Are you dreaming about traveling and exploring the world in retirement?
If yes, you’re not alone. According to the 18th Annual Transamerica Retirement Survey, to travel the world is the most common retirement dream and shared by 70% of Americans.
When you retire and have so much free found time on your hands, traveling the world will be an ideal time spending. It would be nice to find yourself leisurely strolling the cobble streets of Florence, enjoying the secluded sandy beaches of the Algarve region in Portugal or hiking the mountains and ancient ruins of Machu Picchu in Peru.
People entering retirement today are more active and adventurous, and they want to explore the world. I know that many of us have a bucket list of places and countries we want to visit in retirement.
But traveling could be expensive. It includes not only dreaming about beautiful places, but the cost of air tickets, accommodations, transportation, food, tickets to museums and exhibitions, travel insurance, and more.
When you retire, you’ll likely spend more than you ever before. The good advice is to hold back on big spending and stick to your budget. You don’t want quickly to blow through your savings like there is no tomorrow.
But before mapping out your trip schedule, you need to look at your finances and see if you can afford to travel.
Look at your financial situation
When you stop working and start living on a fixed income, you have to be careful with your spending habits. In retirement, the only paycheck you have is the one that comes from your savings and another one from Social Security.
Look at you your overall financial situation and decide if you can afford to be a long- term traveler or just allow yourself a couple of visits to see family and friends. There is a big difference between life- based travel and a two-weeks’ vacation trip.
If you’re planning to retire within 5 to 10 years, take an inventory of your retirement savings – 401(k), IRA, Roth IRA, your investments, your bank accounts, and estimated Social Security Benefits. Calculate your total retirement income.
Then look at your expenses and calculate the cost of mortgage or rent, utilities, cars, food, clothing, insurance, and medical cost. Subtract your calculated expenses from the total retirement income.
Do you have enough money to cover the cost of travel?
For example, you calculated that your retirement income coming from all sources will be $50,000 and your basic cost of living is $40,000. According to the calculation you can spend $10,000 on travel without taking any extra money from your other savings.
Make a list of places you want to visit
The key to any successful travel is to plan ahead of time. Do you have a list of countries or places you want to visit? The world is a big place and there are so many wonders you want to see and explore.
Once you got an idea of how much you can afford to spend on travel, your next goal is to make a retirement bucket list.
Our retirement years are a wonderful opportunity to fulfill those dreams we’ve held for many years. If you don’t have a retirement bucket list written down yet, don’t worry – most people probably don’t have it either. But I am sure that you may have a few places in mind that you love to visit.
I discovered that writing down your bucket list is a great way to put down on paper your hopes and dreams for your retirement years.
If you’re looking for some inspiration, here is my retirement bucket list. Read through some of my ideas and combine them with your own.
- Live for 3 months in Paris, France
- Take a boat vacation on Canal du Midi in France
- Go to Brazil for the Carnival in Rio de Janeiro
- Travel across Italy by car or train
- Take a gondola ride in Venice, Italy
- Take a food tour in Rome, and a cooking class in Florence
- Buy tickets for La Scala opera house in Milan
- Travel across Spain and Portugal by car or train
- Take a trip across Austria and Switzerland
- Visit Argentina and Chile
- Visit Singapore and Hong Kong
- Visit Japan for cherry blossom season
- Book a trip on the Orient Express
- Go on African Safari
- Visit Morocco
- Take 15-days river cruise along a Danube river
- Visit Azorean islands
- Visit Madeira island
- Travel to Seychelles
- Spend Christmas and New Year in London, England
- Visit Edinburgh Castle in Scotland
- Live in Aix-en-Provence, France for a month
- Go on a cruise and visit Greece and Turkey
- Visit Dubai
- Visit Thailand and Malaysia
Estimate the cost of travel
Finding enough funds to do everything you want in retirement can be challenging, especially if you have to live on the reduced income.
After you figured out how much you can spend on travel and came up with your bucket list, the next goal is to get a solid sense of how much the trip will cost.
Today it’s very easy to find all the necessary information about the cost of living in different countries. The internet is full of websites with all kinds of data from different sources.
Roman and I like to travel. We have set up a separate bank account for travel expenses and save money diligently there every month. We are still working full-time and our regular paycheck helps to pay for our current vacation trips. On average we spend 5,500 for two people per seven-day trip. But we like to splurge and during our travels, we stay at the nice hotels, all-inclusive resorts or going on the cruise vacation.
