Budget For Extended Travel in Retirement
In an informal survey I’ve taken, it’s clear that most of us have dreams of traveling. It sounds exciting, and when we get to that point in our lives where we don’t have to work, we might have an extended trip on our radar. One of the key matters to consider is budgeting to make it happen. If you will be gone for more than your standard weekend getaway or a week-long trip to Arizona, you will want to consider more than just your transportation, housing, and food. Let’s consider some of these things together so you feel confident chasing that travel dream.
What Do We Mean by Extended Travel?
Any travel you intend to take that is longer than two weeks is extended in my mind, but it’s not uncommon for extended travel to last six weeks or longer. Trust me, if you’re going to South Asia, you don’t want to be gone for ten days. That area of the world can hold a bucket list big enough to sustain you through the Gobi Desert plus, with the time zone changes and moving between cities; you want to have enough time to enjoy yourself or immerse yourself more in the culture. You could be going because you want to give back to a community you feel called to serve, and spending more time will help you build relationships. The sky is the limit for possibilities, so let the possibilities you consider run wild.
Challenges That Aren’t Dollars
Certainly, being gone longer than normal has its hurdles. Navigating other cultures can seem like a hassle with language barriers and cultural differences. Technology isn’t always available like you’re used to (I’m talking toilet technology too). Then there’s aging bodies and general health. Sometimes you and your partner have different ideas about the possibilities because one of you is a homebody or one of you isn’t in as good a shape. Have honest conversations about these matters. Lastly, funding said travel dream might be a challenge for you, but I think we can give you some great ideas for approaching planning.
Travel Possibilities to Spur Your Mind
Before we talk budget, though, consider a few options for your travel. If you’re a go-getter and like to plan things yourself, pick up a guidebook from a bookstore to help you dream possibilities. It’s kind of like picking up the latest Southern Living magazine. Just make sure you get the current edition, or you might find prices have changed or that cool roadside café is no longer open! The best books are filled with suggestions and basic pricing to help you with your spending plan.
You could also use an upscale travel service and travel with a group to give you a pre-planned itinerary and concierge service throughout. Easy-peasy, but pricy. And then there’s the Missions route which might be something you value more and typically isn’t as expensive. Do you have a favorite cause that hosts individuals or groups to partner directly with them in the work? Engaging at that level with other people can be a rewarding and unique experience.
Why You Need a Budget
On to most people’s favorite (not) topic, The Budget. A budget is simply a spending plan. It gives you permission to spend! You also see the realistic nature of your dream, which helps you be truthful about what you can and can’t do. The budget may show you where you must sacrifice to do what you envision. Maybe you skip gift-giving for Christmas or delay that renovation project another year or two. There could be trade-offs, but at least you can choose with your eyes wide open.
Travel Budget Foundations
First, start formulating your spending plan (a.k.a the budget) early. It doesn’t matter if you plan to go before retirement, in retirement, or when you’re 25. Second, extending travel can be less costly because you aren’t taking flights halfway around the world over several shorter trips over more years. Instead, you’re bunching your destinations. Plus, you’ll probably find discounts the more nights you stay in a location. Third, pick a season that doesn’t cost you 3x of another season. I had personally considered going to Grand Cayman and staying in an Airbnb for a week in early December. It was about $1,500 per person at that time. We didn’t take that trip, and the cost had tripled when I checked into going on the same trip in March of the next year!
Finally, you’ll need to plan for access to money. When I used to travel outside the US regularly, we’d take a boatload of Traveler’s checks, presenting their own headaches. Now, paying with a debit or credit card or getting cash from an ATM is the way to go. Just be sure to consider exchange rates, get a money belt to wear under your clothes, and contact your bank to let them know you’ll be entering your PIN in Dubai or wherever your dream takes you.
Creating the Spending Plan
We’ll break your budget into two main parts: funding and pricing the trip. I like to think about what resources are available before considering how much my dream costs.
Is there a Pirate’s Treasure Buried in the Backyard?
One set of options is that you could rent your home or even do a house swap with someone in a far-off land. Yeah, that’s a thing. You may have some untapped savings or investments that have appreciated over the past year. How about dedicating that December dividend payment to next year’s trip? If you were already thinking of downsizing, maybe some of the proceeds from the sale of your home could be set aside. Cut down on unnecessary expenses and prioritize your travel goals to find additional pirate booty.
Some people like to work while they travel, and with the expansion of the remote work movement, that might be a nice setup for you, especially if your work has some flexibility for when the job gets done. Hey, if you’re in India 12 ½ hours ahead of much of the US, you might even still make that Teams call. You might even find an option to teach English as a second language and get paid. And don’t think these remote work options are unavailable just because you’re retired. Imagine sitting out on the patio of the place you rented in Barcelona while you help a small business with its books from afar. That’s a possibility that we didn’t have a decade ago.
My favorite option is the extra side hustle at home before you go. Almost anyone can turn on the gas for a couple of months and crank out a few thousand dollars doing something extra, even if it is working evenings at Chico’s.
