5 Things We Learned About Retirement Planning and Travel in 2020

A Shopping Cart filled with toilet paper

2020 is almost over. It seems like a bigger than normal celebration is in order, but ironically, the usual New Year’s festivities will be muted. Lockdown orders and an unwillingness to gather in crowds will do that.

You can’t live through such a unique year without learning something. Maybe it was how to make a mask with an old t-shirt and duct tape, or perhaps it was how to time deliveries at your local supermarket so you could hoard Clorox Wipes.

What have I learned? I’m glad you asked.

Do it now

“The future is promised to no one.”

A great quote that either came from the Bible, Clint Eastwood, or Walter Payton – Google seems confused. Regardless, 2020 reinforced this concept with the subtlety of a tire iron to the knee.

Globally there have been 1.6 million poor souls that have died from COVID-19 – a tragic number that continues to climb and a stark reminder that tomorrow is not guaranteed.

So, do it now. Whatever you’ve been putting off, do it now. Of course, now doesn’t necessarily mean this instant. Do it as soon as it’s reasonably safe. Time with loved ones, long-delayed retirement planning, bucket-list travel – whatever you’ve been putting off. If it’s important to you, 2020 should be that gentle forceful push to get you moving.

A large elephant nudges a baby elephant from behind

Don’t try to time the market

Sure, it’s easy. Sell high and buy low.

When you’re unemotionally scanning a long-term chart of the S&P 500 in your pajamas, with hot cocoa by your side, the 2020 market drop seems like a tiny blip. Living through it was quite different. With a pandemic raging in the world and global stock markets plunging, opening a newspaper (or news website of your choice) delivered headlines like this:

Coronavirus Rescue Package Fails to Clear Hurdle in Senate

IOC Considers Postponing Tokyo Olympic Games

Coronavirus Hits U.S. Senate as Rand Paul Tests Positive

Marriott, Hotel Owners Furlough Thousands of Workers, Cut Staff

And my favorite :

The Great Toilet Paper Scare

These articles appeared in the March 22nd edition of The Wall Street Journal – the day before the S&P 500 bottomed.

Successfully timing the 2020 market involved two trades – selling before the most rapid bear market in history and buying before the fastest recovery. I’m sure everyone has an uncle who brags about how they nailed it to the day, but for most, coming out ahead navigating this market was extremely difficult.

How hard is market timing? The September 2007 article “Mutual Fund Flows and Investor Returns: An Empirical Examination of Fund Investor Timing Ability” measured mutual fund investors’ performance from 1991-2004. Investor timing decisions caused them to average returns that were 1.56% lower each year than they could have been. Compounded over a lifetime, this is a crippling blow to an investor’s net worth.

There is undoubtedly an investment guru who sidestepped the crash nimbly and then bought aggressively at the bottom. You’ll hear all about their genius. Don’t be impressed until they do it a second time.

The best course of action? Keep diligently adding to your retirement accounts. You’ll buy more at lower prices, and your nest egg will thank you. Buy and hold investing works.

The emergency fund became sexy

For most people, the emergency fund is boring. It’s a pile of cash in a high-yielding account (try to control your laughter, these used to exist) that sits there unloved. That’s until a once-in-a-generation pandemic sweeps the globe and leaves financial destruction in its wake.

Financial planning 101 – save 3-6 months of expenses for a rainy day. And every so often, a torrential downpour like 2020 comes along to make you happy you did. 

Woman stands in pouring rain with umbrella

If you made it through the year with your job, you were one of the lucky ones. Nearly 16 million Americans were not so fortunate.

I’ve written many times that the emergency fund is not sexy, but it’s critical when you need it. It can reduce stress and give you extra time to weigh your options when an emergency strikes.

Retirement may come earlier than you think

“First time in nearly 50 years people 55 and over have lost jobs at a higher rate than younger peers” – AARP

Unemployment has hit older workers hard during a time in their lives traditionally used to shore up retirement savings. These high-income years, paired with the ability to make catch-up contributions, are often instrumental to the financial success of a retirement plan.

Whether it’s companies trying to cull well-compensated employees, or other forms of ageism, this development is unsettling. It may become the normal course of action when future economic shocks hit the economy.

