I’m not sure I totally understand the scenario, but as you age your expenses often go down as going out and spending money on trips and things gets less appealing. (I’ve seen this in my father and my in-laws.) So, assuming that you have enough to last you until 90, do it. We’re going to.
Hell yes.
My wife and I are in our mid 40’s and we are already ensuring that we get out and do that stuff now while we are fit enough to fully appreciate it and the kids can experience it as well.
We have a fairly frugal life and our investments and pensions will give us a perfectly comfortable life in our current (unflashy) style. Any discretionary money at the moment is spent on holidays and leisure and as I am a self-employed consultant and my wife a teacher we make the most of those long holidays, why wait?
Scrimping and saving during your most active years to fund a better lifestyle in your twilight years seems a waste to me. We went skiing for four full weeks this year and it was the best money I’ve ever spent. Had I needed to dip into pension funds to do then I would.
Mind you, as we get all our healthcare needs met for free we don’t have that huge area of uncertainty hanging over us and that makes our retirement budget far easier to plan for.
When I had significant pain that I believed warranted an opioid and my doctor was hesitant to prescribe, I pointed out that there were alternate sources readily available. Just an observation.
Everyone starts somewhere! I’m the same way-- I don’t really care where I go, because it’s all interesting to me.
I’d suggest picking up a copy of Rick Steve’s Europe Through the Back Door. It’s less of a guidebook, and more about how to travel. It will tell you everything you need for Europe, and he definitely focuses on how to keep costs down.
The big expenses are plane tickets and lodging. If you can find ways to keep those reasonable, you can travel for not much more than it costs to live at home, assuming you are willing to do things like eat picnic lunches in Paris and save the food budget for a few memorable splurges.
Choose the right countries and it can even be cheaper- $20 a day is a perfectly comfortable travel budget in southwest China if you eat local food and stay at Chinese hotels (and there are some great natural sites there), and I’m guessing $600 a month is manageable.
Of course, everyone wants different things and everyone prioritizes. But extensive travel can be perfectly compatible with a fixed income.
I like getting my opioids paid for by Medicare.
Medicinal weed is available, but I really don’t like smoking. If THC (or whatever) is available in pill form, I’d give it a try.
You’re obviously not using your real name, so you should feel comfortable to talk real numbers here. How much in retirement are we talking about? $300K $1M? The question is important, because often people need to use their SS income plus their savings.
There is a retired couple I know in their 70s. They told me between the both of them, they spend $45K a year. They get SS income, pension and have substantial savings. They didn’t tell me how much but based on a history of our conversations I’d say it’s about $1M. They did tell me they survive on their $45K a year spending just fine, and only go into the savings when it’s needed for something like helping out their kids or getting his wife a luxury item like jewelry for her birthday.
So in this real life example, if they didn’t have the $1M savings I’m estimating, they would just live on the $45K a year and not be able to help their kids out with some expenses or get luxury gifts.
The big question to me is, can you be happy living just on what you get from SS income and/or pension?
The other thing, spending what might be a couple of hundred grand (or more?) over three years is a lot of spending and it might be well and above what you would actually do.
What’s more important, is to take out a sheet of paper and write down what would truly make you happy to do first. Then see how that could become a reality and then see what that costs. My wife and I have done this a number of times, and it’s surprising to find out the cost isn’t anywhere as high as we thought. The key is, what makes you happy, not what someone else thinks you should do.
Similar to your friends I spend about $45,000 a year without really tight budgeting. This leaves me with about $6,000 left over from my income. I could easily nock off another $4,000 in expenditures without much change to my lifestyle.
The amount set aside to use before I die is about $200,000. This was actually set aside to buy a house in the country but I have since changed my mind on that.
If I did decide to burn through it within a 3 or 4 year period I would keep about $50,000 that I wouldn’t touch.
Yesterday I was having one of those days regretting all the things I missed, today it has passed and I am not feeling the same. I do this now and then. It seems so urgent at the moment and then the next day it doesn't seem to matter much. I think I am becomming increasingly aware of my mortality as little things in my body change LOL.
OP, do you have a passport?
You know, because you implied that you know very little about traveling. I didn’t want to jump to the conclusion that you do.
HoneyBadger, as one who has traveled quite a bit (all 6 continents and just finished 30 days in Australia/New Zealand), $6,000 annually can get you (I don’t see mention of a wife) a lot of places. I’m looking at China on that budget, also two back-to-back European cruises (one to Scandinavia, then to Spain/Italy), and a lot of places in the USA.
Check on-line, talk to a travel agent, play around with travelocity or trip adviser, and see what is in the budget. You don’t have to do everything in one year, but set up a plan of what you really want to do, and then see what it will run.
And if you can…go for it! It’s quite an interesting planet out there.
For comparison, I lived quite well in China on maybe $5,000 a year (in this case, to be fair, I wasn’t paying healthcare.) That wasn’t a frugal income- I ate out daily, enjoyed the nightlife, had my own apartment, traveled locally, bought nice clothes and other daily items, and generally had a great time.
A traveler will certainly end up paying more, but not THAT much more. $45,000 a year can go a looooooong ways in the right place.
But bite off small chunks. This isn’t an all or nothing thing. Figure out what travel style you are comfortable for your first trip, get out there, and see if you like it. If you decide it’s all you want to do in life, you’ll probably want to research budget travel. If you decide you want to go on a trip again but aren’t all-consumed by the travel bug, plan on occasional trips. And if it doesn’t suit you, you don’t ever have to do it again.
If advise you to look at a range of travel resources. Travel can cost basically as much or as little as you are willing to spend, and trip costs you see on mainstream travel sites are going to be really different than what you’d see on budget travel sites. Get to know the different options before you decide what is or is not possible.