We found that the average spending amount is comfortable for us and try to fit it into our travel budget when planning for a trip. I know that everything will change once we retire. We will be living on a fixed income and have to fit our future travels into our financial limit.
For your travel in retirement, you might prefer to go with a more detailed analysis of budgeting. If you do, you should calculate the cost of accommodation, transportation, food, entertainment, and then build your budget around those items.
Are you planning to take short travel trips like 5 to 7 days? Or you can afford to go on long-term travel, like 3 to 6 months or maybe even a year-long?
When you go on long-term travel, you’ll have the same basic needs as you do at home. Research the fixed cost of rental apartments, utilities, groceries, and public transportation and then budget it as a per-day amount. Then add the cost of air tickets to get to your destination.
Here is the list of items for your research:
- Rental Apartment
- Utilities – Electricity, water, cooking gas
- Eating out
- Cell Phone
- Public transportation – bus, train or ferry
- Rental car, gas, insurance
- Entertainment – entrance fee to museums, art galleries, tickets to a movie theater, opera theater, local excursion, food tour, cooking class
- Health Insurance
- Air tickets to the destination
After you created a list of your future travel expenses, write beside each item what that is going to cost.
A website like Numbeo will make it easy to figure out what will be your cost of living in different countries.
When planning for long-term travel in retirement don’t forget to leave a room in your budget to pay for your household expenses. Even you’re away exploring the world, you’ll still need to pay for your cost of living at home – mortgage/rent, utilities, car insurance, phone, and medical insurance.
Schedule your trips
Once we retire, we are more flexible in our travel time and that is why we may be able to reduce the overall cost of each trip. If you want to maximize every travel dollar, you should schedule a trip during the off-season (sometimes it’s called “shoulder season”), which is the time between the peak and low seasons.
You don’t want to travel to Europe in the middle of summer – June, July, August because you will hit the major tourist crowds and will overpay for everything. You’d rather choose your trips during September, October, November or March, April, May.
Watch online for airline deals to find the best prices:
Plan for slow travel
Decide what do you want out of your travels? A fast tour seeing everything there to see and changing locations every 2 to 3 days? Or do you want to spend your travel days leisurely and got to know the places, people, culture and food in a more authentic experience and off the beaten path?
Traveling slowly can be a more inexpensive option than a typical tourist vacation trip.
You’ll save on the cost of food if you buy your groceries and cook your own meals instead of eating out. Instead of buying food at the supermarkets, visit the local markets and buy fresh and seasonal products from the local farmers.
During the travel, the cost of the accommodations besides the air ticket is the highest. You’ll reduce the price of accommodation if you stay in rental apartments, hostels or budget hotels instead of staying in upscale hotels.
Also, if you want to save on air tickets, try to combine a visit to several places in one trip. Instead of going to France one year and to Spain the next, plan to go to both places in one trip. You’ll have the 90-days visa-free to explore both countries without applying for a long-term visa if you want to stay longer.
For example, flights from Boston Logan airport to Europe are about $1,200 on average per person. The price of a rental apartment is about $100 per night or less if you rent it for one or two months. A two-week trip to France will cost you $3,800 – $1,400 accommodations and $2,400 air tickets.
But if you stretch that trip to three weeks, the price will go up only $700 since you don’t have to buy an air ticket for the third week. So, the cost of a three-week trip to France will cost you $4,500 – $2,100 accommodations and $2,400 air tickets.
Stretch that trip to four weeks and the price will go up only $1,400 since again you don’t have to buy plane tickets for the third and fourth weeks. The cost of a four-week trip to France will cost you $5,200 – $2,800 rental apartment and $2,400 air tickets. The longer you stay in one place the more money you’ll save on your travels.
Those websites are helpful to find accommodations for your trips:
Traveling the world in retirement can be your dream life. While many retirees will be happy to spend time at home and go on a short vacation trip once a year, others prefer a more adventurous lifestyle.
If you’ve always seen yourself traveling around the globe in retirement, you need to start preparing yourself for the next adventure of your life. Take an honest evaluation of your finances, write down your travel goals and dreams and prepare your daily budget.
Are you planning to travel in retirement? Share your thoughts and ideas with us about your future travel trips.
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