Could you travel the world in retirement? It’s a daydream that’s crossed just about everyone’s mind at one point or another—quit work, sell the house, pack a suitcase, and head out into a life of travel. But what if you turned that daydream into your retirement reality?
Here's a look at what it takes to spend retirement not relaxing at home, but discovering a whole new world through travel. Use these steps to think through what this kind of life transformation would truly be like and how well it fits your personality and your reality.
- Before you just set off, be honest with yourself about your love of being on the road, your obligations to others, and the state of your health.
- Traveling can be expensive, so look carefully at your retirement savings and ways to stretch your budget or make adjustments—such as selling your home and downsizing.
- Less expensive travel opportunities include volunteering, swapping houses, or working as you move from place to place.
Determine Whether You're Really Ready
There’s a lot of planning involved before embarking on a life of travel, and that planning starts with an honest assessment of your readiness for this kind of life. While there are no right or wrong answers, you need to ask yourself the following questions:
Do you really love to travel—or just take vacations?
It may seem obvious, but there’s a big difference between a week-long vacation and a life based in travel. Do you like packing, flying, finding shelter, and all the other inconveniences involved with traveling? Or is a week or so on vacation enough to satisfy you? Are you willing to “rough it” if that’s what it takes to afford extended travel?
Do you have obligations that require you at home?
If you are caring for elderly parents, disabled children, or grandchildren, you will probably find it very difficult to hit the road indefinitely.
How’s your health?
While you don’t need to be in perfect health for a life of travel, you do need to be in good enough health to cope with the stress of life on the road. If you have a serious or chronic health issue, check with your doctor before making long-term travel plans. Because Medicare does not cover health expenses incurred outside the United States, you’ll need travel insurance to cover any medical emergency.
Look at Your Financial Situation
World travel does not come cheap—one week-long international trip can cost $5,000 or more for two people. If you’re planning on staying abroad considerably longer than that, you’ll need to take steps to prepare financially. Extensive travel requires a healthy nest egg, but the exact amount depends a great deal on your expectations.
If you want to stay in upscale hotels throughout Europe or North America, you’ll need a hefty bank account before heading out. If you are willing to stay in modest accommodations—hostels, inexpensive motels, rented apartments, or campgrounds—you can travel quite inexpensively. Visiting countries in the developing world is another way to save big—in many places, you can travel on just a few dollars per day.
Whether you plan on several big trips a year, or a more permanent life on the road, your itinerary needs to start with an honest look at all of your retirement savings, including money in the bank, investments, Social Security, pensions, and any income from rentals or businesses.
If you haven't set up your retirement savings and investing plan to accommodate frequent or full-time travel, you'll need to seriously reexamine your retirement income plan. Once you know what you have to work with, you’ll be able to assess how much you can budget for daily expenses while traveling. A good financial consultant can help you analyze your investments to identify problems or any potential for improvement.
If you are taking a major plunge, such as heading out for a year or more on the road, it’s time to consider the ultimate in downsizing—selling your home and the majority of your possessions to finance your excursions. This is not a decision to make lightly, take at least several months to investigate all the details involved, speak with your family and friends, and consult with your financial advisor. Another option is renting out your house while you travel, which is a good option if you want to return home eventually. Otherwise, one thing you'll need to determine is a permanent address for receiving mail and such, while you are on the road.
The decision to spend your retirement traveling isn't one to take lightly. Be sure to give yourself time to consider every angle before you take the plunge.
Consider Budget-Friendly Retirement Travel
While flying first-class to a luxury hotel is certainly enjoyable, it isn’t normally part of a travel-based retirement. Instead, look for options that keep your budget under control. Along with choosing destinations that are known for their low cost of living and staying in inexpensive lodgings, you can cut costs in many other ways.
Try a repositioning cruise
Cruise lines offer these discount trips when they need to move a ship from one port to another, usually during the off-season. Unlike typical cruises, the ship will not return to the port of origin but will stop at several ports on the way to the end destination. (Some people even go on to retire on cruise ships, at least for some period of their lives.)
If you want to do good while seeing the world, consider a volunteer vacation. Options range from two years in the Peace Corps to a few days spent working in the fields of an organic farm, and just about everything in between. Generally, you’ll pay a set price that covers your food and lodging during the volunteer stint, usually much less than the trip would cost otherwise. There are volunteer vacation opportunities all over the world.
Work as you go
You can replenish your bank account by working during your travels. Teaching English abroad, writing a blog or book based on your experiences, working as a virtual assistant or other online jobs, and starting a small import/export business are all possibilities.
If you aren’t selling your home, put it to work supporting your travels. The typical house swap involves you and another homeowner moving into each other’s house for a stated period of time. It’s a great way to vacation abroad if you want to stay a week or more in one location. Sites like International Vacation Home Exchange make it easy to find an available home and provide safety measures for your peace of mind.
Cover the cost of your lodgings by house sitting for a family that is doing some traveling of their own. In return for staying in the home for free, you might be expected to take care of pets, water plants, or perform simple maintenance. Check out TrustedHousesitters.com to get a feel for house-sitting jobs around the world.
The Bottom Line
While some retirees are happy to spend time relaxing at home and visiting with friends and family, others long for a more adventurous lifestyle. If you fall into this category, and you’ve always dreamed of seeing the world, a retirement spent circling the globe might be the answer to your dreams. You might even retire abroad for some of that period, perhaps in several different countries over time.
Before selling your possessions and buying a plane ticket, you’ll need to take an honest assessment of your financial situation, your travel goals, and your daily budget. Have a talk with your financial advisor early in the decision-making process so you’re clear on the best way to maximize your money. Bon voyage!