Even though we have quite a while, although not as long as we’d like, before retiring, Mr ESLT and I are already planning for the day we can finally escape the rat race. We have dreams of visiting far-flung places and possibly even taking at least one around the world trip like Mr ESLT’s mum did when she retired. However, to ensure that we are able to do that we need to ensure that we have the funds to do so. Saving money these days is difficult, we appreciate that but by making small changes now could in the long term ensure we are able to take the trips we want to in the future.
“A goal without a plan is just a wish.” ― Antoine de Saint-Exupéry
We work nonstop, saving and investing for retirement, dreaming of a relatively carefree life without the everyday stress we endure in our jobs. Travel is near the top on many retirees’ wish lists, including ours, but it is one of several expenses that many retirees forget to budget for earlier in life. We need to consider the potential costs of travel during retirement and our ability to handle them. As we follow a definite plan to secure our retirement income, we need to work deliberately to fund our retirement travel. Without a regular income following retirement, we need to ensure we have enough put aside, whether that be in pensions or savings accounts, to carry on travelling for as long as we can and are able because we certainly do not want to face bankruptcy in order to fuel our wanderlust.
Thinking It Through
When financial planning it’s important to always start by considering factors that you may overlook with no planning. Our goal is to be financially independent in every area of our life by the time it comes to retirement. Therefore, it’s well worth the time and effort to include travel plans in retirement budgeting. With a clear focus on how much we really need to save up in order to continue to travel, we can avoid being disappointed later in life.
To help you project your retirement travel costs, you will need to answer these questions:
- How much travelling do you want to do? Do you want to travel around the world for 6 months each year or just take a break for a few weeks each year?
- Do you want to “pull out all stops” and live it up, or do you intend to travel more frugally?
- What are your financial and family obligations at home?
- How is your health? Your partner’s health? Are you well enough to handle constant travel?
- Have you budgeted for travel insurance? It’s vital you have it regardless of when or where travelling.
Your travel budget will be as unique as you are. Financial advisor Rebecca Hall suggests that you save $1 million for every $50,000 you intend to spend on travel, which is completely out of the question for most people, including us. Therefore, Mission Wealth co-founder Brad Stark recommends putting aside $200,000 to spend on travel expenses over 10 years or until it is gone, which again may not be remotely possible, however by revamping your current retirement plan you may be able to accommodate your travelling aspirations, or at least to a reasonable degree – we have already started saving!
Other Routes to Your Travel Goals
You might also want to adjust some of your travel plans, especially if saving the suggested figures above is a pipe dream. You can find a host of options to travel on a reduced budget, including:
- Travelling during the off season
- Travelling during off-peak times
- Using discounts/ points schemes
- Lodging in inexpensive hotels, hostels, Airbnb
- Visiting developing countries where food and lodging costs are low
- Volunteering with a humanitarian organisation
- Picking up some part-time work or starting a small business to provide extra funds, maybe consider blogging or freelancing?
Unfortunately, most people are not adequately preparing for life after retirement, let alone travel. Planning is essential to realising your retirement dreams. An expert financial planner can point out critical issues that you need to consider and offer guidance to help you achieve your goals. You can travel after retirement – if you count up the cost in time and try to put into place now, things which will benefit you when the time comes.
If you want additional information about trips and what they cost, check back in with us at Eat Sleep Love Travel!