Lodging and Airplanes and Visas, Oh My!
When you start to investigate costs, begin with who will be going on the trip. Will it be just the two of you, or will children and grandchildren join you for part of it? Lodging costs range from hundreds of dollars a night in Reykjavik to $10/night if you want to stay at Ajay Guest House in New Delhi, India’s Pahar Gang main bazaar, and the number of people impacts your options and costs. Travel costs can vary from year to year. I remember taking a trip to India, and the tickets were $1,600 a person. Another time, the flight was only $850! Hunt for deals by using a travel expert.
Another way extended travel minimizes travel costs is that you can make your way to a region of the world and, without returning all the way home, make smaller travel jumps to other spots in the region, making the overall expense less. For example, it’s much cheaper to fly to China and see Japan, Thailand, and Singapore before coming back vs. traveling back and forth to the US between each location in different years. That means you will need to take more time away from home, but that’s what we mean by extended travel, right?
You also need to consider travel within a country. Again, I’ll return to my India example because I’m so familiar with travel in that country. You could take a plane from city to city, but if you take the train in the SL class, you’ll pay only a few bucks and be treated to the cultural experience of dust, sunrays, and water (from any rain pouring in the open barred window) as well as the hawkers selling chai and tiffin. Really fun!
Satisfying Your Tastebuds
Food costs will depend greatly on your choices. Will you be a restauranteur or choose a resort with an all-day, all-you-can-eat buffet for several weeks? Or, will you have an Airbnb with a kitchen where you plan to cook most of your meals while shopping at the local market? You’ll save boku bucks the more you make your own meals.
Ventures Galore
Planning activities is another area of your budget to address. As with other items, activities can range from expensive to free. Jet skiing through coastal waterways while stopping for snorkeling and lunch will cost you a pretty penny. A gently sloping hike in a public preserve that has no fee, not so much. It’s true too that if you make your travel activities mimic how you live day to day at home, but just in a different place, you can avoid tourist traps and immerse yourself in another world culture and maybe make some new friends. Have you ever thought about getting your shirts ironed at the local tailor’s shop? That relational, cultural experience is one of the most satisfying extended travel plans you can have.
What am I Forgetting?
Traveling overseas brings extended travel budget items you don’t have to consider when staying at your sister’s place in Scottsdale for a month while they are away. You’ll need to account for getting your passports in order, applying and paying for visas, and obtaining any necessary vaccinations (Malaria, Heb B, Dengue, etc.) for the places you will go. While you’re at it, make sure you take photocopies of your passport and birth certificates with you in case you lose your documents. I was leading a mission trip with 20 students to various places in India when we discovered that a student had misplaced their passport! Because we had the photocopies, it was more convenient to travel back to the capital, have an emergency US embassy appointment, and visit the Indian consular affairs office to get the proper exit visa. What would we have done without those backup copies?
Expect the Unexpected
Finally, always budget for the unexpected. That means having an emergency fund (just like you have already, right?). Expect the unexpected. Second, use travel insurance. This can protect you if you have an injury or illness and need expedited evac or if violence breaks out. I was in Morocco expecting to stay for five weeks in 2001 when the US started bombing Afghanistan in response to 9/11. Our organization thought it was imperative that we left the country immediately, and we had a plan!
What Happens While You’re Gone?
Back on the ranch, you might need to find someone to take Fido and get your mail. You won’t be happy with Fido’s results otherwise. I recommend having someone get the mail at least every other day so it’s not obvious you’re gone. Having someone check your home occasionally during your away time is a good idea.
How about your finances? Consider how your bill payments will occur and how you’ll meet important dates like tax filing deadlines. (Don’t let Tax Day stop you from adventures. Plan ahead.) Having online access to your finances and bill pay sites will make that a breeze if you get used to it before you leave. Just be careful in sketchy travel locations that you practice safe internet surfing. Speaking of internet surfing while you’re gone, I recommend waiting until after you return to show off your exploits on social media. It’s better that Joe from down the block still thinks you are home.
Remember, too, if you are on Medicare, most plans don’t cover overseas health care, so have a plan about where you will go and how it will be covered. Further, don’t discount the impact of jet lag on your health and that it can take the skip out of your step for a few days. You don’t have to feel urgent about knocking items off your activity wish list because, with this extended travel, you don’t have to be in a hurry. Finally, my motto for extended travel is “Everything is Subject to Change.” Remember that and go with the flow.
How We Can Assist
We can help you discover the options for funding your trip with our full-service financial planning. We’ll help you see the impact of your choice today on your other financial goals for tomorrow. Schedule an appointment with us. We’re available to meet whenever you want to pursue a goal. Oh, the places you’ll go!
Travel Resources
Travelers – United States Department of State
This commentary reflects the personal opinions, viewpoints, and analyses of The Dala Group, LLC employees providing such comments. It should not be regarded as a description of advisory services provided by The Dala Group, LLC or performance returns of any The Dala Group, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The Dala Group, LLC manages its clients’ accounts using various investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
