Budgeting Tips for Dream Retirement Travel

Summary: Ready to travel in retirement without breaking the bank? This guide helps you plan a retirement travel budget so you can enjoy trips with peace of mind.

What’s on your bucket list? A week in Paris? Brewery tours in Ireland? Maybe you just want to see one of the seven wonders of the world! Whether you’ve already retired or you’re nearing retirement, it’s okay to plan to help turn your dreams into reality.

It may not be possible for you to hop on a plane and go today, but with a savings strategy, your dream trip can be within reach! Read on to see how to calculate your costs and budget for your trip.

Why retirement travel deserves its own budget

Retirement is your chance to see the world at last—or at least those places you’ve dreamed about for years. But if you don’t properly plan for it, travel costs can quickly eat into your savings.

Having a retirement travel budget is important because it allows you to:

• Enjoy adventures without money worries.
• Avoid surprise expenses.
• Align travel with your overall retirement plan.
• Gain peace of mind to relax and enjoy.

How to create a budget for retirement travel

Here’s how to create a budget for retirement travel—step by step.

1. Estimate your retirement travel expenses

Before you dive into retirement travel budget planning, get a rough idea of what your trip will cost. This gives you a starting point and helps you see how your dream aligns with your finances.

Begin with these common expense types:

• Airfare: Check online for average prices to your destination. Use platforms like Google Flights or Expedia to get a ballpark figure.
  • Travel during off-peak seasons to save big.
  • Don’t forget about bag fees—some airlines charge for checked luggage each way.
• Passport costs: If you’re heading abroad, make sure your passport is valid. Based on the latest fee schedule from the U.S. State Department, here’s what you can expect to pay:
  • New adult passport: Around $165
  • Child under 16: $135
  • Renewing an expired passport: $130
  • Remember that costs may vary depending on processing times and location.
• Lodging options: Your accommodation can make or break your retirement travel budget.
  • Compare hotel prices on sites like Trivago, com, or Airbnb.
  • Look for senior discounts, travel bundles, or off-season rates.

2. Factor in activities

Want to explore castles, dine at local hotspots, or join a guided tour? Add those experiences to your plan. Check admission prices and leave room for unexpected fun.

• Museums, excursions, and food tours can add up quickly.
• Add a “wildcard” line to your budget for spontaneous moments.

3. Don’t forget transportation

Will you rent a car, take public transit, or use taxis or rideshares? These expenses are often overlooked, but they are essential parts of your retirement travel budget planning.

4. Plan for health care while abroad

Medical care should be a top priority when planning retirement travel. If you’re over 65:

• Know what your Medicare plan covers.
• Many retirees consider Medicare Supplement Insurance, which may help cover international emergency healthcare costs.

If you’re under 65, check with your insurance provider about international coverage.

5. Check your phone plan

Want to stay in touch with loved ones? International phone plans can be costly. Speak to your carrier about:

• Travel add-ons or temporary international plans
• Switching to a local SIM card
• Using Wi-Fi apps like WhatsApp or FaceTime

6. Review currency exchange rates

Depending on where you’re going, your money may go further, or not as far. Monitor exchange rates and factor in conversion fees when planning how much to budget for travel in retirement.

7. Build in a buffer for the unexpected

Lost luggage, missed connections, or forgotten medications can disrupt your plans and your finances. Add an emergency line to your retirement travel budget—even $100–$200 can offer peace of mind.

8. Consider all-inclusive options

If tracking every expense sounds stressful, cruises and resorts can simplify your retirement travel budget planning. Many include lodging, meals, entertainment, and sometimes even excursions, making it easier to predict costs.

Start saving for your retirement travel budget

Once you know how much to budget for travel in retirement, it’s time to save up. Here’s how to make it happen—even on a fixed income:

• Add a vacation line item to your household budget. Consider contributing a fixed amount each month to this budget; even $50/month builds up over time.
• Cut back on small extras. Skip a few takeout meals or cancel unused subscriptions.
• Find a fun side gig. Sell homemade goods, tutor online, or take on a seasonal job.
• Spend less now, explore more later. Buy fewer gifts now and bring back travel souvenirs instead.

Choosing destinations that don’t stretch your retirement travel budget

These destinations provide a mix of affordability, quality healthcare, and lifestyle amenities, making them ideal for a fulfilling retirement.

• Portugal: Known for its affordable living costs—around 30% cheaper than Paris—Portugal offers a blend of vibrant culture in cities like Lisbon and serene coastal towns for a peaceful retirement. In addition, it offers a cost-effective lifestyle but also access to quality healthcare and senior-friendly amenities.¹
• Costa Rica: With suitable public healthcare and diverse climates, Costa Rica is a compelling choice. The Pensionado Visa is particularly attractive for retirees with a fixed income.²

Thailand: In Chiang Mai, retirees can enjoy low living expenses, with studio apartments available for under $400 monthly. The country’s rich culture and affordable healthcare make it a retiree favorite.³

Mexico: San Miguel de Allende offers cultural richness and affordability. The Residente Temporal visa allows retirees to stay for up to four years with tax benefits.⁴

Keep the cost of living in mind

A less expensive cost of living can transform how you budget for retirement travel. Do your homework before you book that flight:

• Housing: In certain places, like Thailand, rent can be incredibly cheap. A decent apartment costs about $300/month.
• Food and basics: Look at the cost of groceries, meals, and local transport. Destinations like Portugal and Mexico offer an exceptional quality of life without high expenses.

Get more from your retirement travel budget

Stretching your retirement travel budget doesn’t mean cutting back on fun. It means being intentional:

• Consider staying longer in one place—you’ll often get discounts on accommodations and feel more connected to the local life.
• Skip the tourist traps and eat, shop, and explore like a local.

Smart travel can fit into any retirement plan

With thoughtful planning, the right destination, and a realistic retirement travel budget, your dream trip is absolutely within reach. Whether it’s a yearly getaway or a once-in-a-lifetime adventure, it starts with knowing how to create a budget for retirement travel that fits your lifestyle.

Need help to align your travel goals with your finances? Mutual of Omaha offers many resources to support your retirement planning, so you can travel with confidence.

FAQs

Q1: How early should I create a retirement travel budget?

Expert recommendations vary from 5 to 10 years before retirement to align travel goals with your savings plan. Starting early helps you make better choices and enjoy your travels without money worries.

Q2: Should I use a travel rewards credit card?

It can be very beneficial, as long as you pay off the balance monthly. Look for cards with no foreign fees, good rewards, and travel perks. You can accumulate points or miles for every dollar spent, which can be redeemed for flights, hotel stays, or other travel expenses.

Q3: Can I travel internationally on a fixed income?

Yes, but with careful planning. Choose budget-friendly countries, travel off season, and use senior discounts to save on travel costs.

Sources:

1. The Golden Portugal, 6 Places to Live in Portugal, April 2025
2. Kiplinger, Retire in Costa Rica for Expat Heaven, May 2025
3. ConnectPls, Chiang Mai, Thailand: Affordable Living and Vibrant Expat Community, May 2025
4. My Casa, Retiring in Mexico: Guide 2024, March 2024

451717_0525