Retirement is the perfect time to explore the world, fulfilling those travel dreams you’ve nurtured throughout your working years. In fact, according to a recent survey by the Transamerica Center for Retirement Studies, 60% of retirees dream of spending their golden years traveling. And it's no wonder—travel can broaden our horizons, rejuvenate our spirits, and create lasting memories.
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While your newfound freedom allows ample time for adventures, the costs can quickly add up if you’re not careful. The good news is that with thoughtful planning and a few savvy strategies, retirees can satisfy their wanderlust without draining their savings.
Here are eight practical tips to help you make the most of your retirement travel dreams while keeping your savings intact.
A helpful way to plan for travel in retirement is the 50/30/20 rule. This rule divides your after-tax money into three parts: 50% for essentials, 30% for things you enjoy, and 20% for saving. Travel falls under the "things you enjoy" category.
Most retirees spend about 5% to 10% of their yearly budget on travel. Some retirees save up a lump sum each year for a big trip, like $10,000 for an overseas vacation. Others might plan on spending around $5,000 per year for the next decade or so.
The earlier you plan your trip, the better. Airlines usually open up their flight schedules about 11 months before the travel date. Instead of booking immediately, spend some time looking at prices for your trip. This way, you'll be able to spot a good deal when you see it.
A good time to book domestic flights is usually one to three months before your trip, and two to eight months before for international flights.
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Thanks to vacation rental platforms like Airbnb and Vrbo, travelers can skip traditional hotels and choose from various condos, apartments, or houses. Hosts on Airbnb often provide discounts for stays of 28 days or more, making longer visits more budget-friendly.
Staying longer also allows for a smoother adjustment to a new city, reducing the pressure to see everything at once. If the weather isn’t favorable one day, there’s no rush to visit a tourist spot; you can wait for a nicer day.
Don't let currency exchange fees eat into your travel budget. Before you go, do some research to find the best exchange rates. Compare what banks, currency exchange booths, and ATMs are offering.
Using a credit card with no foreign transaction fees can be a good option for purchases, but double-check if there are any extra charges for converting currencies.
Another tip is to withdraw larger amounts of local currency at once to minimize ATM fees. Just be sure to keep your cash safe!
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Having a basic idea of what things usually cost in different destinations can help you avoid being overcharged, like a hidden "tourist tax."
For example, check the average taxi fares before you go so you have a general idea of what to expect. Look up typical prices for things at the market so you can feel more confident when you're bargaining. Knowing how to buy official bus tickets ahead of time can help you avoid paying too much for a bus ride.
Tip: Websites like Numbeo or Expatistan can be useful for getting a sense of the cost of living in different destinations. They often have information on things like groceries, transportation, and dining out, which can help you plan your budget more accurately.
Sources: Investopedia, SmartAsset, The Economic Times, Second Wind Movement
