Travel and transportation costs in retirement can be significant, especially if you plan on doing a lot of recreational traveling. It may not be as big of an expense as housing or medical expenses, but it’s still something worth examining and controlling.
What are the best strategies for keeping your transportation and travel costs low in retirement?
Controlling Your Location
One of the most important strategies you can use to control your transportation and travel costs in retirement is controlling your location. When approaching retirement, many retirees consider the option of moving to a different location; this is an opportunity to downsize, as well as an opportunity to take advantage of an area with lower prices for just about everything.
You might move down the street to a smaller house. You might move to a different city with a lower cost of living. You may even consider moving to a different country if it saves you enough money.
Obviously, there are many considerations that go along with this. But when it comes to transportation and travel costs, specifically, be on the lookout for:
Sidewalks
Does the chosen area have sidewalks? Sidewalks may seem like a secondary consideration, but they can help you save money if they have adequate reach. If you can walk or slowly bike to a location, instead of driving, it can add up to massive savings. At the very least, this gives you more transportation options for as long as you’re in good enough physical shape to walk.
Bike Lanes
If you consider yourself relatively fit, you should also be on the lookout for areas with safe, accessible bike lanes. Bicycles are incredible vehicles that are inexpensive to buy and maintain, easy to operate, and yet much faster than walking. However, they can be somewhat dangerous to ride on busy streets without specific accommodations for bikes. If you want to integrate biking into your transportation strategy, be on the lookout for bike-related infrastructure.
Nearby Amenities
You’ll also want to look at the nearby amenities. The closer the location is to the things you’ll need on a regular basis, the less you’ll have to travel, and therefore, the less you’ll need to pay in transportation and travel costs. For example, if your house is within walking distance of a grocery store, a pharmacy, a doctor’s office, and the house of a good friend, you can save a lot of money simply by walking everywhere.
Access to Transportation
Next, look at access to transportation options. Some houses are closer to the highway than others. Some houses are very close to bus stops and other forms of public transportation. These can cut down on your travel time, while simultaneously maximizing the options available to you and reducing your costs.
General Cost of Living
Of course, you’ll also need to consider the general cost of living of your chosen area. Cost of living affects nearly everything, including things like bus fare, car prices, fuel prices, and even the cost of insurance.
Getting the Right Car
According to Tiger Okeley, “In retirement, your transportation needs and priorities may change. That’s why we see a lot of older adults trading in relatively new cars for older ones.”
Choosing the right car can have a massive impact on your bottom-line budget. If you plan on driving and maintaining your travel independence, you’ll need some kind of vehicle. The question is, which one?
Consider:
Base Price
Think about the base price of your existing car compared to the potential base price of a car you may acquire in the future, and consider how it can significantly impact your travel costs during retirement. If your current car is worth $20,000, and is currently more than you need, you might be able to trade it in for a less expensive vehicle and use the difference for another purpose. Unless you’re driving frequently, you probably don’t need a fancy or expensive vehicle.
Reviews and Reliability
You’ll also need to look at reviews and reliability. You need a car that’s going to be able to last you many years and help you get your money’s worth. Different manufacturers and different models have different reputations, so it’s important to know what you’re getting into before you make the purchase or trade. Look for models with extremely high levels of customer satisfaction.
Safety Ratings and Features
Next, examine the safety ratings and features available. Getting a cheaper car is usually advantageous, but it may not be worth it if that car doesn’t have airbags or seat belts for every seat. Similarly, you shouldn’t choose a car that’s known to have major safety issues just because it will save you a little bit of money; you could end up dying or being critically injured in the hospital if you get involved in a serious accident.
Fuel Economy
One of the biggest ongoing expenses of maintaining a vehicle is paying for fuel, so pay close attention to the fuel economy of the vehicle in question. Even a few extra miles per gallon of gasoline can make a big difference over the course of many years.
Insurance Costs
Don’t forget about insurance costs. You should have an idea of what insurance is going to cost you every year before you finalize your choice of vehicle.
Maintenance Costs
You’ll also need to budget for maintenance. Some cars are going to have greater maintenance needs than others – especially older and less reliable models. Neglecting or avoiding maintenance is not an option.
Mileage
Finally, consider the mileage of the vehicle you’re purchasing. The greater the miles, the more susceptible the vehicle will be to maintenance issues.
Extra Tips
These extra tips can help you save even more money if you plan on driving a vehicle regularly:
Skip the unnecessary upgrades.
Whether you’re buying a new or used vehicle, avoid models with unnecessary extra features. Heated steering wheels and autonomous driving features are certainly interesting, but they aren’t necessary – and they could end up costing you a lot of money, especially if you get multiple upgrades at once.
