When we talk to our clients about retirement planning, one of the most common bucket list items that comes up time and time again is travel. Many of the clients we work with see foreign travel, and even local sight-seeing trips across the US, as a meaningful way to enjoy the fruits of their hard work and go to all the destinations they’ve dreamt about—but never had time to visit.
Cruises, city tours, national parks trips, international travel, and even day trips are all incredible ways to experience new food, music, and culture. These excursions can make retirement particularly rewarding and meaningful. That’s why we always encourage the recent retirees we advise here at Cook Wealth to get out and see the world, while you’re active and eager to explore.
With a bit of foresight, your retirement travel budget can be a key part of your financial plan
An important part of the retirement planning process is getting clear about how you really want to spend your Golden Years. If extended travel or a big trip is one of your retirement plan priorities, those travel costs can be built into your budget.
We recommend keeping the money you plan to spend on your upcoming travel costs in an easily accessible high-yield savings account that offers a good rate on your deposits. (As of this post, we manage our clients’ savings at Flourish.) Utilizing an FDIC-insured high-yield account will ensure you don’t lose your retirement trip money to market volatility just before you need it.
While some retirees choose to keep their trip budget set aside in its own account, there’s no specific reason your funds must be separate from your other cash reserves for this year. A single high-yield savings account is all you need to store the travel money, home maintenance budget, and rainy-day cash you need for the next few months.
At Cook Wealth, we can build your retirement plan around your travel goals
Every year at our annual review, we sit down with our clients to talk about their upcoming financial needs, retirement goals, and estate plan. We view this annual planning activity as a key part of the retirement planning process—especially if you’re considering international travel or big-ticket destinations this year. By reviewing your upcoming goals, expenses, and retirement plans, we can make sure you have enough set aside in your cash reserves, earning interest, until you’re ready to buy the plane ticket and take off.
3 Retirement travel financial considerations to keep in mind
Whether you’re planning to travel abroad or simply prepping for a domestic trip, there are a few important financial considerations to be mindful of:
1. Have a clear idea of your everyday budget and real travel costs
Traveling can be a significant expense—especially if you’re bringing along friends and family, or visiting more than one location while you’re gone. Before you can build retirement travel into your financial plan, you need to have a clear grasp of your average monthly budget at home.
If your rent or mortgage and living expenses haven’t begun to exceed your planned retirement spending, and if no major unexpected costs have strained your retirement savings, you can probably afford to plan the bucket list vacation you want. But if you’re struggling to adjust to your new retirement budget, we may need to talk about ways to reduce your overall spending, so you have money left over for your travel plans.
2. If you’re traveling abroad, consider travel insurance
While travel insurance isn’t something you typically need for a cross-country road trip or weekend in the city, if you plan to travel abroad or visit a high-ticket destination, we can also help you compare travel insurance plans.
Travel insurance offers the peace of mind that if you get sick or injured and can’t take the retirement trip you’ve been planning, you won’t end up footing the bill for it. Some trip policies even cover minor inconveniences that may come up during your trip, like lost luggage, a missed flight, or an overbooked hotel.
Another kind of trip insurance that may be worth considering is travel medical insurance. Because many countries don’t accept US health insurance, this kind of policy extends your health care benefits to wherever you find yourself in the world. If extended foreign travel or multiple cruises are on your retirement travel wish list, this policy can offer the protection you need to travel safely.
3. You can stretch your retirement travel budget with cost-saving discounts
While your retirement travel plans may be a big expense, there are a few ways to manage the overall cost of your trip without sacrificing the experience. Many retirees with flexible schedules choose to travel in shoulder seasons—the few weeks of the year when popular destinations are less crowded. In the off seasons, lodging and tours can be less expensive.
Some travel clubs can also make senior travel more budget-friendly. These clubs give you the opportunity to connect with other retirees and make new friends along the way, while ensuring you get the best prices and discounts on rental cars, hotel rooms, and more.
A third way to travel more and pay less is to find senior discounts. Some hotels and tour companies offer special discounts for retirees in their Golden Years—especially if you plan in advance. And a handful of airlines—including United Airlines—offer discounted senior plane tickets for certain destinations. Before you pack your suitcase and hit the road, take a look at the discounts available throughout your vacation. They just might make a big difference in your travel budget!
Ready to plan your retirement travel? Talk to a Cook Wealth financial advisor
Our comprehensive financial plans help you save smart, invest strategically, and make the most of retirement. To learn more about our responsive financial advisors and holistic retirement plans, book an intro call with our team.