6 Tips on Saving and Planning Extended Travel When Retired

Do you picture yourself traveling extensively once you turn in your retirement notice to your employer and collect your gold watch?

Even if you have the financial means, doing so will take a lot of planning and work to make it happen.

Introduction

Ah, the good life. All those years worked so you and your spouse or partner can spend up to months on end each year traveling and enjoying your time, exploring the U.S. and possibly the four corners of the world.

While it sounds great, it actually takes a lot of planning even if you have the resources to make it happen.

To be clear, we’re not talking about making arrangements for mail, having your pets cared for and a neighbor or family member turn on and off lights to make it appear someone is home while you are gone. No, there are bigger issues that must be addressed.

The key to enjoying worry-free travel in retirement, especially when it’s extended for weeks to months at a time, is to ensure you cover all the bases and to start the planning early.

Today we are going to examine six key issues that should be considered if you plan to travel for extended periods in retirement.

Assess what’s available

When thinking about retirement, many people view travel as a must. For those with the financial means, this can equate to frequent travel, such as monthly sojourns or trips that can last for months-on-end each year.

Let’s face it, travel isn’t cheap, so having financial stability will directly impact your ability to get away. It will certainly impact the amount you can travel, the type of things you do (excursions, events, etc.), and even where you go.

Whatever your situation, you need to determine what might be realistic based on what you can afford while paying your other bills and maintaining your standard of living over the remainder of your lifetime.

Beyond just the dollars you have in savings, you’ll want to look at what you own. Here are three key questions you need to consider:

• Do you have accounts and assets that underpin a safe asset allocation built to minimize risk and survive inevitable market downturns?
• Do you have a tax plan in place to ensure you pay the least amount to Uncle Sam?
• Do you have tools that can help ensure you don’t outlive your savings, such as certain annuities?

Taking a good long look at what you have will help ensure you can take those trips and not have to worry.

Long range travel planning

Once you have a sense of your overall retirement budget and what’s available for travel expenses as a whole (what you think you’ll spend on travel over the course of your retirement), you should start with a long-range travel plan that lays out what travel might entail in those golden years.

If you have the time and financial wherewithal, you might want to really get away for extended periods, even months on end.

While short trips a time or two some months are easy enough and don’t require much planning, the longer length trips take more time and budget, whether you are heading out in the RV, flying overseas or hitting ports abroad via a cruise ship or yacht.

Piecing those plans together for a single year can be tough enough, but doing it for a number of years can get challenging, much like a 2,000-piece puzzle.

Granted you don’t have to plan each trip when you are doing this type of big picture extended travel planning before or early into your retirement, but you do want to approach from the standpoint of putting pieces together in a manner that makes sense for a number of years, much like an outline.

A big issue to consider in your extended travel planning is your bucket list of places you wish to visit. You know, those places or events you’ve always

dreamed about. Camping and hitting national parks across the western U.S., visiting museums or ball parks across the country, a biking tour through Ireland, summering in the South of Spain, a tour of Asia, a Mediterranean cruise, hiking the Appalachian Trail, etc.

Rushing is the last thing you want to do with these special types of bucket list journeys, so better to address as whole well in advance, then break them out into individual years when you will actually do them. And you probably want to spread your extended-travel trips out over a number of years.

Four or five would encompass a major part of a year and be exhausting. One or two in a year will likely be plenty. Chances are you’ll still do short get aways in between, so your travel itinerary for the year will likely still be more than full.

You also want to think about this in terms of how many years you see yourself taking long, extended-travel trips. Can you see yourself doing this when you’re in your late 70s or 80’s?

Fact is that living out of a bag and traveling can get old, no matter the length. Maybe you have six to seven major bucket-list locales you wish to travel to and stay for a month or longer in your retirement.  And you wish to do this at a rate of once to twice per year. And probably earlier on in your retirement while still healthy.

In that scenario you might be looking at five to seven years of such travel (if doing them each year), which would need to be incorporated in your long-range travel plan. Thereafter the extended trips will likely be curtailed.

Bottom line, travel may dominate your retirement for a number of years to come, so it’s best to plan it out, ensuring it fits your overall budget.

An important point on your yearly travel, plan to include an emergency fund built into your budget for each extended-travel trip, just in case.

Yearly trip plan

Once you have created your long-range travel plan, now you can focus on your first year of travel. This should probably be started during the latter portion of the current year for the following year’s travel plan. For example, start your 2024 travel plan in 2023 and decide which one or two extended-travel trips you hope to take next year.

Using your long-range plan as a guide, you can determine which trip(s) you want to take in the coming year. As you make that decision, keep in mind what’s going on in each area, from festivals and other events to best time of year based on weather, availability and costs of housing (in-season the cost of hotels and B&Bs/Airbnb can skyrocket and availability can dry up completely – out of season the opposite can occur), and more.

