How To Budget For Travel In Retirement | Baby boomers

The allure of travel can be strong for retirees who now have the time to take extended trips. From visiting family and old classmates to trotting the world and immersing yourself in historic sites, the options are almost endless.

Before establishing your travel plan, it is essential to take a close look at the costs. “The travel budget should be defined as part of your overall financial plan,” says Patti Black, Certified Financial Planner and Partner at Bridgeworth LLC, Birmingham, Alabama. Here are strategies to help you plan your trips on a budget and get the most bang for your buck in retirement.

Start with the big picture. Before planning your trip, take a look at your retirement income. You can have money from a variety of sources, such as distributions from retirement accounts, investment products, properties you own and rent, and Social Security. Calculate your total annual income, then take a look at the expenses you can’t avoid in retirement. These may include the cost of housing, health insurance, food and vehicle maintenance. Subtract these defined expenses from the overall income. “Then figure out how much of that total amount you want to spend on your trips,” says Black. Your retirement income for the coming year may be $ 50,000. If you have $ 10,000 to spend after paying for the essentials, you may decide to spend $ 5,000 on your commute.

Think across places. If there are several states or countries that you hope to explore, it may be helpful to write a list. If you have the travel bug but don’t know where to go, first search for destinations online. Talk to other retirees who have taken trips and ask for recommendations.

In addition to visiting new places, you may want to visit children or grandchildren who do not live in your area. Watch upcoming graduation ceremonies, weddings, reunions, and other special events you’ll want to attend in the coming year that will require travel.

Estimate the total cost. Once you have an idea of ​​where you want to go, start checking the prices. For places you’ve never visited before, plan in as much detail as possible to get a good idea of ​​the costs. “Think about what you want to do each day of your trip,” says Patricia Hajifotiou, owner of The Olive Odysseys, a travel agency in Greece. “Write it down, then right next to it, write down what it’s going to cost. The process will help you avoid neglecting daily expenses, like a cab ride to the airport or tickets to an art museum.

For cruises and tours, ask others who have taken similar trips to tell you about their experiences. You may learn that they paid a little or a lot more than the price of the original trip. A cheaper river cruise in Europe, for example, could have so many excursions with additional costs that it could end up being much more expensive than a higher priced Caribbean cruise.

Set up deadlines. Knowing what you can afford to spend on your trips each year, along with an estimate of the cost of trips, will allow you to start planning. You may find that some trips have to wait another year, or you may want to devote a portion of your multi-year earnings to a dream trip. “Everyone’s circumstances, strengths, priorities and goals are different,” says Lou Cannataro, partner at Cannataro Park Avenue Financial in New York. You could reduce some costs in your financial plan to travel more, such as moving to a smaller house, selling a vehicle, or eating less at restaurants.

Maximize every travel dollar. With the benefits of time and flexibility in retirement, you may be able to reduce the overall cost of each trip. Planning a trip during the off-season or shoulder season, that is, the period just between peak and off-peak periods, can save money. Look online for airline deals to find the best prices. “Consider extending your commutes and traveling slower,” says Joseph Conroy, certified financial planner and financial consultant with Synergy Financial Group in Towson, Maryland. “Take more time in each city and try to live like a local. »You will save on food costs and may be able to reduce the cost of accommodation. Also, try to combine long trips to save on airline tickets. Instead of traveling to Italy one year and Portugal the following year, get to both places in one trip.

Understand that preferences change. You can start your retreat with a list of destinations to visit, but keep in mind that over the years you might choose to see other places or lose interest in certain trips. “The travel budget changes over time,” says Black. Some years you may want to travel more than you planned, and other years you may choose to stay home to be close to an elderly relative. Your own health can fluctuate and lead to a change in the type of travel you want. Rather than a long trek through Asia, you might find an Alaska cruise more relaxing and easier to maneuver.