Retirement is a good time to relax and spend time doing the things you didn’t have time to do in your working life. It it arguably the best time to travel. Exploring the world can make your golden years the most enjoyable and rewarding years of your life. But, if you don’t budget for it, you could seriously harm your finances. Motley Fool writer, Maurie Backman, has three tips to help you budget for travel in retirement.
Figure out how much money you can spend on travel each year. Backman writes as a general rule, you can withdraw about 4% of your nest egg’s value each year without running out of money. But, don’t forget to account for taxes and your basic living expenses, like housing, food, clothing and healthcare when you’re calculating that figure.
Prioritize your trips and understand their costs. Identify the trips that are most important to you and really nail down how much they’ll cost, rather than just guessing the prices. Keep in mind, it pays to think ahead, like bumping up those trips that are more physically demanding than others.
Add a buffer. Research and see if there are any senior discounts associated with your most important trips. There might be deals on car rentals, meals, or hotels. At the same time, make sure you build a buffer into each trip’s budget so you have unexpected expenses covered. For example, on a cruise, you may end up wanting to take part in a last-minute excursion. Tips may end up costing more than you anticipated. Also, invest in travel insurance in case your plans are disrupted or you run into a health issue that causes you to cancel your trip.
We hope these tips help you find a way to spend more time traveling in your golden years!