Even in good times, older workers often leave the workplace earlier than planned. Issues such as health or caring for loved ones can cut short a career.

The pandemic is a harsh reminder that plans don’t always go as expected.

The best way to prepare for the unexpected is to develop a retirement plan early and fund it aggressively. If you’d like to retire the day you reach 65, put together a plan that shaves a few years off that number. It’s better to save as if you’re going to retire a few years sooner than desired because early retirement may come whether you want it to or not.

Another benefit of conservatively preparing for a premature exit is your employer may offer an early retirement package. You will be in a better position to accept an attractive offer. Also, early retirement packages can precede layoffs, so it’s nice to have options.

Prepare for the future

A good plan is most valuable when the world around you is falling apart. How did 2020 treat your plan?

If it’s important to you, plan for it. Put together a budget for expenses, review your insurance policies, make sure your beneficiaries are up to date, and your will remains true to your wishes. It’s too late to come up with a well-conceived plan when you’re in the middle of a crisis.

If you love to travel, now’s the time to plan your future adventures. Figure out where you want to go, what you want to do, and when you want to do it. Sure, you’ve always had the dream of an African safari sometime later in life, but now’s the time to put a date on it.

Safari at Sunset

If you’re not doing it already, include travel in your retirement budget. Most people want to travel when they are done working, but most don’t budget for it. (Financial advisor hint: It can be expensive.)

Not to make this into a commercial, but now’s the time to put together a comprehensive financial plan. If you have the time, knowledge, and desire to do it yourself, I highly encourage you to go for it. If you need help, find a fee-only financial advisor who will help you with it.

Conclusion

The pandemic we are living through is miserable in so many ways. However, the worst thing to do is not learn from it. The last nine months have been a painful time for many, but the experience may ultimately help us all make better decisions and lead a more rewarding life.


Your questions about planning for retirement and travel answered. Where to go? What to do? How to plan it? How to afford it?

You’ll not only be signed up for my newsletter, but you’ll also get a PDF that shows you exactly what a comprehensive retirement plan for people who love to travel is all about. Thanks for reading!

 

 
 
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    Financial Advisor David Tuzzolino

     

    David Tuzzolino, CFA, CFP®, is the Founder and CEO of PathBridge Financial, a firm that specializes in providing comprehensive financial planning and investment management services for clients that are nearing retirement and love to travel.

    A First-Hand Account of Quarantining Caribbean Island Style, 7 Ways to Find Free Money, and More! – Links

    A stone Path Bridge in Central Park covered in snow

    If you find yourself with some free time this holiday season, there’s no better way to spend it than looking for some “Sidewalk Money”. Meb Faber walks you through seven ways you might be able to find some serious coin. While not as lucrative, I’ve included an additional half dozen articles that should be worth your time. I won’t be back with more links until after Christmas, so if you’re celebrating…Merry Christmas!


    New Graduates

    7 Financial Tips for College Grads in 2020 – (PBF)

    It’s the time of year for newly-minted college graduates. If you have one in your life, they may be wondering where to begin financially. Here’s an article highlighting seven tips that will benefit all graduates.


    Retirement

    Instead of drinking a fourth glass of egg nog this holiday season, consider spending an hour or two searching for “Sidewalk Money” – (Meb Faber)

    Meb presents 7 ways to find “free money”. Most take 15 minutes or less. What have you got to lose? I’ll tell you what you’ve got to lose – nothing!

    The pandemic is another reason to expect an earlier “retirement” then planned – (Forbes)

    Putting together a comprehensive financial plan with a retirement plan of 65 sounds like a fantastic idea. But what happens when a pandemic, ageism, or health issues smack you in the face and retirement comes sooner than expected? When planning it’s always a good idea to move your expected retirement age forward a few years to account for unpleasant surprises. It also puts you in a position to accept a generous early retirement package if it comes along.

    Lessons learned from three years of retirement – (CanIRetireYet?)

    “You won’t do it in retirement if you’re not doing it now.”


