How to budget for traveling during retirement

Retirement is prime travel—you’ll certainly have the time. The money, however, might be not be there. No matter if it’s a road trip or a European trip, the average retiree spends about $11,000 on travel.

How much will you need to save for retirement?

The short answer here is: it depends. A longer (and more satisfying) answer comes in the form of age-based benchmarks: when you’re younger and in your 30s—an age when most people begin to consider their retirement—you save half of your pre-tax income towards retirement, and every five years, this benchmark increases exponentially. When you’re 35, you save 1-to-1.5 times your income, when you’re 40, you save 1.5-to-2 times your income, etc. As your salary increases with age—at an average of 2% per year—this benchmark will come into play, alongside such sources of retirement funding like a 401(k), IRA, pension, or stock options.

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After retirement, a vacation becomes just one of the many financial goals on your plate, competing against such expenses as home repair, medical care, and day-to-day living. The lure of a getaway can also act as a motivator to limit your spending in other areas.

Create a budget worksheet

A budget worksheet will keep your financial goals organized even 10 or 20 years down the line. At a glimpse, you can see how much you earn per year, how much you’re spending per month, and what your investment returns are. Offering you a financial projection that will predict your returns even decades from now. Excel allows you to set up equations that will calculate your spending vs. savings, alongside factors like interest, inflation, and cost-of-living changes. From there, you can adjust the numbers to see if you’re on track to reach your dream destination!

This Excel budget template is specifically tailored for retirement planning, and not only does it eliminate the need for complicated math, but it automatically arranges your financial data in chart form so you can visualize the money you’ll have years from now, even factoring in economic uncertainty.

Check exchange rates

The stronger the US dollar, the more you’ll be able to buy when abroad. Excel’s Currencies data type calculates exchange rates between currencies all over the world, while showing you the current price between the dollar and the Euro, Yen, etc. Exchange rates are calculated via the US Dollar Index, and rates are fluctuating all the time: if you can take advantage of a time when the dollar is strong, you’ll have more spending power. You can buy foreign currency at a financial institution, well in advance of your travel, as a bulwark against fluctuating exchange rates.

Plan your travel early

You can mitigate the cost of hotels and airfare by booking in advance. Major hotel chains and airlines will announce deals around the year, and thanks to algorithms, predicting when prices will be at their lowest has been turned into a science. (It’s cheaper to fly out on Tuesdays, for example.) Use a flight deals tracker and set up alerts for low fares. Sign up for a hotel rewards program and look out for deals on future stays. Hotel booking sites will feature calendars displaying rates for hotels across the world, which will come in handy.

Pace yourself

Keeping too tight of a schedule can add stress to what should otherwise be a fun experience. The temptation can be there to cram as many sights as possible in a short amount of time—but flights can get cancelled, museums can close unexpectedly, hotel reservations can be mixed up, and worse yet, accidents and hospitalizations can happen. There’s a certain trade-off to trip planning: should you stay longer and incur more hotel costs, or do more activities per day, which may be just as expensive? After all, those museums and theme parks add up.

Building time into your schedule can act as a buffer for the rest of your experience when the unexpected occurs. Plus, embracing the unexpected can lead to some great stories. While it’s a major expense, a dream vacation also comes with so many experiences that just can’t be bought.