The best part about retirement is being able to do what you want, when you want. For many retirees, that means spending more time travelling. Whether it’s revisiting your favorite cities or ticking off places on your “bucket” list, you want to be financially prepared for the additional expenses. Here are five tips to get you ready.
1. Plan for the Bigger Travel Years
Many retirees will have higher travel expenses in the first few years as they explore those destinations they’ve waited years to see. To help plan for those initial years, follow these four easy steps:
- Create a list of trips you would like to take during the first three years of retirement
- Put a dollar amount next to each trip (make sure to include the cost of lodging, transportation, food and fun)
- Add it all up
- Divide it by three
You now have a rough idea of your annual travel budget for the first three years of retirement.
The next step is to start thinking about how you would like to travel after the first few years. Will you be taking longer but fewer trips? Perhaps you want to spend more time visiting family? Try the above exercise again to develop a long-term travel budget for your retirement.
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2. Build a Travel Budget into Your Financial Plan
When planning for retirement, it’s important to build all your expenses into the spending plan. This includes large one-time expenses such as a new car or major home repair and variable expenses that change over time such as travel and medical costs. By thinking of these expenses explicitly, you can be more thoughtful and agile in how you plan for them.
To help you budget for and track your travel spending, consider opening a separate savings account just for travel. You can fund it all at once at the beginning of the year or on a monthly basis. Then withdraw money from the account as you pay for each trip. If you run out before the year ends or have money left over, you can adjust your plans for the next year, or adjust your travel budget.
3. Travel During Shoulder Season
“Shoulder season” is the sweet spot between high and low seasons of a vacation destination. It’s a great time to get cheaper deals on flights and accommodations. You can also enjoy shorter lines at popular restaurants and emptier beaches.
For example, in Europe, the shoulder season is April through mid-June and September through October. In Costa Rica, it’s May through mid-August. To take advantage of the different shoulder seasons, you can plan a May trip to Costa Rica and an October trip to Europe.
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4. Buy the America the Beautiful Senior Lifetime Pass
If you love U.S. national parks, purchase the Lifetime Senior Pass. The pass costs only $80 and provides free access to over 2,000 federal recreational sites. It’s available to U.S. citizens and permanent residents over the age of 62. Travelling companions can also enter the parks for free. The savings can really add up. For example, instead of paying $35 each time you drive into a National Park, you can visit them as often as you like for years to come.
5. Get Creative with Your Accommodations
In addition to traditional hotel rooms, there is a wide array of housing options available from websites like Airbnb.com and VRBO.com. You can rent a single room from the host for less than $100 in many cities. For unique experiences, you are also able to rent treehouses, tiny homes and rooms in castles. If you find a place you like and want to stay there for a month or two, you can also contact the host to negotiate a long-term rate.
There are many ways to save for and save on your trips during retirement. We encourage you to start thinking about how and where you want to travel to early on so you can build it into your spending plan for retirement.
We at Blankinship & Foster, can help you clarify your goals and create a financial framework to support them. We are here to help you with the financial “hows” and “whys” in your life. Contact us today to learn more about what we can do for you.