    Travel

    Want to quarantine on a Caribbean island? – (CondeNastTraveler)

    Here’s how to do it in a resort on the island of Grenada, at a hotel which…refers to quarantining there as “vacationing in place.” A hotel room in paradise is a fantastic place to quarantine – until it isn’t. 

    Trips you may want to book a year in advance – (ThePointsGuy)

    Safaris, French Polynesia, a cruise to Antarctica…all vacations you should consider planning a year in advance. My guess is that bucket-list travel will be in high demand once it is safe to travel again. You might want to prepare in advance, just make sure everything is fully refundable.


    Podcasts

    Top podcasts of 2020 compiled by The Idea Farm– (Spotify)

    If you’ve got some holiday downtime and you enjoy listening to podcasts about markets, investing, and general business ideas – this is the list for you!


    Your questions about planning for retirement and travel answered. Where to go? What to do? How to plan it? How to afford it?

    You’ll not only be signed up for my newsletter, but you’ll also get a PDF that shows you exactly what a comprehensive retirement plan for people who love to travel is all about. Thanks for reading!

     

     
     
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    Financial Advisor David Tuzzolino

    David Tuzzolino, CFA, CFP®, is the Founder and CEO of PathBridge Financial, a firm that specializes in providing comprehensive financial planning and investment management services for clients that are nearing retirement and love to travel.

    It’s Time to Fortify Your Travel Budget, How to Reduce Your Taxes in Retirement, and Otherworldly Landscapes – Links

    A brick pathbridge over a calm stream

    I’m highlighting the fact that travel will explode in the coming years, and with it, prices are sure to follow. Prepare your travel budget now so you can enjoy a seamless transition from cocooning in your home to exploring the world. 


    Retirement

    Your Travel Budget Is About to Implode – Here’s What to Do About It – (PBF)

    How does your retirement budget look? It might not look as good as you think, given the bottled-up demand for travel that will be unleashed when the pandemic eases.

    Retirees – reduce the tax hit – (CNBC)

    The right strategy in retirement can significantly decrease the taxes you pay.


    Travel

    26 Otherworldly Landscapes to Visit – (Conde Nast Traveller)

    You might not be able to visit anytime soon, but one can dream.

    VRBO Trend Report 2021 – (VRBO)

    An informative report  – this is what families are thinking about for 2021 travel. Hint: 82% of families already have travel plans for 2021. Now that’s pent-up demand!

    Round the world in style – (Luxury Travel Advisor)

    5 continents, 28 countries, 72 destinations. This is exactly what I need to forget 2020.

    Did COVID change travel permanently? – (CNN)

    A vaccine may open up the flood gates to bucket-list travel. New technology and ways of thinking about travel may change the experience for a long time; some things will be better, others not.


    If you’d like to subscribe to my newsletter, you can do so below. You’ll also get a PDF that shows you exactly what a comprehensive retirement plan for travelers looks like. Thanks for reading!

     

     
     
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    Financial Advisor David Tuzzolino

    David Tuzzolino, CFA, CFP®, is the Founder and CEO of PathBridge Financial, a firm that specializes in providing comprehensive financial planning and investment management services for clients that are nearing retirement and love to travel.

    Your Travel Budget Is About to Implode – Here’s What to Do About It

    A crying piggy bank is broken open and a travel budget (pennies) lies all around.

    Econ 101

    You remember Econ 101, don’t you? It was that class you took freshman year of college where you sat in an auditorium filled with 500 of your classmates watching a dry professor drone on about widgets while viewing an unending series of graphs. If economics wasn’t your calling in life, you probably forgot most of the material.

    However, if there is one universal lesson that you learned, it’s supply and demand. And this is why your travel budget is about to implode.

    If you’re gearing up for retirement in the next two or three years, it could be incredibly ugly. And even if your ultimate retirement date is far in the future, this economic concept is going to affect your travel plans greatly for the next several years.

    Supply

    COVID-19 has dealt a serious blow to travel infrastructure. Cirium, a travel industry data and analytics company, reports global flight volume is down 54% year over year, and 30% of the worldwide airline fleet is in storage.

    In a September American Hotel & Lodging Association survey, half of the hotel owners stated they were in danger of foreclosure. Popular travel destination and early-pandemic hotspot, New York City, is being especially hard hit. According to the Wall Street Journal, the state of New York could lose 250,000 rooms permanently, which equals about 20% of supply.

