Retirement is a time when many people have the opportunity to pursue their interests and hobbies, and travel is often high on the list of things people want to do. However, the cost of travel can make it infeasible for many people…unless they budget for it.
In this article, we’ll explore how to budget for travel in retirement. But first, let’s highlight some of the benefits of making time to see the world.
The Benefits of Travel in Retirement
First and foremost, travel can be a way to stay physically active and healthy in retirement. Many travel activities, such as hiking, swimming, or walking, require physical exertion and can help keep retirees in good shape. Plus, because traveling can provide a change of scenery from daily routines, it often leads to increased activity and exercise levels.
Traveling in retirement also offers the opportunity to maintain and build social connections. Retirees who travel may meet new people and form new friendships, whether with fellow travelers or locals in the places they visit. This can be especially important for older adults who may be at risk for social isolation or loneliness.
Thirdly, traveling in retirement is a way to engage in lifelong learning and personal growth. Visiting new places and experiencing new cultures can broaden horizons, expand knowledge, and provide opportunities for personal reflection and growth. Retirees can also pursue specific interests, such as art, history, or cuisine, through travel experiences.
Traveling in retirement can also have significant mental health benefits. Retirement can be a time of transition and adjustment, and traveling can provide a sense of purpose and excitement. It can also be a way to combat stress and anxiety, as the change of scenery and pace can help break up routine and provide a sense of adventure. Plus, traveling offers retirees a chance to disconnect from daily stressors and recharge their mental batteries.
Finally, travel can be a way to create lasting memories and strengthen personal bonds. Traveling with loved ones, such as a spouse, family members, or close friends, can create shared experiences and strengthen relationships. Retirees may also use travel as a way to reconnect with distant family members or to create new memories with grandchildren.
While travel in retirement can offer many benefits, it is important to consider certain factors when planning a trip. Health, mobility, and safety concerns should be taken into account when choosing a destination and planning activities. Retirees should also consider factors such as budget, travel insurance, and the availability of medical services in the places they plan to visit.
How to Budget for Travel in Retirement
Retirement can be an exciting time to explore new places and have new experiences. However, it’s also expensive, and it’s important to make sure you have room in your budget for these experiences.
In order to do that, you have to get clear on what your overall retirement budget is. Here are some recommended steps to take:
1. Estimate Your Retirement Income
The first step in creating a retirement budget is to estimate your retirement income. This includes all sources of income that you expect to receive during retirement, such as Social Security benefits, pension payments, and withdrawals from retirement accounts like IRAs and 401(k)s.
To estimate your Social Security benefits, you can use the Social Security Administration’s online calculator. This calculator will provide an estimate of your monthly benefits based on your earnings history.
For pensions and retirement accounts, you can contact your employer or financial institution to get an estimate of your expected payments or withdrawals.
2. Estimate Your Retirement Expenses
Once you have estimated your retirement income, the next step is to estimate your retirement expenses. This includes all of the expenses that you expect to have during retirement, such as housing, healthcare, food, transportation, and entertainment.
To estimate your expenses, you can start by looking at your current expenses and considering how they might change during retirement. For example, you may no longer have a mortgage payment if you pay off your home before retirement. On the other hand, your healthcare expenses may increase as you age.
It’s important to create a detailed list of your retirement expenses and to be as accurate as possible in your estimates. This will help you create a realistic retirement budget that takes into account all of your expenses.
3. Determine Your Retirement Savings Gap
Once you have estimated your retirement income and expenses, you can determine your retirement savings gap. This is the amount of money that you will need to save in order to cover your expenses during retirement.
To determine your retirement savings gap, subtract your estimated retirement expenses from your estimated retirement income. If your retirement income is higher than your retirement expenses, then you may not have a savings gap. If your retirement expenses are higher than your retirement income, then you will need to save more money to cover the gap.
4. Create a Plan to Close the Savings Gap
If you have a retirement savings gap, the next step is to create a plan to close the gap. There are several ways to do this, including:
Increasing your retirement savings: You can increase your retirement savings by contributing more to your retirement accounts, such as IRAs and 401(k)s.
Delaying your retirement: Delaying your retirement can give you more time to save money and increase your retirement income.
Working part-time during retirement: Working part-time during retirement can provide additional income and help you close your retirement savings gap.
Reducing your retirement expenses: You can reduce your retirement expenses by downsizing your home, living in a more affordable location, or cutting back on discretionary expenses like travel and entertainment.
5. Review and Adjust Your Retirement Budget
Once you have created a retirement budget, it’s important to review and adjust it regularly. This will help you ensure that you are on track to meet your retirement savings goals and that your budget is still realistic based on your current situation.
You should review your retirement budget at least once a year and make adjustments as needed. For example, if your expenses have increased or your income has decreased, you may need to adjust your budget accordingly.
6. Create a Travel Budget
Once you have a retirement budget in place, you can start looking for ways to save money and make room for travel. More specifically, you should include a travel budget within your larger budget.
This should take into account all of the expenses associated with travel, including transportation, accommodations, food, activities, and any other expenses. It’s important to create a realistic budget that takes into account all of your travel expenses.
One way to create a travel budget is to start by setting a travel goal. This could be a specific destination, a certain number of trips per year, or a specific travel experience. Once you have a travel goal in mind, you can start researching the costs associated with that goal.
Ways to Save Money on Travel in Retirement
Traveling is an exciting and rewarding experience, but it isn’t always the most cost-efficient. Thankfully, many options exist to help you save money on travel without sacrificing the quality of your trip. Whether you’re planning a budget-friendly vacation or trying to make your travel budget stretch further, here are some tips for saving money on travel.
