How to Afford Stress-Free Travel in Retirement

Summary: Many Americans dream of traveling during retirement. However, the cost of retirement vacations often catches people off guard, leaving them unprepared and stressed for their dream trip. This article explains how to prepare financially for your retirement vacation and bring costs down for a stress-free and enjoyable trip.

It is possible to balance financial responsibilities with the desire for an enjoyable retirement vacation. But you first need to know your budget before you can plan for travel during retirement. Here is a list of important things to keep in mind as you plan.

Set realistic budgets

Setting realistic budgets is the cornerstone of any successful travel plan. If you’re living on a tight budget, with little saved or invested outside of Social Security benefits, your travel options may be limited. However, if you have a larger budget with multiple income sources in retirement, you’ll have more flexibility and potentially more travel opportunities.

Begin by evaluating your financial situation and determining your travel priorities. Consider factors such as the cost of transportation, accommodations, activities and meals.

Secure travel insurance

As you build your budget, don’t forget travel insurance, especially if in or nearing retirement age. The private insurance you carried during your working years may have covered you if you traveled outside of your state or even outside of the U.S., but standard Medicare usually only offers coverage within America.

Travel insurance, which may cover things like health emergencies and stolen or broken valuables on your trip, is encouraged. As with any insurance policy, you’ll want to check each line item of the travel insurance policy before you hit “purchase” to understand what is covered or not covered.

While deductibles and coverage are key, it’s equally important to know if the insurer pays upfront or reimburses you later.

The best destinations for retirees have a good exchange rate

In some cases, retirement destinations offering the best value for money are those where your money stretches further. For instance, in Mexico, a US dollar is worth approximately 19 Mexican pesos.

Many places in Europe are more affordable than in America. However, one dollar only equates to 0.88 Euros, so a European vacation will be far more expensive.

Choosing a retirement vacation destination with good access to healthcare and a good exchange rate can help you maximize your experience. Just remember that foreign exchange markets fluctuate.

Finding other ways to save on travel in retirement

Once you have your insurance needs and exchange rates sorted, you can explore plenty of other creative ways to save on travel expenses.

Get a card with zero foreign exchange fees

Foreign exchange fees can eat into your credit card balance if you’re not careful. A standard foreign exchange fee ranges from 1% to 3% per transaction, which means every time you swipe your debit or credit card as you travel the world, you’ll be paying extra.

Some credit cards have zero foreign exchange fees. This is an ideal setup as it will make all of your charges more affordable as long as you pay your balance off by the end of the statement cycle to avoid interest charges.

Additional benefits from some card providers include:

• Automatic insurance coverage on most vehicle rentals.
• Free Global Entry or TSA Pre-check at the airport.
• Trip cancellation and interruption protection under select circumstances.

Use credit cards wisely to get free flights and hotel rooms

Travel hacking is another way to save on retirement vacations. Many credit cards have introductory offers that reward you for spending. Let’s say they’ll give you 50,000 airline miles or hotel points for spending $3,000 on your card in the first 3 months. That might equate to a free airline ticket or hotel stay.

Make sure you can pay your balance in full each month to avoid interest. Otherwise, travel hacking could end up being more expensive than paying with cash from the start.

Take part in the sharing economy

The sharing economy isn’t just for millennials; Baby Boomers and Gen X are increasingly taking part, too.

While it’s true that some services–like Airbnb and ridesharing apps–have become less competitive in recent years in terms of price, there are still certain apps and services that can save you money on your retirement vacation. You can find apps that give you access to:

• Pet-sitting gigs–Get free accommodations while taking care of someone’s cat or dog while they’re out of town.
• House-swapping arrangements–Home exchange apps provide options for simple swaps or more elaborate arrangements, allowing you to list your home for free accommodation elsewhere when you travel.
• Car rentals from individuals–Ordering an Uber can be just as expensive as hailing a taxi in many parts of the world. But some apps, like Turo, allow you to fully rent a car from an individual rather than a traditional rental agency. These apps can sometimes save you money.

Pick a destination with affordable public transportation

Many major cities boast excellent, readily available public transportation, eliminating the need for taxis or rental cars. Public transportation options sometimes have discounted rates for seniors, too, though you’ll want to check if you qualify as a tourist.

Your retirement vacation can be affordable

With some thinking ahead, you can plan your way to an affordable retirement vacation – especially if you’ve done enough saving and investing in your earlier years to build multiple streams of income in retirement.

Just beginning your retirement planning journey? Read more about the best time to start retirement planning.

FAQs

Q1: At what age do most seniors stop traveling?

Travel during retirement can enrich your life, but it often hinges on mobility, health, and financial considerations. Typically, travel frequency may decrease as individuals reach their late 70s or 80s, but this varies widely among individuals. Many seniors travel extensively into their 80s and beyond, if their health and adventurous spirit allow. Before you set off, consider your retirement income and health needs to create a travel plan that suits your lifestyle.

Q2: Is it easy for retirees to get visas for long-term international travel?

Securing a longer-term visa after age 50 can be challenging, as many countries impose stricter regulations. Age often affects visa eligibility, making it crucial for older travelers to explore alternative options like investment-based residency. Some countries offer residency through significant investments in their economy or real estate market. Tourist visas rarely have age restrictions, offering a flexible travel option. However, these visas typically last between three months to a year, allowing you to travel from country to country as each visa expires. If you’re considering long-term travel, research visa requirements and consider consulting with an immigration expert to plan your journey effectively.

Q3: What are the golden rules for travel during retirement?

Besides budgeting, remember these tips for enjoyable retirement travel: take your time (you can and should avoid exhaustion!), rise early to beat the crowds, and don’t put off trips–do them now! The longer you put off traveling in retirement, the less likely it will happen.

Disclosure:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

Not all Mutual of Omaha agents are registered representatives or financial advisors.

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