Pay in cash (if you can).
Financing a vehicle can make sense, but it could also cost you significant extra money in the form of interest. If you can afford to save up for a vehicle, or if you’re trading in an existing vehicle, consider paying all in cash.
Compare insurance costs.
Insurance is often a secondary consideration for car buyers, but it’s a significant expense that can add up over time. Before committing to any policy, do your research, make sure you understand the policy, and shop around to see if any insurance companies can offer you a better deal. In many cases, you can bundle your car insurance with other forms of insurance to save even more money.
Maintain your vehicle.
Some people are reluctant to maintain their vehicle, and they may procrastinate on certain repairs in an effort to save money. However, this is usually a losing strategy. Artificially delaying important maintenance and repairs can make your car more likely to fail, ultimately increasing the amount of damage done and greatly increasing the amount of money you pay. It’s much cheaper, safer, and more convenient to practice routine maintenance.
Avoid superficial expenses.
Next, do your best to avoid any superficial expenses that aren’t necessary for your vehicle, as these will significantly affect your retirement travel costs. For example, washing your car may make it look prettier, but it’s not going to affect the performance of your vehicle.
Consider sharing.
If a vehicle is presenting a financial burden to you, or if it’s eating up too much of your budget, consider sharing a vehicle with someone else. For example, you and a close neighbor can take turns driving the same car and split the expenses.
Public Transportation and Ride Sharing
Another option available to retirees is public transportation, which has the potential to save you upwards of $10,000 a year if you forgo owning a car. Not all areas have access to public transportation, but it’s an option you should consider if it’s available to you.
When investigating the public transportation options in your area, investigate the following if you want to save money:
Options
First, look at the public transportation options that are available in your city. Depending on where you live, there may be trains, subways, buses, or alternative forms of public transportation. Each is associated with different schedules and routes, and probably comes with distinct advantages and disadvantages.
Accessibility
Second, evaluate the accessibility of each option. How easy is it for you to get to a bus stop? Are these routes convenient for you? If you rely exclusively on public transportation, will you be able to get to every destination that matters to you? Are there public transportation options that offer accommodations for people with limited physical mobility?
Reliability
It’s also a good idea to look into the reliability of each option. For this, you should practice taking public transportation yourself, and rely on the opinions of other people who have used public transportation for years. There is likely a schedule in place, but does public transportation consistently adhere to that schedule? Is there consistently ample room during the times you need to use it?
Safety
Don’t neglect your personal safety. In most major metropolitan areas, public transportation is very safe, and there are specific accommodations to protect people using it. However, in certain areas, and at certain times of day, safety may become an issue.
Pricing
If your biggest priority is saving money on transportation, you need to thoroughly look into the pricing models for each form of public transportation. In most cities, there are multiple options for using transportation, such as paying day rate, paying for a limited access pass, or paying for a pass that gives you unlimited access to public transportation for a given period of time. Generally, the bigger and more powerful the pass, the more money you can save.
Convenience and Ease of Use
The cost savings may not be worth it if public transportation isn’t convenient and easy to use. You should be able to pay for a pass and enter the vehicle quickly and without any headaches.
Future
Keep your future in mind as well. Public transportation may be a decent, affordable option for you now, but what will it be like in 10 years when you’re inherently less mobile? Are there plans to upgrade the public transportation in your city, or are there signs that this service is deteriorating?
Physical Modes of Transportation
If you live in an area that supports the option, you could walk or bike almost anywhere. Walking and biking are extremely advantageous, offering the most affordable transportation options. The trouble is, many retirees don’t have the strength, stamina, or mobility they once did, so they aren’t able to take advantage of these options.
Still, if these options are available to you, you should strongly consider them, at least for some of your daily transportation needs. In addition to saving money, walking and biking are forms of exercise that can help keep you in good shape and improve your health, ultimately saving you money and healthcare expenses if you partake in these activities regularly.
Trips and Vacations
Throughout most of this article we’ve focused on daily transportation needs. But we also need to think about periodic trips and vacations. If you’re planning on going on a trip, it probably means you have the financial means to do so without many concerns. Still, it’s a good idea to do whatever you can to save money, protecting your wealth and allowing your money to go further in the process.
Among the best strategies here are choosing destinations with low cost of living, buying tickets at the right time, shopping around, looking for discounts and bundles, and shopping frugally when you arrive at your destination.
With these strategies, the average retiree can do a much better job of controlling transportation and travel costs in retirement. If utilized properly, you could end up saving thousands, or even tens of thousands of dollars every year.
