How will I cope with travel costs after retirement?

Church of Our Lady before Tyn in Prague (that is not the view from my balcony!)

I am typing this post on a balcony in Prague, in the Czech Republic. On a balmy summer evening. How cool is that?

Oh, and after returning from a scrumptious dinner at a Michelin star restaurant, La Boheme Degustation. Needless to say, the meal was not inexpensive.

Lettuce heart with raspberry powder and a slice of lard – one of my dishes from La Boheme Degustation

This got me thinking …

How I currently fund my travels

I save for my travels in two separate accounts  – one that I use for ‘spending money’ while I am overseas and one for serious costs such as airfares and accommodation.

The account for spending money does not accrue great interest.  But it has no foreign exchange fees and comes with a debit card that can be loaded with different currencies. So I only transfer money on a weekly basis here when I have imminent travel coming up and while I am travelling. I work out approximately how much I need for the holidays and start automating weekly transfers accordingly.

The second account (which is really my travel account) does accrue good interest. I transfer a weekly amount irrespective if I have anything planned. So it is replenished constantly. And ready for my next lot of travels, whenever it may be.

This account is non negotiable – that is how important travel is to me. I don’t want my finances to prevent me from travelling whenever I feel like it. Just as I always have a valid passport. Sure, my work schedule may prevent me from travelling at the drop of a hat. But I don’t want to, ever, be constrained by my lack of funds.

What happens now when I am on holidays?

Generally, by the time I leave the country, I will have already paid for the expensive items such as flights and accommodation plus any pre booked events. I only need money for food, transport and sight seeing expenses while I am travelling. This money then comes out of my spending account. Which is funded. So I don’t draw any money from my usual everyday account while I am on holidays.

While I am away, my everyday account will continue to perform as per usual ie automated weekly deductions to the emergency fund, investment account etc will continue uninterrupted. And any bills that are direct debited from this account or my credit card will also continue as per usual.

Most importantly, my weekly pay cheque will continue to be deposited into this account while I am on holidays.

That’s correct – I get four weeks paid leave per year. I have never done unpaid leave before. If I travel for more than four weeks, it means I did not use up my leave entitlements the year before. Or I have long service leave available.

After I return from my travels

Any money left over in the spending account will be transferred to my emergency fund.

And that weekly amount I was depositing into this account will now be available for the emergency fund which is very close to funding 6 months of expenses.

So … when I retire …

What happens when I retire? That is, I will not have any consistent income like a pay cheque. Yes, I may have the odd dividend arriving from my shares portfolio but that is hardly consistent at the moment. Hopefully, my shares portfolio will grow to a bigger pie by the time I retire in the next decade.

But the question remains – how will I feel if I cannot replenish what I have spent?

I know intellectually, that my nest egg should provide for me – I will not retire unless I have a certain amount saved up. And whether I use the 4% rule or be more conservative and use 3% or 3.5% – that is all conjecture at the moment.

And I have budgeted overseas travel in my plans. I only travel every second year now but I can envision myself travelling every year if I don’t have work commitments.

But psychologically, how will I cope? I can justify spending money (within reason) now, knowing very well that I am still getting paid while on holidays. And that I have a job to return to which means more incoming pay cheques.

So I find myself pondering this …

Should I travel as much as I can now, while I can spend $250 on a dinner, knowing that I can replace it? And while I am in good  health and can walk happily for miles? 

Maybe I should focus on the expensive routes and cities (that’s you, Scandinavia & western Europe & dare I dream it – Antartica?) while I’m working. And leave Asia and South America until I retire.

Maybe I should have my fill of Michelin star restaurants now. And what about cooking lessons? But I have always dreamed about cooking in Tuscany or Provence – join one of those insanely expensive tours where you stay in a magnificent historical house in the countryside and cook and eat.

Will I still want to travel or will I not enjoy travelling as much if I cannot spend money on experiences that I value? If I have to question every expense, justify every dollar …

Needs and wants change …

Perhaps I am worrying needlessly. After all, what I think I want when I retire may not be what I want when I do finally retire.

For example, on this holiday when I was in London with my niece, I was much happier spending time with her than gallivanting about town, attending shows and eating at trendy restaurants. Which is absolutely what I would have indulged in if my niece were not available. And it was what I did on previous visits before she was born. I did do those things on this trip, just not as much as I did on previous trips.

So who knows … I may tire of eating at overseas Michelin star restaurants; I may give up that dream of joining a culinary tour to Tuscany or Provence; maybe the need to visit Antartica will fade …

After all, I cut out my daily takeaway cappuccinos when the need arose. Perhaps travel experiences will be not be any different.

