How to Budget for Travel in Retirement

travel in retirement

A lot of people anticipate that their retirement years will be a great time to travel. With more freedom and less time constraints, retirees can spend their days seeing the places they have always wanted to see. On the other hand, it can be hard to see the world on a fixed income. Luckily, jet-setting during your golden years is very possible if you take steps before retirement to budget appropriately for it.

First, you’ll need to be able to answer this question: What are your travel goals?

A budget for one yearly vacation is going to be very different from a budget for extended, more frequent travel to many different areas of the world. This is why it is crucial to determine what your travel goals are. Doing so will help you to plan accordingly. Make a list of places you want to see and get an estimate for how much it will cost to travel to each place.

In planning your retirement travel goals, you’ll need to make sure you don’t leave out any important travel costs. Remember to research costs for:

  • Flight tickets
  • Car rentals
  • Train tickets
  • Taxis/buses/subway fare
  • Dining
  • Tipping
  • Lodging
  • Sightseeing (guided tours, etc)
  • Travel gear
  • Souvenirs/other purchases

It’s a good idea to talk to other retirees who also have the “traveling bug” to see what their recommendations are or if they know of any good travel deals.

After you know your travel goals and approximate costs, you can figure this into your retirement plan. Before retirement, this may mean setting aside some of your savings into a travel fund with the goal of reaching a certain specified amount by the time you retire. Typically, it is considered safe to spend 4% or less of your total retirement savings per year without having to worry about running out of money. This 4% should also take into account everyday living expenses like taxes, food, health care and insurance. After retirement, you may continue to receive some kind of monthly income from Social Security, property you own and rent or investment proceeds. Make sure this income is calculated into your budget.

Look over the list of places you want to visit and put them in a list in order of priority. Next, create a timeline for your travels. This will not only give you concrete things to look forward to, but will help you figure out how much money you will be putting towards travel and when. This can give you a better idea of how travel will fit into your yearly budget. Maybe you will skip traveling a few years in a row to go on a dream trip. You may find your budget in retirement changes year to year depending on your travel plans. Be aware of the impact travel will have on your budget and plan accordingly. Maybe this will mean moving into a smaller house, eliminating a second vehicle, or even just spending less money eating out or on other unnecessary “luxury” activities.

During retirement, it is important to make every dollar count. Thankfully, with less time constraints, it is easier for retirees to stretch a dollar. Scheduling a trip during the off season is a great way to lower your overall cost. Take the time to watch airline deals online with sites like Expedia and Fly.com. Flexibility with when you travel (which will be possible in retirement) will allow you to take trips when they are most cost-effective. The longer you stay in one hotel, the more likely it is that you can negotiate a lower lodging rate. Combining long trips into one big trip can help you save on airfare.


Remember to always look for any senior travel discounts and do not be afraid to take advantage of every single one!


As with any kind of budget, you’re never going to be able to perfectly calculate exactly how much everything will be ahead of time. This is why one of the most important aspects of travel budgeting is leaving yourself a buffer. Spur-of-the-moment excursions, taxis, tips for staff and meals can sometimes exceed your planned allowance. A buffer will cover these extra expenses so you aren’t caught unprepared. Going with this rule, it is a good idea to get travel insurance. While it will make your trip slightly more expensive, it can save you big later if your travels are disrupted or a health issue forces you to cancel your trip.

Traveling can be a rewarding opportunity to have meaningful experiences in your golden years. If you are still preparing for retirement, now is the ideal time to assess where you are in achieving your retirement goals. Don’t let poor budgeting hold you back from living your retirement dreams!

Budgeting in Retirement: Living Well in Your Golden Years

budgeting in retirement

Having a well thought-out budget is the best way to start your retirement on the right foot. Retirees must plan to have a form of steady income and create a budget that fits their expected lifestyle. In retirement, financial priorities will change with your changing lifestyle. It can sometimes be hard to determine what kind of retirement budget is realistic until you have entered retirement. While some people overestimate their expenses in retirement, some people struggle to adapt to life on a fixed income. For these reasons, it is a good idea to revisit your budget several times a year.

Retirement involves a lot of big changes, but one of the biggest changes is how most people get paid. Instead of receiving a weekly or biweekly paycheck, retirees typically rely on income that pays out once a month. On top of this, many people find their monthly income reduced in retirement. It can be a big mental shift for people entering retirement to suddenly adjust to all of these changes. Sometimes the best way to adjust your budget in retirement is to go back to basics. Here is how you can take one month to monitor and analyze your retirement budget:

Throughout the month, keep all receipts, payment confirmations, and a tally of any cash spent. It is best to record these expenses daily so you do not accidentally leave something out. Use a spreadsheet, notebook, or app to track your expenses. In tracking spending for a month, you can get a good idea of where your money is going. At the end of the month, sort your expenses into categories: groceries, dining out, entertainment, phone, utilities, housing, insurance, transportation, etc. Be sure to factor in irregular expenses like holidays and birthdays. Your expenses in December are likely to be a lot different than your expenses in June, for instance.

Next, analyze the results. This analysis is meant to be a realistic assessment of your lifestyle as it relates to your spending and income. Where is your money going each month? If your monthly budget was based on your pre-retirement lifestyle, you may see some significant differences between your expected spending and your actual expenses. Maybe you spend less on transportation and entertainment, but you spend more on eating out and medical expenses. Pay attention to these shifts in spending and make sure you are adjusting your budget accordingly.

After you have identified the trends in your spending, figure out where you can cut expenses. Determine which expenses are needs (like bills, housing, transportation, etc.) and which expenses are wants (like entertainment, hobbies, and gifts). In retirement, your “needs” may change. While you may have needed two cars when you and your spouse were working, is this still a necessary expense? Are you eligible for discounts to your cell phone or insurance plan? While you want to make sure you cover your essential expenses first, finding ways to make cuts to necessary spending will give you more financial freedom in general.

Finally, it’s time to put all these insights into your finances to create a new plan for your budget. Identify five goals that make sense for your income and expected expenses. Goals help you align your budget with the intention of getting the most out of your income. Make your goals specific and give yourself deadlines. Find ways to keep yourself accountable. Sign up for auto-pay, use an envelope system to categorize your spending, or get your spouse or partner to join you in your strides to reach your goals. A budget is only as good as your ability to stick with it!

You can do this financial check-in every six months or whenever your budget seems to be spread too thin. Sticking to a budget will help you feel more secure and relaxed so you can enjoy your golden years. Get your finances back on track by taking a fresh look at your retirement budget as we move toward the New Year!