I just read a blog by a 79 year old who visits 3 different countries every year as an independent budget traveler. My travel has slowed down due to the whole kids’n’mortgage thing, but I keep plotting how to get us back out there.
That is encouraging, I know folks who seem to travel more than would seem possible, a lot to learn.
even sven is right on all counts. I travel very frequently for pleasure (several times a year) and I have a job and fairly young kids. It doesn’t have to cost that much. It can if you only stay at the best hotels, fly 1st class and eat at fancy restaurants every night but those types of things don’t appeal to me much.
You are an admittedly inexperienced traveler. Why don’t you pick one nice but fairly inexpensive and American friendly place and try that first? Costa Rica is fairly to very inexpensive, has world class outdoor activities, is a little exotic but also very American friendly. Thailand is a lot further away but doesn’t have to cost a lot either. Western Europe in general can be very expensive but there are plenty of ways to make it affordable. Eastern Europe still has some really good deals.
One thing that you might find really educational is to sign up for the (free) weekly top 20 deals list from www.travelzoo.com. They are one of the best travel deal aggregators on the web in general but they also send out a very handy customized weekly e-mail of the best deals available for departures from your destination. It only takes a couple of minutes to read and it will give you an idea of what the real costs are. A lot of the packages they highlight are bundles that include airfare, hotel and sometimes much more. Most of them are extremely good deals but occasionally they will have one that is so attractive that I find myself reaching for my credit card before I realize I can’t go during the time that it is offered.
I love to travel but I would never plan to do it for long periods at a stretch. I like a few week-long trips sprinkled throughout the year. You will have to figure out your own preferences but most people would get exhausted and numb if they tried to squeeze a lifetime’s worth of travel into a 3 or 4 year period.
Traveling with a group may be a good way to get your feet wet. Look into Road Scholar. Even though I’m far from retirement age, I went on a Road Scholar excursion last sumer and had an absolute blast. You get the thrills of an adventure, without the stresses of misadventure. Plus, you might meet some learn some things from the more experience travelers you meet up with.
Thanks for sharing that. I think your posting is also helpful for people who have not retired yet to know the actual amounts of things, because before you retire and do the math there is this panic that you will never have enough money. Worse that you fear you might need even more to retire on than presenting making.
I think it depends on what you plan to do in retirement. I have three friends who are retired.
*- One bought an RV and wants to drive around the country with his wife in it doing things like geo caching, visiting relatives and seeing national parks. He had no exact plans when he retired, and right after he did, he decided to drive across several states instead of flying there. He said he actually did this because he didn’t have anything to do and was going nuts.
*- Another also didn’t decide what to do when he retired but worked hard on the financial part so he and his wife could. He retired, and at his retirement party the boss asked him privately if he would be interested in returning to work on a part-time basis. He took the offer. He told me that his boss had no idea how happy he was get that offer because as he said to me, “I had no idea what I was going to do with myself.”
*-The third friend is the couple in their 70s I mentioned. This guy is amazingly active. You’d think when I call him on the phone he’d have nothing else in the world to do but talk to me, but that’s not the case. He is more busy now than when he was working full-time. He does all those things around the house that he use to pay people to do. He’s also involved in charity work and had been involved in local politics to name a few things.
Of the three that I mentioned, the last one is the oldest and is the most busy. Of the three he is the most happy. I believe this is because he is engaged in things he enjoys. The one who went back to work part-time ended up quitting over something trivial and spends most of his time I believe watching TV and any time I have talked to him he’s rarely in a good mood. The guy with the RV having recently retired and not figured it out sounds frustrated about things to me.
So I believe if you find what you truly love spending your time that’s really key. It isn’t about what others do, but what’s most enjoyable to you. But being idle and worrying about your health is not good for you regardless of how much money you have.
As for the $200K, you would have to think about how it makes you feel psychologically knowing you have access to that money without getting anyone else’s permission or applying for a loan. Knowing that if you needed a new roof on the house or a new car, it isn’t going to be an issue for you. I knew an elderly woman in her late 80s who had buckets everywhere in the house because the roof leaked and finally spend the larger part of her savings to finally get it fixed, because she just couldn’t put off the repair any longer. If she had $200K available, it would have made live much easier and stress-free, because it would have been “Need a new roof, OK, how do I make the check out to?”.
This. ^^^
(I’m 66 myself.)
With my luck I’ll spend a big chunk of it and they’ll devise a hack to the “can’t take it with you” thing.
I hate to be a downer but if I were HoneyBadgerDC, I’d spend some times visiting nursing homes and assisted living facilities.
Visit higher end ones and visit county run ones that accept Medicaid patients. Visit tiny facilities with only a half dozen residents that feed them peanut butter and jelly sandwiches and other shitty food nobody older than 10 should have to eat unless they want to.
In my personal experience, even the high end places seem like a far worse lifestyle than I’ve ever lived, even when I was a poor college student. I could never spend my life savings on luxuries for 3 years if there was a chance I’d wind up in a crappy situation at the end of my life.
I plan to enjoy retirement for sure, but not to the extent that I can’t provide nice accommodations in my twilight years.
I have a good pension now. Plus about $700,000 (more than half in my wife’s name) in retirement savings that I so far have not had to use, but just roll over into a standard fund as they pay out. But that’s now. Remember the early 80s? At that time I bought a CD paying 17% compounded for five years. I could have bought one paying 20% but not compounded. With that much inflation, my good pension could begin to look not so good. I probably have 5-10 years left, but my wife could easily go on for 15-20 so I am very reluctant to shoot the wad.