    The cruise line industry has been decimated, and nearly all ships are docked.

    Docked, deserted cruise ship

    Industry leader Carnival is reducing its fleet by 18 ships, equivalent to 12% of capacity. It’s uncertain how many of these ships will be purchased and returned to service by other cruise lines and how many will be scrapped. This supply is not coming back anytime soon, either. Carnival has already announced there will be no ship deliveries in 2024 and only one in 2025. After scrambling to keep companies afloat in 2020, it will not be easy for cruise line management teams to jump back into growth mode and order new ships anytime soon. 

    Restaurants are in better shape than many other leisure-related companies given their ability to operate at reduced occupancy and provide delivery, but their struggles are still severe. The National Restaurant Association expects approximately 1 in 6 restaurants in the U.S. to close in 2020. Everyone wants to open a restaurant, right? Will the old adage hold true with 2020 stresses a recent and painful memory?

    This devastation extends to the entire travel industry, and it may continue to get worse as we suffer through a long winter with COVID cases spiking in many places around the world. The good news is several vaccines look promising, and the end might be nearing. But what will remain of the travel industry?

    Demand

    I love to travel, and I miss it tremendously. I find myself reading blogs and watching videos about travel to pass the time while waiting for a vaccine. By the middle of next year, I will be visually vibrating with anticipation. I’m certainly not alone.

    A November survey by Destination Analysts states that 80% of U.S. travelers have tentative trip plans sometime over the next year. And this is before a winter, where the northern part of the country will be in virtual lockdown.

    Globe wearing a surgical mask

    Combine COVID fatigue with an effective vaccine, and you’re going to see an explosion in revenge travel.

    If the pandemic has taught us anything, it’s don’t put off doing the things you love. I think travelers are going to take this to heart in a big way. Not only will they be traveling, but exotic, bucket-list trips will likely move to the front of the line.  

    Cruise lines are already seeing signs of this pent-up demand. In September, Carnival announced that 2021 second-half bookings were at “…the higher end of the historical range…”.

    The exact timing of a travel recovery is uncertain, but it will undoubtedly come when the pandemic is under control. Unfortunately, the COVID-fatigued group of travelers that are finally set free may be in for an unpleasant surprise.  

    Demand Up and Supply Down

    You don’t have to dig out your Econ 101 textbook and a mechanical pencil to figure out what’s going to happen when a flood of travelers descends on a battered leisure industry operating at reduced-capacity. Prices will increase – dramatically.

    Expect to pay more for nearly every component of your vacation. You’ll be competing with other travelers for every flight you book, cruise you schedule, and hotel reservation you make. The days of finding last-minute discounts will be over as soon as safer conditions prevail.

    I don’t see this supply-demand dynamic reverting to normal for years. Sure, new restaurants can be opened in a relatively short amount of time, but will there be a long line of entrepreneurs willing to take the risk after witnessing the COVID carnage?

    Airlines and cruise lines can not turn on a dime. Wikipedia lists over 30 airlines that have entered bankruptcy in 2020. Some of these companies will restructure, but others will cease operations. Airlines that continue to fly are putting planes into storage and may find it uneconomical to return the aircraft to service. Building new planes can take only a few weeks, but the industry backlog could grow rapidly with an increase in demand. Building a new ship can take years, and larger vessels cost over a billion dollars.

    The crush of travelers released from COVID hell will run full speed into a reeling travel industry. Prices will spike. It may take some time for these companies to heal, and a rush to increase capacity is unlikely. The travel industry will enjoy robust pricing (deservedly so given their recent pain), and your vacations will cost more. There will come a time when entrepreneurs increase capacity to meet this high-margin demand, but gun-shy business owners may be slow to react.

    Solution

    It’s time to take a hard look at your travel budget. Does it still make sense? Will you be able to afford the elevated prices that could last two to three years? If you’re like me and refuse to give up your travel dreams, here’s what you need to do.

