What Retirees Should Know Before They Travel
I had a one on one client in my office the other day, and she was ecstatic with how much money she has already made with Airbnb. Within the first month, she made over $400! The main reason she was so enthused with the amount was she booked a trip without realizing how she was going to pay for it. She always defaulted to using her credit card and figuring out how to pay the balance off later. You might be guilty of this as well, let’s just put the purchase on my AmEx and pay it off later…right? Luckily, she’s been working with me for the past 6 months and now knows that this concept is not the solution. She’s gotten away from this bad credit card habit, and knowing the many evils associated with the credit cards, she has now found a way to help pay for her trip.
And lucky for you, both her trip and strategy for paying for the trip, got me thinking about the number one goal I’ve seen among retirees: TRAVEL! 50% of the people I meet with, who are with coming up to retirement, say they want to travel in retirement and the other 50% say they NEED to travel in retirement. It seems to be on most pre-retirees minds, and they usually have their first trip already planned out. So I did a little research for you, and found some budget friendly travel tips to share. Some might not work for you, but if you are desperate enough to travel, then they are definitely worth thinking about. So keep an open mind!
My Top 5 Cost Effective Travel Tips:
- Look into any discounts you might be entitled to, which include being a member of AAA, AARP, or a veteran’s group. Retirement communities usually offer great discounts when they book group vacations and excursions.
- Traveling when you are older can mean some possible health issues, so travel insurance can be a great thing for your more expensive trips. Travel while you can still enjoy the trip. We had a couple who brought their grandchildren to Paris for their graduation. You might think it was a college graduation, but it was actually just an 8th grade graduation. They wanted to do this trip when they can still get around easily and keep up with the kids!
- How many people are going on the trip? Is it a multi-generational trip? And if so, who exactly is footing the bill for the extra rooms, meals, and plane tickets? If you are booking more than 1-2 hotel rooms, it might make more sense renting a house or condo. Plus you can cook some meals instead of eating out the entire trip, which saves you even more money!
- Try doing a house swap. If you are renting a place, why not rent out your own place especially if it is for an extended period of time. You can use HomeExchange.com, Airbnb, or find a housesitting gig in the location you plan on traveling to. The last one might not cost you a penny!
- Travel in the off season. You are retired, so you have the luxury of traveling whenever you want! Book your trips when the weather is still nice, but when everyone else has school. And you’ll get the added bonus of it being less crowded, which is always nice in my book.
There seems to be a rising trend of spending more and more on travel for retirees. Overseas Adventure Travel has found trips for people over the age of 50 has grown by 67% in a decade. Most people I speak with explain they didn’t have the time to travel or to really enjoy vacations while they were working. They feel retirement is their time to do the things they’ve been putting off for the past few decades. And while I can understand this, it is also important to remember your retirement plan and not to spend it all on a few trips. You are going to be retired for a long time, and need to make sure you stay within the realm of reality with your travel spending. Before you start booking all your trips, think about the following questions:
- Do you have goals set? Will you do one big trip a year, a few weekends, or travel every other year?
- Do you have a plan in place for your retirement expenses? What percentage of your expenses are dedicated towards travel?
- Are you and your spouse on the same page when it comes to how much to spend, what kind of trips you want to take, and who is paying if the children join?
- What are you willing to give up in order to travel more? Less gifts, work part time, rent out a room on Airbnb, shop or eat out less?
Jessica Weaver, CFP®, CDFA™, CFS®