And there may be new dreams – like spending each summer with my niece or exploring mini retirements

Sigh …. I think my FI date just got pushed further away …

Final thoughts

Am I over thinking this? Maybe. But it’s best to think out scenarios and prepare for them. At least, anticipate that there may be a problem.

And start thinking about how I would react or respond. And perhaps explore if some other contingency plans can be forged.


How about you? Do you have an expensive hobby that you worry you may not be able to fund once you retire? Am I thinking this all wrong?




16 Replies to “How will I cope with travel costs after retirement?”

  1. I’ve been thinking the same as you.
    What I’m doing at the moment is putting off travel for another year or two and Getting Things Done around the house that I want to have in place before I retire – expensive things like landscaping, verandahs and renovating an ensuite.
    I’m thinking that once I feel that the home base is taken care of, then I’ll feel ok to spend the money on travel when the income stops.

    1. It’s competing priorities, isn’t it? Certainly better to set up your home base well now then it’s done and dusted for a long time. Also, with our aging parents, it will be that little bit more difficult to plan long trips away. I guess everything is about balance.

  2. Some good questions & great overview. One thing tho – Antarctica is AMAZING! I have been fortunate enough to have gone and say to everyone – if you can, go, do it! It is like nowhere else on earth. Yes it is horribly expensive, but it is worth every cent. My trip was on a smaller research vessel, that does tourist runs in the summer from Patagonia.
    Please, consider this for your next trip. I promise you it will be a trip of a lifetime.

    1. Ooohhh …. OK, I will not shelve this dream then! It’s at least $10000 so will need to save a bit more first. Maybe this should be my dream holiday when I retire and combine it with South America … the dream lives on – just need to be creative with how to fund it. Thanks AW!

  3. I have the same plans as you, plenty of travel when I retire although my wife’s increasing fear of flying may make that more difficult over time. My plan is simply to have the likely costs as part of my FIRE budget and plenty more besides so that I shouldn’t have to worry about it at all. It’s different for everyone, but at this stage at least I don’t mind working so I’d simply keep doing that for longer until I feel comfortable that the amount saved up is sufficient to well and truly cover my living expenses as well as all the extras I want in early retirement.

    1. Hi Aussie HIFIRE! I suppose there’s always cruises though they are the more expensive options perhaps. But there are people who love cruising – no need to pack & unpack all the time, all meals provided etc.

      I just worry that I haven’t budgeted enough – I am a ‘worrier’ though. It would be so disappointing to discover I can’t travel as much because I screwed up the math …

  4. I may be biased, but I don’t there’s such a thing as overthinking. It’s good to contemplate all angles. It seems like we approach budgets a little differently. I don’t think of money I spend before retirement as money I can ‘replace’ – I think of it as money I’ve spent that is therefore lost forever 😃. For that reason I imagined I would have the same feelings on spending in retirement and as a result my habits wouldn’t change. I could be wrong though. It sounds like several of the activities you want to do are pricey so given how you think of money pre and post retirement I would suggest doing them now if it would cause you stress to spend that money post. As for the mini retirement and FI date questions – I’ll leave that up to you 😉. Excited to read what you decide!

    1. Hi, A Purple Life! Somehow, travel is a different category in my brain when it comes to money. While I can think of money spent in other categories eg clothes, takeaway meals, general stuff as money lost forever, I get into this … ‘if I don’t do this now (whatever this may be), I’ll never be back again to do this another time’ mode on my travels and my brain just overrides the ‘money lost forever’ mode. I’ll just have to keep assessing and see how I feel over time. Thanks for sharing your perspective and hope to meet you in Oz on your retirement 🙂

  5. this conversation is one my husband & I have often: travel now while we are healthy & can climb the mountains & kayak the seas , etc etc or wait & save not knowing what the future brings. we both watched a parent work hard & then fall ill, losing their chance to enjoy retirement & travel. we are currently compromising & travelling some when we save for it.

    1. Yes, same here. In my early 20s, my friend and I joined a tour to Europe – I think that tour influenced my thinking about travels forever. There were people in their 50s and 60s who could not walk on the cobbled streets, who could not walk up the steps to the Parthenon in Athens. We decided we did not want to be those people. To have saved all their lives for this one big trip and then not be able to participate – that would be heart breaking. So I’ve always aimed to travel while physically capable.
      But my rule is never to use debt to travel (home mortgage notwithstanding – on a side note, could have paid off my mortgage a LOT earlier) so I’ve always saved up to travel but yes, it’s a compromise …