    Save more money. It’s time to start funneling more money into your travel budget. If you’ve been fortunate enough to keep your job and are working from home, you’ve likely decreased spending on dining out, commuting, entertainment, etc. Earmark at least some of your savings for travel, and you’ll be prepared for higher prices.

    Money being placed in a pink piggy bank

    Consider less-popular destinations. Resist the temptation to join the masses at tourist hotspots. Sure, you might want to show off your newly-gained immunity by mingling with large crowds, but your travel budget will suffer. Less-touristy destinations will allow your dollar to go further.

    Book your travel far in advance. Many businesses are offering fully refundable options. Take advantage of these and book your trip early. Prices should be lower this winter, given an uncertain future. Even if you’re unsure of the timeline for a vaccine and a return to safe travel, feel free to book a vacation as long as you’re guaranteed a full refund if you need to cancel. Make sure to read the fine print so that you completely understand the cancellation policy.

    Summary

    Studies have shown that the simple act of planning a trip can lift your spirits. So, don’t let the current pandemic stop you from dreaming about your future travels. Be proactive. Consider less-trendy destinations and increase your savings to fortify your travel budget against a more expensive travel-future. If you prepare now, when things clear, your biggest decision will be where to go on vacation, not how to afford it.

    Need some inspiration? Intrepid Travel has put together a wonderful list of 9 mind-blowing travel videos. Enjoy!


    Enjoy what you just read? If so, you can subscribe to my newsletter below. You’ll also receive a PDF that shows you exactly what a comprehensive retirement plan for travelers looks like. Thanks for reading!

     

     
     
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    Financial Advisor David Tuzzolino

     

    David Tuzzolino, CFA, CFP®, is the Founder and CEO of PathBridge Financial, a firm that specializes in providing comprehensive financial planning and investment management services for clients that are nearing retirement and love to travel.

    10 Amazing Retirement Locations, My Podcast Debut, and Living the Hallmark Christmas Movie Experience – Links

    Leaf covered path bridge

    My mind is definitely wandering toward travel if these links are any indication. I think it’s the knowledge that winter is upon us up north and I will be seeing way more of the inside of my home. This dread coupled with the promise of a vaccine before too long has me thinking about the next trip. What I’ve been reading:


    Retirement

    Find out where you measure up when it comes to 401k savings – (U.S. News & World Report)

    If you reach $1 million in your 401k by the time you retire, you’ll be ahead of the pack by many multiples. Start saving aggressively, and increase the amount every year. If you can meet the 401k max, you’ll be in good shape.

     

    The top 10 countries to retire in – (Business Insider)

    Have you ever dreamed about retiring overseas? It’s never too early to start scoping out potential locations.


    Investments

    I had the privilege of joining Kyle Hill, CFP®, on his podcast – Personal Finance from the Hill-Top. We talk about the basics of stocks, bonds, diversification, and more.


    Travel

    It’s going to be a long winter – embrace it! – (The Washington Post)

    “Friluftsliv…translates to open-air living and exemplifies the tradition of making time outdoors part of daily life — whatever the season.” Take it from the Norwegians, because they know how to do cold. When you get tired of the indoors this winter, make the outdoors your friend.

    19 hotels you’ll want to book just for the bathtub – (The Points Guy)

    I haven’t take a bath in 40 years. Yes, I said it! I’m solidly in the shower camp, but I could change my mind if I had these views.

    Towns to visit in Pennsylvania if you want to feel as if you’ve been dropped into a Hallmark Christmas Movie – (Travel Awaits)

    This might not be the best year for a Hallmark Christmas Movie experience, but save this link somewhere special, and when travel conditions improve, you’ll have a Christmas destination mapped out.


    If you’d like to subscribe to my newsletter, you can do so below. You’ll also get a PDF that shows you exactly what a comprehensive retirement plan for travelers looks like. Thanks for reading!

     

     
     
  • *Privacy policy: your email address is safe, and you will never receive SPAM.

     

    Financial Advisor David Tuzzolino

    David Tuzzolino, CFA, CFP®, is the Founder and CEO of PathBridge Financial, a firm that specializes in providing comprehensive financial planning and investment management services for clients that are nearing retirement and love to travel.

