RRSPs, retirement and travel: What you need to know to plan your dream retirement vacation
Published on: February 2, 2015
Many Canadians have the dream of travelling the world after they retire. When you have your newly found free time, you can book an extended vacation whenever you want – if you have planned your retirement right, that is.
How much does your dream retirement vacation cost?
One thing many retirees overlook is the cost of their retirement plans. How much money will your dream trip cost? How much will it impact your overall retirement income? How much money should you put aside now to make your dream a reality?
Whether you are planning an African adventure, a backpacking trip across Europe or on becoming a snowbird, you should explore your options years in advance to make sure you won’t be disappointed when the day finally arrives.
Assess your financial situation today to plan for tomorrow
“Those Canadians who are able to support both their living needs and dreams in retirement have been diligent about saving and financial planning during their lifetime,” says Andrew Pyle, senior wealth advisor at ScotiaMcLeod, in a recent Financial Post article.
Before you put down a deposit on a vacation home in the south or buy airline tickets for your dream vacation, you should have a good understanding of your financial situation for your retirement years. “It’s the only way to make decisions with peace of mind and the knowledge you won’t be left short when you need money the most,” adds Pyle.
While going on an extended trip is a great way to kick off your vacation years, it should not be at the expense of your quality of living in the future. Most Canadians live 20 to 30 years after they retire, and you should account for this when you plan vacations. Spending beyond your means and running into financial issues 10 years after your dream vacation is not a situation you will want to deal with.
Tips on making your dream retirement trip a fiscal reality
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Start planning today: Start thinking about the details of your dream retirement vacation today. Is it a one-month venture? Do you plan on heading south each year? How much will accommodations, flights and activities cost? Get a rough idea of how much your trip will cost.
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Work with a financial planner: When you have an idea of what your trip will look like, book an appointment to talk with a financial planner, who can help you formulate a plan to financially make your trip a reality.
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Start putting money away today: If you start saving today, you should have little trouble making your trip a reality, especially if you are still a long way off from retiring. For example, if you are 20 years away from retiring and put away $100 per month for your trip, you will have $24,000, which is more than enough to have a memorable adventure, and this doesn't even account for interest earned on your savings.
Affording your dream trip really comes down to getting organized today. The sooner you get organized and create a savings plan, the more money you will have to play with when you do retire. When you are finally ready to take that trip, protect your investment with travel insurance for emergency medical care, trip cancellation and interruption, or buy snowbird travel insurance for extra peace of mind.
Taking off for your dream retirement vacation in the near future? Make sure you have health and travel insurance before you go. Get a quote from Blue Cross today and enjoy your dream vacation worry-free.