The traditional picture of what it looks like to be retired in America is rapidly evolving from one of declining health and increasing inactivity to one of new ideas, new challenges and new frontiers to be conquered. Modern medical advances have allowed a much larger segment of the senior population to remain healthy well into their seventies and eighties, and many of these retirees eventually decide to give in to the travel bug and hit the road. More seniors than ever are now selling or renting their homes and hitting the road in campervans, fifth-wheels or other recreational vehicles that allow for extended driving.

According to the Recreation Vehicle Industry Association, approximately 8.9 million U.S. households owned an RV in 2011. This development has created a huge niche market for financial planners.

While the majority of RV travelers tend to be older and more affluent, this is not always the case. There is a growing segment of younger travelers as well - in fact, according to the Recreation Vehicle Industry Association, the number of RV owners under age 35 has been rising by roughly 5% yearly. And not all travelers are necessarily affluent or wealthy. Many that go over the road either work from a laptop computer or else find temporary work at each destination.

SEE: Save Money - Travel For A Living

A New Target Market
Although the demographics show not all RV owners are affluent, being able to afford an RV suggests a certain level of disposable income. This makes the RV set a prime target for financial advisors. In fact, there is a comfortable niche market available for those who are experienced in dealing with the unique set of needs faced by travelers.

Some of the needs that planners must be able help clients meet are:

  • Budgeting: A budget that factors in RV insurance and fuel costs (which may be astronomical) is a must for long-term or year-round travelers.
  • Housing issues: Long-term travelers need to determine whether their house should be sold, kept or rented out.
  • Safekeeping: Protecting important documents and heirlooms is an important issue for this group.
  • Health insurance: Advisors need to make certain that a client's policy will be in force wherever the client travels.
  • Practical issues: Is the client visually and physically capable of an over-the-road lifestyle? What type, size and age of RV is appropriate and affordable for this client?
  • Income: Many clients will need a relatively safe source of income to depend on while they're on the road. Will their portfolio be able to sustain them?
  • Part-time work: Is there any kind of work that retired clients could do from a laptop computer or at each destination? Will this be a necessary part of their plan?
  • Comprehensive RV insurance: Advisors can ensure that their clients are properly covered, as inadequate coverage here could obviously result in disaster.

Financial Issues
These issues will take some time and planning to adequately prepare for. The budget issue is probably one of the most straightforward issues to consider. If the clients have planned well, then food, fuel and all pertinent insurance coverage plus a reasonable spending allowance may be all that is required. However, if a client decides to retain a home, or must still make payments on the RV, those things must be factored in as well.

SEE: 5 Ways To Stretch Your Retirement Budget

The nature of the budget will obviously be somewhat dependent on the client's portfolio and the amount of risk that can be taken. Most clients that opt for this lifestyle will need some income they can depend on, which translates into fixed-income investments such as laddered certificates of deposit, U.S. government securities, fixed annuities or other similar instruments. Therefore, this type of lifestyle is appropriate for those with an adequate asset base for such income generation, and those who do not measure up in this respect would be advised to seriously consider either postponing or modifying their traveling goals.

What clients should do with their houses is also a major issue that will impact both budget and portfolio. This decision can determine whether over-the-road travel is a plausible alternative for some clients, who may not have sufficient assets to generate adequate income without the sale of their house. Other more fortunate clients may be able to get away with merely renting their residences to trusted tenants, who may also be willing to continue receiving clients' mail and provide other services of convenience, such as home maintenance or other such amenities. But either rental income and expenses or sale proceeds must be factored in to any comprehensive financial plan for traveling clients - unless, of course, they are well off enough to keep their homes without needing to consider either of these alternatives. Factoring in the cost of buying another RV in the future may also be a critical point to consider for those whose travel aspirations could last for more than five years.

As stated previously, it is absolutely necessary for traveling seniors to ensure that their health insurance (and all other types of coverage as well) is valid wherever they decide to go. This may necessitate transferring various types of coverage to national carriers that are registered in all states, or at least in the states that clients will be inclined to visit. If any major type of coverage, such as life, health, long-term care or even RV insurance is not in force when it is required, the results can be disastrous not only for clients but also for their heirs. Purchasing emergency medical evacuation services may be a good idea for clients with health issues, and this service can include the return of the RV to a designated place as well. In most cases, the RV itself should probably be covered with a cost of replacement policy. This coverage can generally only be purchased on a new RV and will stay in force for five years. But this coverage is vitally necessary for those who have no other home to return to.

SEE: Add-On Insurance: Do You Need It?

In general, clients who choose to wander the country tend to be fairly good planners themselves, lessening the burden of planners at least in some respects. But the aforementioned issues must be adequately addressed one way or another in order for clients to enjoy a trouble-free life on the road.

Related Articles
  1. Home & Auto

    Make This The Year You Get Vacation Insurance

    With a few simple policy additions you can protect your holiday plans from being ruined.
  2. Retirement

    In Retirement, Snowbirds Leave Cold Weather Behind

    Rather than shivering away their golden years, retirees can fly south to winter in sunny locales.
  3. Budgeting

    Globetrotting On A Budget

    Don't let a shoestring budget trip-up your vacation plans.
  4. Investing

    What a Family Tradition Taught Me About Investing

    We share some lessons from friends and family on saving money and planning for retirement.
  5. Professionals

    The Best Financial Modeling Courses for Investment Bankers

    Obtain information, both general and comparative, about the best available financial modeling courses for individuals pursuing a career in investment banking.
  6. Professionals

    Top Tips for Improving Client Communications

    Effective communication with your clients is the lifeblood of your financial advisory business. If you've struggled in this area, pay heed to these tips.
  7. Investing Basics

    Do You Need More Than One Financial Advisor?

    Using more than one financial advisor for money management has its pros and cons.
  8. Personal Finance

    How Tech Can Help with 3 Behavioral Finance Biases

    Even if you’re a finance or statistics expert, you’re not immune to common decision-making mistakes that can negatively impact your finances.
  9. FA

    Paying for College: Utilize These Top Hacks

    Saving money for college is difficult for many families, but it doesn't have to be. Here are some overlooked hacks to save money on college costs.
  10. Financial Advisors

    How to Help Plan Sponsors Meet Fiduciary Duties

    Advising 401(k) plan sponsors is a great business model for financial advisors. Here's how advisors can help plan sponsors meet fiduciary obligations.
  1. Do financial advisors charge VATs?

    The Personal Finance Society (PFS) and with Her Majesty's Revenue and Customs (HMRC) have outlined when a value-added tax ... Read Full Answer >>
  2. How do financial advisors execute trades?

    Today, almost every investor invests through online brokerage accounts. Investors often believe that their trades are directly ... Read Full Answer >>
  3. How do financial advisors help you avoid escheatment?

    Financial advisors can help you avoid the escheatment of your financial assets by regularly reviewing all of your accounts, ... Read Full Answer >>
  4. Why do financial advisors dislike target-date funds?

    Financial advisors dislike target-date funds because these funds tend to charge high fees and have limited histories. It ... Read Full Answer >>
  5. How often do financial advisors have to travel?

    The frequency with which a financial advisor needs to travel varies according to numerous factors, such as the size and location ... Read Full Answer >>
  6. What licenses does a hedge fund manager need to have?

    A hedge fund manager does not necessarily need any specific license to operate a fund, but depending on the type of investments ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  3. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  4. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  5. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  6. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
Trading Center