Retired and ready to travel? Finally, we don’t have to schedule our travels around company deadlines or school schedules! But did you budget for travel in retirement?
One of the more enjoyable aspects of retirement planning is envisioning the future lifestyle you want to enjoy. For many retirees, travel is a big part of that picture. According to the 19th Annual Transamerica Retirement Survey, 67% of American workers dream of traveling once they retire.
One potential obstacle stands in the way of those dreams: the cost.
Making the numbers work to accommodate travel plans involves budgeting and financial goal-setting before and after retirement begins. The more you save for retirement, the more leeway it gives you in planning travel spending.
I was recently coaching a single woman who wanted to retire in five years. She definitely wanted to do more traveling in retirement, but hadn’t thought about a separate budget category for travel. Now she’s budgeting for one of her top retirement activities, traveling.
Let’s talk about your finances and how you can plan for traveling in retirement. When you are working on your total retirement budget, you must have a category for travel. Why? Because, according to the Motley Fool, “retirees have found themselves spending more than they expected during retirement, and most of those costs fall into two categories: healthcare and travel.” The average retired traveler spends $11,077/year. That means it’s a significant annual expense to anticipate and plan for.
The first step is to have your retirement budget in place, and know your normal retirement income and expenses.
Step two is to establish a savings account specifically for travel which you are diligent to only withdraw from for your travel expenses. This is your total retirement travel budget which you can then divide into annual trips you intend to take. When planning your individual trips, do your research and know what the trips will cost so there are no, or limited, surprises.
Don’t let fear of traveling solo, experiencing new adventures, or your finances, stop you from enjoying travels.
What’s the cheapest way to travel when you’re retired? Aside from traveling in a dilapidated RV, (Nomad land, anyone?) retirees have the advantage of flexibility. You can go on a Tuesday, if you want to and save hundreds of dollars on hotels and airfare. Also, you’re not tied to a school year schedule or company deadlines, so you can travel any time of year.
Heather Hunter, a spokesperson for AAA says, “The more flexibility you have, the better chance you have to save money on vacations.” She also adds that last-minute discounts no longer really apply. These days, planning pays off. When you find a great rate, jump on it.
Of course take advantage of senior discounts and coupons. For instance, AARP offers “45 Travel Discounts for Your Next Great Escape.” There are deals on hotels, resorts, car rentals, railways, airlines and cruise opportunities.
“Senior Women Travel,” written by a former foreign diplomat and correspondent, has very practical tips on everything from planning your travels to safety to budgeting. I like her budgeting tips on:
- Airfare – probably our biggest cost.
- Accommodation – where you can make or break your budget. AirBnB, VRBO, etc usually help reduce this cost and the next one.
- Food – a kitchen can help reduce this expense by 50%. Splurge on lunch and save on dinner, by eating in.
- Sightseeing – you can cut expenses by buying tickets in advance through Get Your Guide or Viator, not to mention saving time by skipping the line.
- Transportation – this can be lower cost once you reach your destination by using local buses or trains.
By dividing your total budget by the number of days you’ll be traveling, you’ll have a general idea of how much you can spend per day. Now that you have your categories of where your money will be spent, you can adjust your food, accommodation, or sightseeing, so you don’t exceed your budget. Using an app like Trail Wallet and Google’s Trabee Pocket should help you track your travel budget,too. That way there are no surprises when the credit card bills arrive a month later!
Once you’ve figured out how much money to take with you, you’ll have to decide how to take it with you. There are plenty of ways you can carry your money. I tend to aim for prepaid or credit cards (with no foreign fees), but I also carry cash. Remember to hide any money, cash or otherwise, in a travel money belt, an infinity scarf with a secret pocket or an anti-theft travel handbag.
I love this advice from 15 world travelers on “what’s your number one money saving tip for travelers?” Flying:
- Book separate plane tickets, piece together your travel.
- Sign up for a credit card with significant travel points.
- Don’t check any bags. (This is NOT for me!)
Check out the article for money saving tips on several other categories.
And we can’t forget about our travel attire! Here’s great info on comfy clothes for flying. We can buy a couple outfits and they’ll last for many trips to come! BTW, if you haven’t already, check out Conde Nast’s Women Who Travel.
Enjoy budgeting for your retirement travels. And remember, if you need help planning your retirement budget, schedule your free 20 minute money chat to make sure you’re budgeting for all of your retirement activities!