Travel is one of the two most popular retirement goals, along with spending more time with family and friends, according to a Transamerica Center for Retirement Studies report released in December 2013. Seventy percent of Americans feel travel is worth saving for, and 47 percent regard it as a necessity rather than a luxury. However, only 18 percent have factored travel into their retirement savings plan. If you want to have enough money available to make your dream vacation come true, start putting these strategies into practice now.
Estimate Your Travel Costs
Start by estimating the cost of the travel you want to do. Create a spreadsheet to itemize your expenses, and then identify potential locations and how long you plan to stay. This gives you a basis for estimating major costs such as transportation and hotel fees, along with additional expenses such as sightseeing and meals. Don't forget to include a souvenir budget and emergency expense fund.
To help estimate your costs, you can consult travel agents and guides, conduct online research or use travel apps. You can also use the online cost calculator for estimating major expenses at TravelMath.com
Set a Savings Goal
Once you have an estimate of your travel costs, you can set a savings goal. To keep your travel plans affordable, this should fit within your overall retirement savings plan. Investment management company Vanguard recommends factoring your retirement travel goals into a bigger picture that considers things like everyday living expenses, health care and projected inflation. You can estimate your retirement savings needs on Vanguard.com
Plan a Budget
With a savings target in sight, you can plan your budget and monthly saving goals accordingly. Financial expert Susan Warren recommends putting 20 percent of your monthly budget toward savings goals, and then split the rest between 50 percent for necessities and 30 percent for discretionary spending. To achieve your travel savings goal, you can either prioritize it as part of your monthly savings budget or periodically devote part of your discretionary fund toward it.
You will have more available to put toward your travel goals if you have low monthly debt obligations for expenses such as loans and credit cards. If you receive regular payments from an annuity or structured settlement, explore whether you would be better off selling your future payments for a lump sum of cash now. You could then use this money to decrease your monthly debt obligations and save more toward your travel goals. You can learn more about selling your future payments at JGWentworthCashNow.com
Create a Savings Account
You can save toward your travel goals faster if you use a smart savings vehicle. Personal finance expert J.D. Roth advocates using online high-yield savings accounts to target saving for particular goals. Another way to save is to obtain a travel credit card. You'll find a recent review of the best travel credit cards at NerdWallet.com
. Many offer free hotel stays, free flights and frequent rewards.