When people start planning their retirement, they often desire to travel, whether it’s to experience new cultures, see new places or broaden their worldview. Many people wait to travel until retirement age to ensure they have enough time to see and experience everything they never got to do when they were younger. Approximately 70% of people desire to travel in retirement.
If you’re one of the many people who dream of traveling in retirement, we’ll guide you through the planning process and how much you should budget for travel in retirement so that you can travel to your heart’s content.
How Often Do Retired People Travel?
People are leading longer and more active lives, so it makes sense that travel for retirees is becoming a common goal. Many people of retirement age are already traveling. Around 53% of retired adults have already splurged on travel, spending thousands of dollars to vacation to various locations, including destinations close to home and further abroad.
While many people are traveling in retirement, some people don’t consider the costs ahead of time, requiring changes to their retirement budget to save for travel expenses. Traveling within the country isn’t as costly as traveling abroad, so it’s easier to execute without as much planning. However, as more people have children studying or working in other countries or family members across international borders, traveling abroad is becoming a popular choice among retirees.
Retirement income can make it challenging to afford travel costs, but careful planning and budgeting can make travel for retirees more than a possibility.
How to Plan for Travel in Retirement
Travel is a big part of many people’s retirement plans, but the cost is one of the most significant factors that get in the way. There are many aspects to consider, such as transportation, accommodations, food, activities and other expenses. Many people in retirement make an income of less than $50,000 from all sources, but despite the potential for a stunted income, people are still finding ways to travel.
One of the best ways to plan for travel is to create a plan to account for the costs. Use the income at your disposal and adjust the numbers to fit your travel plans. It’s essential to start planning before retiring and maintain your plan once officially retired. Some of the ways you can prepare for travel in retirement include:
Consider Everyday Costs
When you’re planning to travel in retirement, there will be plenty of costs to consider. To adequately prepare for these costs, you’ll want to manage your daily expenses so you can set aside savings for your travel plan. Consider if your current cash flow is enough to afford travel. If the answer is yes, you don’t have anything to worry about. If the answer is no, then you’ll have to make adjustments to your current budget.
Take into account how much you spend on everyday necessities, such as food, rent or mortgage payments, medical care and other bills. Determine what parts of your spending are essential and what can be cut out. Any money you can save by making lifestyle changes can go into a savings account dedicated to travel in retirement.
Ask the Important Questions
When you’re planning to travel, you should ask a few key questions to determine what changes you need to make:
- How much will travel cost annually?
- Is it possible to find travel accommodations at a low price?
- How long will trips need to be delayed to save enough money?
- Where should I travel in retirement, and will it be abroad?
You may want to travel multiple times a year, or you may plan one big annual trip. Your answers to these questions will vary based on your desires, and they can help guide you when you’re starting to plan your future vacations.
Create a Goal and Timeline
Once you’ve determined where you want to go and how much you’ll need to spend, you’ll want to establish goals and a timeline that fit your needs. Create a goal for when you want to travel so you know how much time you’ll have to save. It’s also essential to create a goal for your daily expenses so you don’t have to dip into your travel funds to pay for necessities. Having established goals and following a timeline will help you be prepared for travel once you retire, so you can start enjoying your freedom as soon as possible.
How to Plan a Travel Budget in Retirement
You know you want to travel in retirement and that saving money is an essential step. Now, it’s time to get specific with the expenses to understand what you need to save.
First, you’ll want to determine your travel costs. Take a look at how much you’ve spent on travel in the past. Did you spend more on accommodations and transportation? How many activities did you participate in that costed money on each trip? Consider if you want to travel more once you retire or if it will be about the same. Calculate how much money you’ve previously spent and create an average annual spending budget.
Once you’ve established a specific travel budget, you’ll know exactly how much you need to save each year to meet your needs. Include your travel costs into your retirement expenses and consult with a financial advisor to determine if you’ll need to start saving more and how long your savings will last.
You can also use certain methods to save while you’re traveling. You can reduce travel costs by:
- Using credit cards: Some credit card companies offer travel rewards when using the card for daily expenses. You could use the miles or rewards to fund your trips.
- Taking advantage of discounts: Many places offer senior discounts, such as hotels, restaurants and tourist attractions. If you plan on traveling a lot, these discounts can add up to a significant amount of savings that you can use to fund your next trip. Additionally, some places provide reduced rates for booking on less popular dates, such as during the week or in the off-season.
- Carefully choosing your accommodations: Once you’re retired, you’ll be able to stay at your destinations longer than ever before. AirBnBs are often cheaper than hotel accommodations for extended stays and often come with the added benefit of a kitchen. You’ll be able to save by cooking your meals rather than spending money at restaurants every day.
- Considering home exchanges: Many companies and programs provide services that allow homeowners to trade homes with other people who live in a destination you’d like to visit. Your stay will be completely free, saving you thousands of dollars in accommodations expenses. You’ll also have the opportunity to meet new people from various locations and cultures.
Plan For Retirement With Nova Wealth Management
If your goal is to travel in retirement, the wealth management team at Nova Wealth Management is here to help. We help individuals and families create long-term financial plans to fund their retirement goals. We focus on financial planning and investing to drive the best results and provide cash flow for our clients to fund their retirement travels.
We have offices located in Illinois and Florida, but we offer services worldwide. We can help you prepare for retirement with our income planning services no matter where you’re located. Schedule a meeting today to get started.