Given this is extended-travel, start to think about all the major cities, as well as smaller towns and villages you plan to visit during your extended-travel trip. You might want to base out of one locale and do excursions to other places from there.

Additionally, you will likely be doing this as part of an organized tour (plan to travel via bus with other people), create your own private tour (really gets expensive) or plan to rent a car (adds up with insurance and gas) for the length of the trip.

Whatever your choice, it makes sense to at least inquire with a travel agent experienced with travel in the area you plan to visit.

As you can see, the yearly plan differs from your long-range travel plan, as it gets specific in detail. Where you will visit (main stay in one city to excursions in other places), how long you will stay, the exact dates, lodging, how you will get from A to B (planes, bus, trains, rental car), and much more go into each year’s travel plan.

Documentation and restrictions

Obviously you are going to need travel documents if you plan to travel out of the country. For many areas, such as Europe (EU), a passport is all you’ll need for regular trips of a week or two, and even up to 90 days, but there are restrictions beyond 90 days, according to the U.S. State Department.

Many other areas of the world require a Visa to enter. For example, to visit Vietnam you will need to apply for a Visa (you can purchase an E-visa online), which allows for entry for up to 30 days. You can’t stay longer.

Keep in mind that if you were doing an extended-travel tour of the far east, you would need a travel Visa for each country you planned to travel to in that tour. And each might have a different restriction on how long you might stay in their country.

One last consideration when it comes to travel documentation is the fact it can take months to obtain necessary documentation for travel to some countries. As such, you have to get on this well in advance of your planned travel date.

Added benefits and savings

Although you’ve determined you can engage in extended-stay travel during your retirement, you’re still going to want to go about things in the smartest way possible. When it comes to travel, receiving value-add benefits and saving money are both smart, no matter your plans on where you wish to visit, what you’ll do, etc.

Some smart ideas in terms of benefits and saving money (extended-travel or not) include the following:

• Multigenerational family travel – Offers time to spend together as a family that might normally be impractical or not an options given busy schedules. Costs can be reduced when renting a home together, group discounts at attractions, sharing food costs, and more
• Friends – While family travel can be great, doing so with the friends you choose to spend time with (and that are close to your age) can be especially rewarding. Again, costs can be reduced through sharing when it comes to housing and food, and even when it comes to transportation, such as renting a car together
• Tours/clubs/groups – We often tend to think of travel groups or clubs in a negative light, which can be true in some instances, but they can provide invaluable benefits as well. Beyond discounts they might offer, there is the benefit of providing a tour guide, as well as the safety and peace of mind that comes with traveling as part of a larger group
• Senior discounts – Companies the world over tend to offer senior discounts as an incentive for anything from meals, attractions, transportation, lodging, and much more

Travel Insurance

Many people think of travel insurance as an added cost they can save money on by avoiding. Fact is that it isn’t. They also tend to believe their existing insurance coverage, be it health, auto, etc., will cover them if the unexpected occurs while traveling. Again, this assumption is almost always wrong.

Beyond simple lost baggage issues and replacement, travel insurance covers many things. That coverage varies in terms of what’s included, but generally it covers trip cancellation and delay issues and cost. This can be for reasons ranging from your sudden inability to travel, airline or hotel cancellations (due to most any reason), medical-related travel restrictions such as what occurred recently with Covid-19, geopolitical unrest, natural disasters precluding travel, and much more.

While traveling there are additional considerations to consider. Your health insurance will probably not cover you, be it for treatments or prescriptions. In most places you will have to pay out of pocket (immediately) for hospital, provider and pharmacy costs. If you need to be evacuated for some health issue, that is on your dime unless you have travel insurance.

An added consideration is the fact the travel insurers have the resources and contacts to make things happen quickly and efficiently, which can include evacuations for any reason, coordinating your health care with local entities, assisting with documentation (lost documentation), and more.

Conclusion

Travel is expensive. And it takes planning, no matter how much you might want to do in retirement. If you plan to travel, you have to be sure to include it in your overall retirement plan. And in your yearly budget.

Given that travel in general, and definitely on an extended basis, should be included in your retirement plan, you should reach out to a retirement planner sooner rather than later if you aren’t already working with one.

At Oak Harvest we can help you with a retirement plan and will be sure to incorporate such travel costs. We offer tools and learning resources you can utilize to educate yourself on retirement. And we can build a holistic, comprehensive retirement plan addressing relevant issues, utilizing strategies that cover taxes, income, spending, healthcare, legacy, and more, customized to your family’s specific needs.

A plan created with the goal of ensuring you have the best opportunity of living out the retirement you and your spouse envision.

If you are ready to take the next step and talk to a team of retirement planners who can advise on all your retirement needs, and who will put your interests first, Schedule a call today!