Calculating Your Retirement Travel Budget by Extrapolating from Mine

Many people want to do more traveling when they retire. In fact, travel is one of the main reasons stated for wanting to retire. Unfortunately, most people are not sure how travel will affect their retirement budget. Knowing this number is a key variable in calculating when you have enough saved to retire in the manner you desire. It helps establish the finish line.

The amount of travel you do after retirement will vary greatly among retirees as well as the type of travel and how lavish you like to live on the road. Since I have now been retired/repurposed for more than three years, I thought a look at my actual retirement travel experience and expenses would be helpful in your quest to establish a finish line for your retirement savings. 

You may not travel the same way I do, but you can take my situation and use it to make an extrapolation to your situation. First, let’s look at how I travel, then we can compare a before retirement and after retirement snapshot of my expenses.

How we travel

There are three major travel categories that my wife and I tend to use. First, we own a timeshare. We purchased this almost three decades ago and have used it a lot. I did not include the original purchase price of the timeshare as it is irrelevant to my retirement expenses. 

The second category is our motorhome. We also have been motor homing for nearly three decades. I have included all the upkeep expenses of the motorhome in addition to the travel expenses, but not the purchase price, which we paid for in cash and doesn’t represent an ongoing expense. 

The third major category is cruising. We have taken lots of cruises; the longest one was 31 days. We have utilized both river and ocean cruises. Each day on a river cruise costs about twice the daily ocean cruise cost. 

2012 and 2013 were the last two years I worked in my private practice of 20 years. The following three years I worked part time doing locums in small towns nearby. Since we were traveling a lot doing locums, I will not use those years to compare as it will complicate things. During my working years, I took more vacation than the average physician utilizing 8-12 weeks off each year as a general surgeon.

In 2012, we spent 15 days in timeshares, 49 days in the motorhome, no cruise days, and 17 days using other methods of vacationing which totals 81 days.

In 2013, there was 21 days timesharing, 8 days in the motorhome, 14 days on a cruise ship and 42 days of other travel, which included a month in France and Italy utilizing two bus tours. These total 85 days during the year.

What it costs

Our traveling expenses during these last two years of work, when both kids were away in college, averaged $22,087 per year. That is about $266 a day in 2013 dollars. I think this cost per day number will serve as a good baseline to compare how our traveling expense changed after we retired. 

Looking at our last full year of travel, 2019, which was also my third year in retirement, we did the following: Timeshare was 21 days, the motorhome was 78 days (first year snow birding), we went on 29 days of cruises, we walked across Spain on the Camino de Santiago as part of 51 days in Europe, and we did 34 other days of travel. These total 213 days on the road which works out to about 58% of the year. That year we spent $65,313 on travel which is almost three times our pre-retirement travel budget. 

During the first three years of retirement I noticed the amount and cost of traveling has increased each year. In 2017 we spent $35,215, in 2018 we spent $49,243, before topping off at $65,313 last year. That final year averages about $306 a day in 2019 dollars. That covers all our lodging, transportation, food and entertainment expenses.

Our spending on retirement travel averaged $49,922 over the first three years of retirement which is a little over double our pre-retirement number. I think initially we were a bit more cautious about vacation spending as we didn’t really know what retirement would be like financially. Then each successive year we have increased our travel as we became more comfortable with how much we have available to spend while making sure we don’t run out of money before we run out of life.

By the third year of retirement, our total number of days traveled has almost tripled, while the expenses have also tripled compared to vacationing during my working years. 

Apply it to your situation

I think you can take a look at what you are doing during your working years and compare that to my working years. How many days do you travel and how much do you spend? Then look at what you think you might do differently when you are retired in order to come up with a retirement travel budget. 

My daily travel expenses did not change greatly during retirement, and taking inflation into account, I suspect my spending habits were about the same in both eras. Will you take the same type of vacations you were taking when you worked? It looks like I did. It seems the only variables that matter are the number of days traveled and a factor for inflation. 

I think it is important to note that we took our kids with us on a few of those trips when I was still working and they were in college. We also took our kids on some of the trips in our retirement years. We paid for everyone in both eras. 

If you look at your current average daily travel expense (total travel expenses/number of travel days) you can likely multiply that by your expected number of retirement travel days to get a reasonable estimate of your retirement travel budget. 

Hope that helps. If you want a closer look at what we do when vacationing, you can also read my article on living the FatFIRE life. 

So, what do you anticipate your retirement travel will look like? Will you spend more or less per day? How many days a year will you be away from home? Are you planning to travel on a shoestring, lavish, or comfortable budget? 

For us we really don’t travel any differently than when I was working, we simply travel more days per year and the trips are longer. When this pandemic travel restrictions come to an end, we are looking forward to resuming our travel schedule.