All work and no play makes Jack a very boring boy. It is important to have fun and set aside time for travel and leisure for balance. This article discusses the importance of incorporating travel and leisure activities into your planning and provides interesting personal and business travel trends.
Living well the New Retirement: “The Four Pillars of the New Retirement,” a three-year study by Age Wave and Edward Jones, tracked changing attitudes and behaviors, and the latest March 2021 update summarized changes over the the COVID-19 pandemic. Age Wave is a thought leader on the aging population. Key findings include:
► Planning for retirement requires more holistic thinking than simply saving enough money.
► The four pillars—health, family, purpose, and finances—are essential to well-being.
► A majority of retirees “would have liked to have better planned the non-financial aspects”.
► About four in ten Americans say the pandemic has changed their retirement schedule.
► A silver lining is that 70% think the pandemic has been a financial wake-up call, to pay more attention to their long-term finances.
► Positive views on retirement increased, including “a new chapter in life” (56%), a time to rest and relax (28%), continuing with what life was like (9%) and the beginning of the end (7%).
And travel and leisure intertwine with many, if not all, of these four pillars.
Interesting trends and perspectives: Americans are still traveling and their ways have changed a bit
► Air travel is back in force. More than 2.2 million passengers passed through TSA checkpoints nationwide last Sunday, the highest number since Feb. 28, 2020. Airlines have announced new plane purchases and are on struggling with labor shortages (dealing with the same demand and supply imbalances as many industries).
► Not everyone is happy to get on a plane, especially those with families. Priceline reports that nearly 9 in 10 have taken at least one road trip since March 2020, and 75% reported at least four road trips.
► In a record quarter, 151,000 RVs were shipped to dealerships. An estimated 11.2 million households now own an RV, a 26% increase over the past decade.
► Boating is one of the most popular outdoor recreational activities – sales of boats and related equipment reached $47 billion in 2020, a 13-year high and a 9% increase from to 2019.
► Travel prices are on the rise. According to CNBC, consumer prices in the United States rose 5% year over year in May. However, not all prices increased equally: +29.7% for used cars and trucks, +24% for airfare, +10% for accommodation, +2% for housing, + 0.4% for food.
Planning tips: Financing a travel and leisure budget in retirement:
► Define what you want your retirement to look like and align with your partner. Is it an extended trip or several shorter trips, international or domestic, what are you doing and with whom? Look for ideas online and at travel clubs, including travelandleisure.com, theearthwaits.com, and your alma mater.
► The budget is not necessarily linear. Spending patterns resemble what is known as the retirement “smile” – start high in the early stages of retirement (real estate projects, travel, vehicle replacement, etc.), settle into a groove, then increase later in life (costs of aging).
► Build confidence in your investment and spending plans. It’s human nature to drop your wallet when economic conditions are uncertain and markets are down — the “fear/pause” response. But that’s when the queues are short and the bargains emerge.
Planning the family leisure trip has become more complicated. We just returned from a family retreat in Jackson, Wyoming. We 12 hadn’t met for a year and a half. We weren’t alone, with 50,000 other visitors eager to “get out of Dodge”. Call ahead to reserve for everything, and bring your wallet and your patience.
Travel and leisure deserve an important place in your planning. Consider a line in your budget for annual trips, and if you have a dream vacation in mind in a few years, or several big trips in retirement, plan and budget now. They are good for your body and soul, and for warming up important relationships. May you have wise counsel and secure your future wisely.
Brian Loy, CFA, CFP, is president of Sage Financial Advisors Inc., based in Reno. Contact him at www.sagefinancialadvisors.com.