savings over time, making your retirement travel dreams more achievable.
- Live on a retirement budget: Living within a budget is a practical way to save for retirement travel. It involves tracking your expenses, cutting down on non-essential spending (such as dining out frequently or subscribing to multiple streaming services) and setting travel-saving targets. By setting specific saving targets, you can ensure that a portion of your funds is always allocated towards your travel goals.
- Use credit card rewards: Credit card rewards can help you save money for retirement travel. Some credit cards, however, come with high-interest rates and could increase your risk of overspending. You should therefore look for cards that offer beneficial rewards for travel, like sign-up bonuses, point systems, zero foreign transaction fees and flexibility of rewards.
- Work part-time during retirement: Working part-time during retirement can supplement your income and provide additional funds for travel. Suitable part-time jobs for retirees might include remote work or flexible schedule roles that can help you balance work with travel goals.
- Find affordable ways to see popular places: Finding affordable alternatives to popular tourist destinations can significantly reduce travel costs. For example, choosing Lisbon over Barcelona can save quite a bit of money. However, it’s worth noting that cheaper travel options might come with less convenience or longer travel times. It’s all about finding a balance that works for you.
- Travel during off seasons: Traveling during off-peak seasons can offer significant savings. This is because prices for flights and hotels often drop during these periods due to lower demand. However, keep in mind that off-peak seasons might differ depending on the destination. And they may only be available during seasons when the weather can be most challenging.
- Travel with family or friends to cut costs: Traveling with family or friends can lead to significant savings. However, group travel can come with its own set of challenges, such as differing travel styles or budget constraints. To navigate these potential obstacles, it’s important to discuss and agree on budgets, split costs and make collective decisions to ensure everyone enjoys the experience and that savings are maximized.
Make Travel Part of Your Retirement Planning
Incorporating travel into your retirement plan involves assessing your travel goals and creating a budget. Here are three basic steps to help you start planning:
- List your desired destinations
- Estimate the costs
- Incorporate these into a long-term financial plan
Tools like retirement calculators or budgeting apps can also assist you in creating a realistic and manageable travel budget. But it’s not just about the fun stuff. You also need to think about practical factors, such as access to healthcare and medical insurance coverage.
Bottom Line
Saving for retirement travel has become a popular goal. The financial freedom that you will need to explore the world will require you to create a budget and combine different money-saving strategies to both preserve your nest egg and fulfill your wanderlust goals.
Tips for Retirement Planning
- Hiring a financial advisor can help you create a plan to build the wealth you’ll need later to travel as much as you would like. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Using a free retirement calculator can help you estimate whether you’re saving enough for the retirement lifestyle you want.
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