  6. I was interested to read your thinking on this. I’ve very recently (3 months) taken the plunge and dropped to 2 days a week to wean myself off my higher wage, start seeing what it feels like to have a lot more free time whilst also putting off dipping into my retirement savings. I’m feeling a bit ungrounded at the moment, but travel is also a big priority for us. I travelled a lot with work staying in nice hotels and eating expensive meals so have often looked to travel differently in my personal life. Personally I feel the high end hotel/restaurants is a certain way to experience a place but I really enjoy the challenge of creating a holiday on a different budget whilst still experiencing what a place can offer. For example we found an amazing place up in the mountains in Spain where we could do walks, they do yoga, painting and cookery holidays as well as trips to local cultural places. The hotel is very rustic and Spanish, but the food – cooked using the hotel’s own organic garden and local wines – was amazing. When you’ve got more time, maybe you will be able to create more tailor made holidays that aren’t so expensive and just dip in and out of the luxury. Another thing we did was Bahamas (quite a trip for us as we’re UK based) but instead of an expensive hotel, we found a reasonably cheap house with the beach at the end of the garden. We saved loads of money (and it was fab), so didn’t feel guilty having days and evenings out at the more luxury end of the spectrum. It can be a challenge

    1. That sounds so amazing, Maria! You are right – with more time, I could research more about how to achieve my outcome in a different way. I would love that Spanish hotel and the seaside house in the Bahamas … My plan is to reduce my hours to 3 days a week at some stage, just not sure when yet.
      I’m staying in cheaper accommodation during my travels at the moment, mainly in apartments. I was let down previously in London with short notice by an AirBnB and had to book a hotel instead so was a bit scarred by that experience. But this time round, the experience has been much better. And I’ve enjoyed staying for 6 days or more at my main destinations – a bit more chilled out than previous holidays. And yes, dipped in and out of luxury … combined with eating from the local supermarket

  7. This is a really great post! Awesome to be thinking critically about these financial/lifestyle topics before retirement.

    You must have a million credit card points / miles, right? I’m curious, do you do any travel hacking with your credit card?

  8. Hi Nate, no, I don’t have a million credit card points! Unfortunately in Australia, travel hacking is not as lucrative as in the US. But I do use credit cards to earn Qantas points. So generally, my flights are covered by points except for the tax component (which can add up if you are travelling at peak time and landing at expensive airports).

    I sign up to a new card each year to get bonus sign up points (making sure I cancel one exisiting card) and spend whatever amount they specify to get the bonus points eg $3000 in 3 months. I always sign up at a time when I know I have big bills to pay eg my annual health insurance bill. Then I just put all expenses on the credit card throughout the year and always pay my credit card bills on time.

    Some people cancel the cards once they receive the bonus points but I usually leave it for 10-11 months (just so I don’t have to pay the annual fee)

    Unfortunately, we don’t have any cards that reward hotel points like in the US. So accommodation costs for me is the killer. I don’t like hostels; airbnb has let me down in the past so looking at other ways to save on accommodation.

  9. Hi, first off nice to see someone my age writing about fire, it does feel at times like its only a young person’s game!

    I think you need to rethink how you view travel.
    Even based on what you said about your recent London trip, do you really get value from those fancy hotels and Michelin restaurants?
    I’ve rarely bothered myself, but the few times I have, I’ve always felt a bit let down, especially when I consider all I could have done on the same amount of money.

    Personally, I much prefer slower travel, and staying in cheaper places for longer. For me it’s a win win. I get to stay off work longer, and also get a more authentic experience.

    Ironically, I’m writing this from probably the most opulent hotel room I’ve stayed in! It’s a suite, with a massive living room, enough cupboards to hold 10 of by backpacks and a fancy pool. For the first few minutes, I loved the novelty, but tbh it’s already kinda worn off. And I’m finding myself spending more time here doing nothing really, just to justify the (relatively) high price tag (as it’s Bangkok, it still cheap by Oz standards)
    Last time, I stayed near banglampu in a place 1/5th the price, and spent a lot of time eating street food and taking the river boat, much more fun.

    Have you thought about options like woofing or workaway, or similar?
    Maybe you could get something in Italy that allows you to really explore the cuisine and have time to learn at your own pace, at very little cost.

    Personally, I do intend to go to Antarctica, so that won’t be cheap, and while I’m still working in tech (though only half the year now, I travel the rest) i am going to more expensive places, like Bhutan and Iceland. It’s a bit of a balancing act, but I think you can travel and have (more) fun on a whole lot less than people typically spend on holidays taken while working full time.

    1. Hi Sean, thank you so much for the detailed comment! I am so looking forward to slow travel when I finally retire. My job is not that flexible – will be good if I can negotiate 8 weeks off instead of the usual 4 so I can spend time with my little niece in London. Just looked up Wwoof – sounds interesting and the experience would be invaluable. I love street food and fine dining – they are not mutually exclusive 😉 or maybe I just love eating. If I were in Bangkok, I would eat nothing but street food!

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