Ah, retirement. The freedom to travel the globe and take advantage of the freedom of not going to work every day. Don’t get me wrong, I love my job, but retirement is the ideal time of your life for travel, since work-related constraints go out the window. Affording those trips though is often easier said than done since you’ll be living on a fixed budget. That’s why budgeting and incorporating your travel plans into your retirement plan is crucial.
Tip 1: Figure out how much money you can spend on travel each year. My husband, Eric, and I are both in our 20s so it’s hard to say for sure how much money we’ll really need to save for our future adventures. Right now we’re depositing extra money each month into our 401(k)s and Certificate of Deposit (CD) so that we have the extra funds to hopefully travel someday. A good rule of thumb is that you can withdraw about 4% of your nest egg’s value each year without having to worry about running out of money. Of course, you’ll have to subtract your basic living needs and other essential costs to know how much extra you’ll have to travel with each year.
Tip 2: Prioritize your trips and understand their costs. Once you get a sense of how much you can afford to spend on travel, your next goal should be maximizing your money. Identify the trips that are most important to you and get a solid sense of how much they’ll cost. Being flexible when you travel is a big money saver. For example, planning ahead, traveling during offseasons, and during the middle of the week can save you money. You can incorporate money saving tips into your plan now by alternating big family vacations with staycations each year. The extra money that you would have spent on a bigger vacation could go into saving for your future travels.
Tip 3: Seniors get big discounts. Eric and I joke all the time with my grandparents about all of the discounts they receive when we go out to eat with them. Think about all the discounts you can save while traveling. Take advantage of all the perks as a senior especially the ones that save you money. Hotels, restaurants, National Parks, and even airfare. There are so many hidden discounts that seniors should be using to save money. The credit union even offers discounts for their members to utilize too. I can’t wait to take advantage of all these perks! (sort of)
Tip 4: Take the Grandkids. Eric and I are both really looking forward to being able to take our future kids and grandkids with us on trips. We both grew up close to our grandparents and enjoyed doing lots of activities with them and we know that we want the same relationship with our future grandkids. Saving more now will help us to plan trips, entertainment, and even an RV in our golden years!
Budgeting now for retirement and thinking about all the amazing places, experiences and fun times we will have with our families is driving us to put a little more towards our retirement fund in our 20s. Consider putting extra money away now in a savings accounts to pave the way for the memories you’ll gain later.
Until next time,