1. Travel during off-peak times
One key way to make your travels more cost-efficient is to avoid traveling during peak times. This includes holidays, weekends, and other busy travel times. Flights and hotels tend to be more expensive during these times, so traveling during off-peak times can save you a lot of money. Consider traveling during weekdays or shoulder seasons when prices are lower.
2. Use travel rewards
If you have a credit card with travel rewards, consider using those rewards to pay for travel expenses. Many credit cards offer rewards for flights, hotel stays, and car rentals. You can also join travel loyalty programs to earn points and discounts on future trips. Make sure to use your rewards wisely to maximize your savings.
3. Compare prices
When booking travel, it’s important to compare prices across different websites and providers. Use travel comparison websites like Kayak, Skyscanner, or Expedia so you can know you’re getting the best deal for flights, accommodations, and activities. You can also use websites like TripAdvisor to read reviews and get recommendations from other travelers.
4. Book early
Booking your travel early can help you save money. Airlines and hotels often offer early bird discounts to customers who book in advance. This can also help you secure the best deals on popular destinations and activities.
You might also consider working with a travel agent to determine the best times and places to book. Often, you can work with a travel agent for free because most of their revenue comes from commissions earned working with partners. Just double check whether or not they charge additional fees before choosing to go that route.
5. Use budget-friendly airlines
Budget airlines offer cheaper flights in comparison to traditional airlines. Even though budget airlines might not have the extent of service or benefits like the traditional airlines have, they can offer a cost-efficient way to travel. Keep in mind that it is common for budget airlines to add on fees for things like seat assignments and checked baggage. Needless to say, always read through their policies– especially the fine print– before you book your trip.
6. Pack Light
Your amazing flight “deal” can quickly become more costly when you add on things like checked baggage. One way to circumvent this is by packing light.
When possible, only take carry-on luggage. Most airlines allow you to bring one carry-on item and one personal item for free. And if you do have to check luggage, try to save space. If you’re traveling with a partner, try packing together in one big piece of luggage rather than two bags that each require their own fee.
7. Stay in budget accommodations
Staying in budget accommodations like hostels, Airbnb rentals, or budget hotels can help you save money on travel, especially if you’re planning a longer trip. These types of accommodations are often less expensive than traditional hotels and can provide a more authentic travel experience. Just make sure to read reviews and research your options before booking.
8. Dine like a local
Dining at local restaurants and markets can help you save money on food while traveling. Local cuisine is often more affordable than touristy restaurants and can provide a more authentic travel experience. Consider cooking some of your own meals or packing snacks for the day to save even more money.
9. Use public transit
Using public transportation like buses and trains can be a cheaper way to get around than renting a car or taking taxis. Public transportation can also provide a more authentic travel experience and help you get to know the local culture. Just make sure to research your options and plan your routes in advance.
The Top 7 Places to Travel to in Retirement
While everyone has different tastes and interests, some destinations are more popular for retirees than others. Here are seven worth checking out:
Europe
Europe is a popular destination for retirees, thanks to its rich history, culture, and natural beauty. From the bustling cities of London and Paris to the stunning beaches of the Mediterranean, Europe has something to offer for everyone. You can visit famous landmarks like the Eiffel Tower, Big Ben, and the Colosseum, and enjoy world-class cuisine and wine in charming cafes and restaurants.
Hawaii
Hawaii is a tropical paradise that offers retirees a chance to relax and unwind in beautiful surroundings. The islands have a reputation for their immaculate beaches, lush greenery, as well as their crystalline waters, creating a perfect opportunity for snorkeling, swimming, and other water activities. Retirees can also spend time immersed in the island’s unique culture and history, with visits to historic sites like Pearl Harbor and the Polynesian Cultural Center.
Caribbean
The Caribbean is another popular destination for retirees, thanks to its warm weather, stunning beaches, and relaxed atmosphere. The region is home to some of the world’s most beautiful beaches, as well as vibrant local cultures, delicious cuisine, and fun activities like snorkeling, scuba diving, and sailing.
National Parks
Retirees who enjoy outdoor activities can explore the many beautiful national parks throughout the United States. From the Grand Canyon to Yellowstone, these parks offer stunning natural beauty, opportunities for hiking, camping, wildlife viewing, and a chance to connect with nature.
If you’re planning a trip that requires more stamina for outdoor activities, consider any possible physical limitations. Hiking the Grand Canyon might sound great at first, but riding a mule down instead can allow you to see the sights without accidentally getting hurt or overexerted.
Australia and New Zealand
Australia and New Zealand are popular destinations for retirees looking to explore unique landscapes and cultures. These countries offer stunning natural beauty, including the Great Barrier Reef and Milford Sound, as well as vibrant cities like Sydney and Auckland. Retirees can also check out the local wildlife, including kangaroos, koalas, and penguins.
Asia
Asia is another exciting destination for retirees, with a diverse range of cultures, landscapes, and activities. From the bustling streets of Tokyo and Bangkok to the tranquil rice fields of Bali and Vietnam, Asia offers a unique blend of modern and traditional experiences. Retirees can explore ancient temples, sample local cuisine, and shop for unique souvenirs in vibrant markets.
Cruise Vacations
Cruising is an excellent option for retirees who want to travel to multiple destinations without the hassle of planning and managing logistics. Cruises offer a variety of activities and amenities, including dining, entertainment, and spa services, all in one convenient package. Retirees can choose from a wide variety of destinations, including the Caribbean, Alaska, and Europe, and enjoy a stress-free vacation.
Spend Time Doing What You Love
Travel is your time. It’s your time to see and experience the world – untethered and unrestricted by the responsibilities of a 9-to-5 job and other household commitments. By creating room in your budget for travel, you can make your dreams of seeing the world more practical.
