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How to accumulate enough wealth to travel for leisure

How to accumulate enough wealth to travel for leisure

Article Date August 2018

Retirement is the perfect time for weekend getaways, extended vacations, and family reunions. With work-related constraints out the window, you are free to travel at leisure and enjoy the extra time on your hands.

But travel can be expensive, especially if you plan on taking a lot of trips or if you want to visit some exotic destinations. It’s important to have enough extra wealth on hand so you can travel at will when you’re older. You certainly don’t want to dip into retirement savings that are allocated for everyday living expenses or health care.

If you are planning for your retirement, now is a good time to assess where your personal finances stand and make necessary adjustments to continue growing your retirement savings portfolio. You should also start exploring some creative ways to put money aside for retirement vacations.

  • Contribute to a carefully chosen retirement plan. When saving for your retirement, you have many options to choose from. A good place to start is a 401(k) (also called an employer-sponsored retirement plan). Another option is an traditional IRA or a Roth IRA. You should also try to diversify your retirement portfolio among a variety of investment and savings vehicles. Typically, you should be contributing 10 to 15 percent of your salary to your retirement account if you are 30 or younger (more if you’re older and you’re trying to catch up). If you want to accumulate extra wealth so you can travel for leisure, you may want to contribute more to your retirement savings or take a more aggressive approach with investing your retirement dollars. But, keep in mind, more aggressive investing involves risks that include loss of principal. The advisors at the Synergy Group can help you with those important retirement savings decisions.
  • Open a dedicated savings account for travel. Remember when you kept a piggy bank to save up for a shiny new bicycle? Or when you put aside money for the holidays with a Christmas club account? You can take a similar approach by opening a travel savings account for your retirement trips. It’s easy to grow your money by making automatic transfers from your paycheck. If you are looking for a greater yield, you might want to consider purchasing certificates of deposit (CDs) or opening a money market account. Over time, you will build a nice little nest egg from these forms of savings.
  • Squirrel away found money. Every now and then, you’ll come across a windfall such as a bonus at work, a larger-than-usual tax return or an unexpected inheritance. Instead of spending that money on something you’ll probably forget about next year, invest that cash into one of your investment or travel savings accounts. Try to do the same by cutting expenses such as carpooling to work, refinancing your home at a lower rate or installing a programmable thermostat. Put that extra cash into your savings and watch your money grow!
  • Cash in on points and miles. If you are already doing a lot of traveling for work or pleasure, you can earn travel rewards and put aside those points for retirement excursions. Make sure you sign up for a loyalty program with your favorite airline. You can also enroll in a dining program or switch to a credit card that pays bonus points. And if you will be doing a lot of traveling during your retirement years, guess what? You can continue reaping travel rewards for future vacations!

As you can see, there are many ways to save money for retirement vacations. The important thing is to come up with a plan and stick to it. By the time you are ready to retire, you will accumulate enough wealth so you can travel to your heart’s content.

This material is for informational purposes only. It is not intended to provide tax, accounting or legal advice or to serve as the basis for any financial decisions. Individuals are advised to consult with their own accountant and/or attorney regarding all tax, accounting and legal matters.

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