Retire and roam: Financial tips for traveling in retirement
For many, the freedom and flexibility to explore new destinations is one of the most exciting prospects of retirement — whether you’d like to go overseas, across the country or to a neighboring state.
As you plan for these adventures, an Ameriprise financial advisor is here to help you prepare by creating a personalized retirement income withdrawal strategy that accounts for your travel goals.
Before you embark on your journey, here are a few financial considerations:
If you plan to travel abroad
Research your health insurance options, Social Security access and potential travel risks in the countries you plan to visit.
- Medicare coverage does not extend to foreign countries. Most domestic health insurance plans, including Medicare, are not accepted outside the U.S. If you’re planning a short trip, travel insurance can cover medical emergencies. For longer trips, evaluate whether an international health plan is right for you.
- Social Security benefits are generally accessible abroad — with a few exceptions. U.S. citizens are entitled to their Social Security payments while abroad, so you’ll continue to receive them as long as you remain eligible and are in a country where payments can be sent. However, there are select countries where the Department of Treasury restricts or prohibits payments to people residing there. See the official Social Security Administration report for further guidance.
- You may be at risk of scams targeting tourists. It’s possible you may be targeted by scammers in high-tourist areas while you’re abroad. As such, it’s smart to research your destination ahead of time and to stay vigilant during your travels. The State Department’s website is a good resource to learn about widespread scam types and to learn more about the country you’re planning to visit.
If you’re planning extended travel
Traveling for long periods of time gives you the opportunity to enjoy your destination in a more leisurely fashion, but there are considerations:
- Evaluate how to offset or reduce day-to-day expenses. Paying for travel accommodations while also maintaining your home life for a prolonged period can add up. As you plan, account for all the costs involved with living away from home for an extended time.
- When traveling domestically, be aware of certain Medicare service area limitations. Traditional Medicare health coverage will stay in effect regardless of the state. However, the service areas for Medicare Advantage and Part D plans are typically limited. For the latter, check with your health care provider if you’ll have coverage in the areas you’re traveling. (As mentioned above, retirees traveling abroad for an extended period will want to consider other health care options as Medicare doesn’t provide coverage to beneficiaries when they’re out of the country.)
- Understand any possible tax implications if you plan to work on the side. Tax laws vary from state to state and country to country. Be prepared to potentially pay additional taxes if you earn income somewhere that is not your residence.
If you prefer big trips on an annual or semi-annual basis
Perhaps you’re more interested in taking one or two major vacations per year. If that’s the case, it can be helpful to set aside a lump sum at the start of the year when you’re planning your retirement income withdrawal strategy.
If regular visits to family or friends are your priority
For those interested in regular travel to see loved ones, consider calculating the average cost of each trip. Then, multiply that figure by the number of times you plan to travel in a year. You can then build those expenses into your monthly or annual budget and look for opportunities to save. For example, if you plan to spend a lot of time in the same place to see grandchildren, purchasing a second home may be a financially wise decision for your family.
Financial tips for all retired travelers
No matter where you plan to travel in retirement — or how long you plan to stay — here are a few ways to make the most of your money:
- Travel insurance: Travel insurance may add to your expenses, but getting sick, injured or stuck without the proper insurance can be more costly. Travel insurance can also cover lost luggage, trip cancellations and emergency evacuations.
- Travel credit card rewards and benefits: Consider credit cards with travel rewards programs. Many offer points, miles or cash back when you spend on travel-related purchases like hotels, dining and transportation. They also may offer perks, such as discounts on rental car insurance or free airport lounge access. Paying the balances off before the end of your billing cycles can help you avoid interest and reap the most from credit card rewards programs.
- Senior travel groups and discounts: Look for senior discounts as you book your accommodations – many organizations, travel companies and airlines offer them. Additionally, there are clubs that specifically offer group travel experiences to retirees.
- Comparison shop: When planning a trip, many accommodation, transportation and entertainment providers are competing for your business. If you do not have specific destinations or travel times in mind, you may choose to take advantage of packages and deals as they come up. Sometimes, traveling to less well-known locations and in the off-season can offer big discounts and better rates.
Start planning your retirement travel
Your Ameriprise financial advisor will help you prepare and plan for the different financial implications for travel in retirement, including income withdrawal strategies and more.
Or, request an appointment online to speak with an advisor.
At Ameriprise, the financial advice we give each of our clients is personalized, based on your goals and no one else's.
If you know someone who could benefit from a conversation, please refer me.
Background and qualification information is available at FINRA's BrokerCheck website.
 US Social Security Administration, Your Payments While You Are Outside the United States, https://www.ssa.gov/pubs/EN-05-10137.pdf
2 AARP, What happens to my Medicare coverage if I move to another state?, https://www.aarp.org/health/medicare-qa-tool/what-happens-to-medicare-if-you-move-states/
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