Ah, the Golden Years. Who hasn’t dreamed of sailing into retirement on the balcony of a cruise ship, or spending their non-working days watching the waves crash on a foreign beach? Unfortunately, too many retirees neglect to consider how expensive travel can be; we see it all the time here at NW Tax and Wealth.
The good news is, if extensive travel is something that you’re looking forward to, the sooner you begin to plan for it, the better and you might be able to turn your ideas of travel into reality as you move towards retirement. Here are a few tips on how to do it.
Be Specific About Your Plans
Do you imagine months-long safaris in Africa? Or are a few days on Daytona Beach more your speed? Be specific with your financial professional about your travel goals, and talk timelines, too. If you’ve got grandchildren 1,500 miles away you plan to visit four times a year you’ll need a different budget than someone whose idea of travel consists of one perfect week in Cancun. Consider that most retirees really slow down their excursions once they hit around 70; experts call it the difference between the “go go years” and the “no go years.” But don’t stop saving: those over-70 travel expenses can actually be redistributed to cover rising medical costs.
Calculate Your Costs
Again, a financial professional can help you iron out the details, but it’s imperative to have a specific annual travel budget in mind as you plan and save for retirement. Do you like to stay at five-star resorts or are you okay ‘roughing it’ to see more places? People tend to underestimate the cost of travel, so as a general rule of thumb, it’s probably a good idea to over-save by at least 20%. And whatever you do, don’t forget to factor in inflation! That $400 plane ticket today might cost you $600 or more by the time you stop working.
Start Saving Soon
And not just saving in your 401k or other retirement vehicles. In fact, those should be considered “off limits” for discretionary retirement expenses such as travel. While you’re still working, consider making a pseudo-drastic life change such as downsizing your home or taking on part time work. Consider the money you make a bonus to stash away for travel one day down the road.
Explore on a Shoestring
Great news: traveling as a senior affords you lots of benefits. Sign up for discount clubs like AAA and AARP and reap the rewards wherever you go. Also take advantage of airline and hotel reward point programs offered by major credit card issuers. And lastly, if you travel for extended periods of time, consider renting your home to cover some of your living costs. A couple grand a month can either cover your own mortgage or go a long way towards making your trip more attainable.
Traveling after retirement isn’t impossible! It could very well be entirely within your reach as long as you start planning early and save with purpose. NW Tax and Wealth works with clients every day seeking a fulfilling, exciting retirement…how can we help you achieve your retirement goals and objectives?
By contacting NW Tax and Wealth, you may be offered information regarding the purchase of insurance products. All of our financial professionals are licensed insurance agents. Additionally, some individuals may also be registered with a broker/dealer or as an investment adviser. Our financial professionals do not offer estate planning, tax or legal advice. Always consult with a qualified advisor concerning your own situation.
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