How to Prepare for Travel in Retirement
For most, retirement marks the end of a career and the beginning of an open schedule. Working 9-5 is replaced with a few extra hours of sleep, and Saturday’s plans are no longer reserved for the weekend. But, this reality doesn’t just fall into your lap. The best of retirement is only possible for those with a long-term financial plan, and possibly easier for those in certain geographic regions.
Traveling is a luxury that many reserve for retirement. In fact, research has shown many times that traveling is top of mind for those 50 and over, according to the AARP travel website. If this sounds like you, read on for advice on how to save for post-retirement travel!
The first step in setting a travel budget for retirement is to estimate your travel expenses. This can be a daunting task. Fifth Third Bank suggests frequent travelers begin this process by looking at past travel expenses. Then, after evaluating the amount spent on travel in the past three to five years, calculate an annual travel budget.
Take some time to consider how much more (or less) traveling you plan on doing in retirement, then use this plan to adjust your budget. If your destination bucket list is mostly in the United States, then you will likely need less money for air travel than someone who has their heart set on European adventures. And, if you plan on primarily living out of a suitcase, you may want to double your former travel expenses while making a budget.
Once a budget is set, it’s time to save. Many find themselves spending more than they originally planned, or struggling to afford the same quality of travel that was pursued pre-retirement. Though this may be a sacrifice some are unwilling to make in their travel experiences, travelling smart by looking at comparable deals is typically well worth the money saved.
Taxes are another factor to consider when saving for retirement adventures. Paying attention to taxes and taking steps to reduce your tax burden can have significant benefits in the long run, as money saved is money that can be used towards a vacation. An IRA and a Roth IRA both offer tax advantages, so it’s recommended to put money aside in one of these accounts.
It’s never too early– or even too late– to start planning for retirement. Regardless of your current retirement plan’s status, it’s time to evaluate where you stand so that you can travel freely in retirement. Happy (and safe) travels!