When planning your retirement, there are many things to take into consideration. Retirement is not the same for everyone and while to some it is about freedom, having choices and independence, to others it may be about security, maintaining health or nurturing family relationships. Overall, travel always seems to play an important role in retirement. Traveling not only helps you stay connected with family and friends, but it feeds the spirit of adventure and helps you find a sense of purpose. Although many of us have daydreamed about the idea of traveling the world through our retirement years, how have you woven travel into your personal financial plan for retirement?
The Retirement Honeymoon Phase
Retirement has different phases and during the honeymoon phase, retirees immerse themselves in activities and projects they have always wanted to do but were too busy to do it before. These often include traveling, adopting a new hobby, volunteering and sometimes working “honey-do-lists.” Life remains busy but exciting! However, retirement can be one of the biggest transitions people make with shifts in purpose, routines, social circles and finances, and switching a mentality to go from a saver to a spender is probably one of the biggest transitions. Rather than being active and busy, some retirees tighten up and revert to college-like budgets afraid to spend savings because they don’t have a financial plan. Others struggle with their free time or they realize that golfing 24/7 leaves them unsatisfied; and they risk finding themselves bored or worse…boring.
Adding Travel to Your Retirement Budget
Traveling depends on your retirement plan. Planning can help you overcome two big financial challenges. The first is working out a retirement spending plan. A good financial habit is to periodically revisit why you are saving for retirement especially when times are tough. An unexpected expense can have a negative effect on your savings, or a bear market may send your wealth into hiding temporarily. In the meantime, control the things you can control such as saving, spending and diversifying. The curves will eventually straighten, and you’ll be back on track. While some retirement expenses are relatively constant (basic living expenses), others can be lumpy or retirement-stage dependent (travel, home remodels, repairs and replacement, health care and assisted living). The second involves maintaining your lifestyle regardless of the state of the economy. This means keeping your foot on the gas while others are braking. Maintain your travel plans in economic downturns – prices may be cheaper and the lines shorter. And a solid financial plan includes having sufficient and steady cash flow from investments, pensions, Social Security, etc.), liquidity or a rainy-day fund to handle emergencies or take advantage of buying opportunities, and little or no debt.
Retirement Travel Options
People have varying “travel appetites” from week-long vacations or adventure travel to full out road gypsies. Some will hit the road with road bikes, motorcycles or RVs. There is a big difference between a couple big trips and a more permanent life on the road nationally or overseas. All traveling involves research, networking and finances, and some require more specialty work including taxes, legal, health care, domicile/residency and more.
Some of the questions you should ask yourself are: What are you going to do with your home? Would you lease it, use it as an Airbnb or swap it? There are many resources online including community forums whether you are looking for a place or putting yours in a rental or exchange pool. Rick Steves offers house swap tips – some people enjoy it as a budget option, some include cars, but most draw the line at pets. For more information, visit www.Homeexchange.com, www.Thirdhome.com and www.Lovehomeswap.com.
Another unique travel opportunity is a volunteer vacation where you contribute skills and experience in the U.S. or abroad. It can be a rewarding blend of interaction, making a difference and cultural experience. There are numerous opportunities that require people with diverse skillsets. International Volunteer HQ offers over 200 projects, Global Vision International includes internships for potential career opportunities and the Sierra Club runs about 90 service outings ranging from one week to six months.
And finally, some travelers are very tech savvy and prefer to book their trips online. Retirees have the advantage of having time to shop and research and have flexibility on their traveling dates for last minute deals, off-season rates and mid-week airfare. Others however, value the guidance, budgeting and planning offered by professional travel agents or companies. You can find more information at www.Backroads.com, www.MythsandMountains.com and www.FriendlyPlanet.com.
Travel is not only an option but an important part of retirement. It can be an opportunity to rest and relax, adventure and explore, to make new connections and deepen those with friends and family, and help others. As Gustav Flaubert said, “Travel makes one modest. You see what a tiny place you occupy in the world.”
Happy trails ahead!
This article can also be viewed at the Reno Gazette Journal.