    How Much Do You Need to Retire (and Travel), What Makes You Happy in Retirement, and Soup – Links

    Path bridge through the woods with leaves turning colors

    Now that Halloween and Election Day have passed, is it too early to put up the Christmas tree? The old stand-by of waiting until Thanksgiving is over doesn’t seem to make sense in 2020. 

    The most common question I hear from people who reach out to my firm is – “How much do I need to retire?” I walk you through the process for do-it-yourselfers who want a quick answer. Also included below, the best of what I’ve been reading on retirement, travel, and, yes, soup. 


    Retirement

    How Much Do I Need to Retire (and Travel Like Royalty)? – (PBF)

    I walk you through a quick-and-dirty way of coming up with your number, using readily available online retirement calculators. If you’ve ever asked yourself – “How much do I need to retire?”, this is the article for you. If you enjoy traveling, I also discuss why it’s crucial to incorporate travel expenses into your budget before and after retirement.

    Over 55? Your retirement is more uncertain than ever before – (Forbes)

    It’s a warm and fuzzy feeling when you have a well-developed comprehensive financial plan. That is until your age 65 retirement suddenly, and without your consent, is forced upon you a decade early. Moral: always plan for retirement conservatively, erring on the side of an earlier than expected retirement. You may not have to retire at 55, but it’s nice to be prepared if it’s forced upon you.

    What makes you happy in retirement according to financial advisors? – (U.S. News & World Report)

    No earth-shattering surprises here, but a good reminder that it’s a mix of financial and social factors that will make you happy in retirement. If you ignore either side, your happiness will likely suffer.


    Travel

    Holiday Travel Report – (ThePointsGuy)

    Are you traveling for the holidays? Mix a little Mad Max with ER. Ok, it’s probably not going to be that bad, but I have to imagine stress will be elevated even more than usual, and everyone will be concerned about health.

    Financial Independence / Abbreviated Retirement – (New York Pilot)

    Think mini-retirement coupled with life-changing adventure. I believe we’re going to see a huge spike in this once the coronavirus is under control. We are all learning the valuable lesson of not waiting to do things you love. Do it now; you might not have a second chance.


    Soup

    26 soup ideas for the upcoming winter from around the world – (MSN)

    It’s that time of year! Are you ready to get your soup on! If you’re looking for ideas, here are 26 recipes to keep you warm.


    If you’d like to subscribe to my newsletter, you can do so below. You’ll also get a PDF that shows you exactly what a comprehensive retirement plan for travelers looks like. Thanks for reading!

     

     
     
  • *Privacy policy: your email address is safe, and you will never receive SPAM.

     

    Financial Advisor David Tuzzolino

    David Tuzzolino, CFA, CFP®, is the Founder and CEO of PathBridge Financial, a firm that specializes in providing comprehensive financial planning and investment management services for clients that are nearing retirement and love to travel.

    How Much Do I Need to Retire (and Travel Like Royalty)?

    A white castle rises out of the forest, clouds in a blue sky

    A Simple Retirement Calculator

    One of the most common questions in planning for retirement is: “How Much Do I Need to Retire?” And since I specialize in working with travelers, travel always comes up. The question may be, how do I travel like royalty, a rock star, or just, well?

    The answer is incredibly simple: “It depends.”

    You can start with a quick-and-dirty analysis that won’t take you more than fifteen minutes. NerdWallet.com has a solid, basic retirement calculator here, but the following concepts will work with any calculator you use.

    The initial inputs are straightforward: age, income, current savings, and the amount you save every month. The retirement calculator then illustrates how much you will have at retirement compared to how much you will need to retire. Simple, and not a bad start, but there are ways to refine your results further.

    On the NerdWallet calculator, click “Optional.” Additional inputs appear.

    The first input, “Monthly retirement spending,” is automatically set to use 70% of your pre-retirement income. A common rule-of-thumb is you’ll spend approximately 70-80% of your pre-retirement income once you retire. However, I have found this number can be low, especially when working with clients who expect to travel extensively. Consider bumping this number up to 90-100% if you’re doing a quick calculation. If you’d like to refine this number, put together a detailed budget for retirement, keeping in mind the significant changes that can occur when you tackle your bucket list and medical expenses grow.

