Travel and transportation costs in retirement can be significant, especially if you plan on doing a lot of recreational travel. It may not be as large an expense as housing or medical costs, but it’s still something worth examining and controlling.
What are the best strategies for keeping your transportation and travel costs low in retirement?
1. Controlling Your Location
One of the most important strategies you can use to control your transportation and travel costs in retirement is controlling your location. When approaching retirement, many retirees consider the option of moving to a different location; this is an opportunity to downsize, as well as an opportunity to take advantage of an area with lower prices for just about everything.
You might move down the street to a smaller house. You might move to a different city with a lower cost of living. You may even consider moving to a different country if it saves you enough money.
2. Getting the Right Car
According to Tiger Okeley, “In retirement, your transportation needs and priorities may change. That’s why we see a lot of older adults trading in relatively new cars for older ones.”
Choosing the right car can have a massive impact on your bottom-line budget. If you plan on driving and maintaining your travel independence, you’ll need some kind of vehicle. The question is, which one?
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Safety Ratings and Features
Next, examine the safety ratings and features available. Getting a cheaper car is usually advantageous, but it may not be worth it if that car doesn’t have airbags or seat belts for every seat. Similarly, you shouldn’t choose a car that’s known to have major safety issues just because it will save you a little bit of money; you could end up dying or being critically injured in the hospital if you get involved in a serious accident.One of the biggest ongoing expenses of maintaining a vehicle is paying for fuel, so pay close attention to the fuel economy of the vehicle in question. Even a few extra miles per gallon of gasoline can make a big difference over the course of many years.Don’t forget about insurance costs. You should have an idea of what insurance is going to cost you every year before you finalize your choice of vehicle.You’ll also need to budget for maintenance. Some cars are going to have greater maintenance needs than others—especially older and less reliable models. Neglecting or avoiding maintenance is not an option.Finally, consider the mileage of the vehicle you’re purchasing. The greater the miles, the more susceptible the vehicle will be to maintenance issues.These extra tips can help you save even more money if you plan on driving a vehicle regularly:
- Skip the Unnecessary Upgrades—Whether you’re buying a new or used vehicle, avoid models with unnecessary extra features. Heated steering wheels and autonomous driving features are certainly interesting, but they aren’t necessary—and they could end up costing you a lot of money, especially if you get multiple upgrades at once.
- Pay in Cash (If You Can)—Financing a vehicle can make sense, but it could also cost you significant extra money in the form of interest. If you can afford to save up for a vehicle, or if you’re trading in an existing vehicle, consider paying all in cash.
- Compare Insurance Costs—Insurance is often a secondary consideration for car buyers, but it’s a significant expense that can add up over time. Before committing to any policy, do your research, make sure you understand the policy, and shop around to see if any insurance companies can offer you a better deal. In many cases, you can bundle your car insurance with other forms of insurance to save even more money.
- Maintain Your Vehicle—Some people are reluctant to maintain their vehicle, and they may procrastinate on certain repairs in an effort to save money. However, this is usually a losing strategy. Artificially delaying important maintenance and repairs can make your car more likely to fail, ultimately increasing the amount of damage done and greatly increasing the amount of money you pay. It’s much cheaper, safer, and more convenient to practice routine maintenance.
- Avoid Superficial Expenses—Next, do your best to avoid any superficial expenses that aren’t necessary for your vehicle, as these will significantly affect your retirement travel costs. For example, washing your car may make it look prettier, but it’s not going to affect the performance of your vehicle.
- Consider Sharing—If a vehicle is presenting a financial burden to you, or if it’s eating up too much of your budget, consider sharing a vehicle with someone else. For example, you and a close neighbor can take turns driving the same car and split the expenses.
3. Public Transportation and Ride Sharing
Another option available to retirees is public transportation, which has the potential to save you upwards of $10,000 a year if you forgo owning a car. Not all areas have access to public transportation, but it’s an option you should consider if it’s available to you.
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Convenience and Ease of Use
The cost savings may not be worth it if public transportation isn’t convenient and easy to use. You should be able to pay for a pass and enter the vehicle quickly and without any headaches.Keep your future in mind as well. Public transportation may be a decent, affordable option for you now, but what will it be like in 10 years when you’re inherently less mobile? Are there plans to upgrade the public transportation in your city, or are there signs that this service is deteriorating?
4. Physical Modes of Transportation
If you live in an area that supports the option, you could walk or bike almost anywhere. Walking and biking are extremely advantageous, offering the most affordable transportation options. The trouble is, many retirees don’t have the strength, stamina, or mobility they once did, so they aren’t able to take advantage of these options.
Still, if these options are available to you, you should strongly consider them, at least for some of your daily transportation needs. In addition to saving money, walking and biking are forms of exercise that can help keep you in good shape and improve your health, ultimately saving you money and healthcare expenses if you partake in these activities regularly.
5. Trips and Vacations
Throughout most of this article we’ve focused on daily transportation needs. But we also need to think about periodic trips and vacations. If you’re planning a trip, it likely means you have the financial means to do so without many concerns. Still, it’s a good idea to do whatever you can to save money, protecting your wealth and allowing your money to go further in the process.
Among the best strategies here are choosing destinations with low cost of living, buying tickets at the right time, shopping around, looking for discounts and bundles, and shopping frugally when you arrive at your destination.
With these strategies, the average retiree can do a much better job of controlling transportation and travel costs in retirement. If utilized properly, you could end up saving thousands, or even tens of thousands of dollars every year.
By Deanna Ritchie
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