    The next input is “Other expected income.” This includes Social Security, pensions, annuities, and other income sources you may have in retirement.

    The default age of retirement is set to 67. Change this to your desired retirement age. Also, have some fun with it. Increase your age, lower it, and see how it affects the numbers. Your final number should be conservative, perhaps a few years before you’d like to retire. This will build in some extra cushion to your projections. Many people retire earlier than they expected due to layoffs, early retirement packages, or health issues.

    Life expectancy is automatically set to 95, a reasonable number. However, maybe you have a family where everyone sails past 100 in excellent health. You can always make adjustments, and the bigger the number, the more conservative your estimates will be.

    The “Investment rate of return” default is 6% pre-retirement and 5% after retirement. These rates of return assume your portfolio will become more conservative post-retirement. These are reasonable estimates, but you can adjust the pre-retirement return, either up or down, to see how your results change. Just be realistic and don’t stray too far to the upside.

    How does it look? Are you on track? If you are, fantastic!

    You’re not quite done, however. Play with the numbers and create some worst-case scenarios. What happens if you have to spend dramatically more than you anticipated? How do you look if your investment returns are lower than expected? If you are still on track to retire, try nudging down your retirement age. You may not want to retire early, but it’s nice to know the option exists.

    More Detail

    The quick-and-dirty option above is acceptable for some. However, if your life is a little more complicated or you want to get more granular, consider the information below.

    Expenses

    Let’s refine the “Monthly retirement spending” part of this model.

    Put together a detailed list of your expenditures. There are hundreds of budget spreadsheets online. Find one that does a good job of breaking out spending into categories that will help you organize your expenses. If you’d like the spreadsheet that I use with my clients, please send me an email at david@pathbridgefinancial.com. Double-check your spreadsheet with bank statements. Does the spreadsheet expense total equal what is coming out of your bank accounts? If not, figure out why and adjust.

    Next, focus on retirement. Make a copy of your spreadsheet and start reducing or eliminating expenses that might change once you’re retired. What commuting expenses will go away? Will you continue to need a second car? Will your mortgage be paid off? Do you have life insurance policies that you will no longer need?

    Unfortunately, not all expenses will decrease. Health care costs will grow as you age. Projections vary greatly, but a 65-year-old couple should expect to spend approximately $11,000 a year on health care in retirement. Fidelity Investments has a health care cost calculator that will take you about three minutes to fill out.

    Now, the good stuff. In retirement, travel and leisure often increases in frequency and duration. Dream vacations to exotic locations, the purchase of an RV or boat, a summer in Tuscany, the lake-cabin you’ve always dreamed about – let your mind wander. How much would you like to spend on travel? Go into as much detail as possible.

    How you like to travel will affect your travel budget. Do you prefer 5-star luxury resorts on the other side of the world and dining at Michelin-star restaurants?

    A chef uses tweezers to complete a fine dining meal

    Or do you find most of your vacations are within driving distance of your home where you stay with friends, and you pride yourself on scouring farmers’ markets to prepare home-cooked meals? Odds are you’re somewhere in the middle, but dive into your travel deeply and try to put together a realistic travel budget.

    It’s easy to get caught up in dreaming about once-in-a-lifetime trips, but there’s something that most people find even more important – family. You’re likely to have much more leisure time in retirement, which usually results in more family time. How many trips are you going to take to visit your loved ones? Grandchildren especially can be an irresistible draw. Don’t forget to add these trips to your retirement travel budget.

    Don’t hold back when estimating expenses. We’re talking about traveling like royalty here! Err on the high side, and don’t be afraid to include some extravagant extras. It’s better to reach, and save some extra money, then underestimate and not have enough. You can always reduce some expenses or eliminate some of those extras when the time comes. A key concept when planning for travel in retirement – be flexible.

    Income

    If you’re going to adjust the “Other expected income” amount in the calculator, keep in mind that this will increase income every year between retirement and death – a limitation of this model.

    In reality, there are ways to increase income for a portion of retirement, including part-time employment or renting out a home, but these are unlikely to last your entire lifetime. There are also one-time income sources that might make a huge difference, such as selling a house or an inheritance. If you are running into too many one-offs, consider consulting a financial advisor who has software that can accommodate any non-standard inputs. I discuss this later in the article.

    The Answer

    By now, you should have a reasonable answer to your question: “How Much Do I Need to Retire (and Travel Like Royalty)?”

    You should have a good idea of how much you need and how your current situation looks in comparison. Are you coming up short? The best way to address this is to save more if you can. Even a few hundred dollars each month can be meaningful if you adjust course early.

    If saving more is impossible, nudge your retirement age higher. Working an extra year or two might be the solution to your shortfall. Spending less in retirement will stretch your nest egg as well. Remember, being flexible is key.

    However, don’t be tempted to increase the investment rate of return just to meet your retirement goals. It’s conservative for a reason, and you should keep it that way. A balanced portfolio of stocks and bonds isn’t going to return 15% a year over the long-run, just because the calculator allows the input.

    retirement travel illustrated by a tablet and statements

    If you’re unsure of what rate of return to use, Vanguard has a website that illustrates the average investment return for stock/bond portfolios over 90+ years. There are no guarantees that the future will deliver the same results, but it’s an excellent place to start. Remember, it makes sense to be conservative.

    You May Need a Financial Advisor

    There are many reasons you may decide to contact a financial advisor. The most important reason – your question: “How Much Do I Need to Retire (and Travel Like Royalty)?” was not answered adequately using online resources. Also, consider the following:

    • Would you prefer more detail in your retirement projections?
    • Does your situation involve a level of complexity that an online calculator cannot handle?
    • Would you feel more comfortable talking through your important retirement decisions?

    If you answered yes to any of these questions, you might want to talk with a financial advisor. Where do you start? I recommend reading this article from the CFP Board: “Ten Questions to Ask Your Financial Advisor.” Or, if you’d prefer a little humor with your advisor search, please take a look at my article: “How to Spot a Terrible Financial Advisor You Can’t Trust.”

    Now that you’re armed with what to look for in a financial advisor, I recommend the following directories:

    Find a CFP® Professional

    The National Association of Personal Financial Advisors (NAPFA) Find an Advisor

    Summary

    The answer to the question, “How Much Do I Need to Retire (and Travel Like Royalty)?” is – it depends. It depends on your wants, needs, and resources. Whether you tackle this question with an online calculator or with a financial advisor, make sure you’re comfortable with the results and have a clear understanding of what it will take to achieve success.


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    Financial Advisor David Tuzzolino

     

    David Tuzzolino, CFA, CFP®, is the Founder and CEO of PathBridge Financial, a firm that specializes in providing comprehensive financial planning and investment management services for clients that are nearing retirement and love to travel.

    A Haunted Hotel, How to Deal With an Unexpected Retirement, and 34 of the Best Travel Podcasts – Links

    The figure of death walks across a pathbridge

    The next week is going to be action-packed with Halloween and the election. Take some time this weekend, turn off the onslaught of political ads, and enjoy the first full moon in 76 years! Enjoy it while you can, because you’ll be waiting for nineteen years to see the next one. Happy Halloween!


    Retirement

    “Paying too much attention to politics can be harmful to your wealth.” – (Forbes)

    Elections can be stressful times, and the stock market has a history of volatility during times of perceived uncertainty. However, if you’re investing for the long haul, you have nothing to worry about.


    Unexpected Retirement – (Vanguard)

    Unfortunately, many people don’t work as long as they had planned – especially given today’s coronavirus-fueled layoffs. Vanguard has put together a solid list of steps to take if this happens to you.


    Early Retirement – Steps to Take – (Forbes)

    Planning is easier when it’s broken into two phases – pre and post-retirement.


    Travel

    Staying in a Haunted Hotel – The Terror and the Humor – (PBF)

    Happy Halloween! Ever stay in a haunted hotel all alone? This is my story.


    34 of the best travel podcasts – (Travel Massive)

    If you’re looking for a travel podcast, I got you covered!


    Would you fly if everyone on the plane is tested for COVID before takeoff? – (CNBC)

    A vaccine would be fantastic, but small things like rapid-results testing add up and might be just as important to getting life back to normal.


    If you’d like to subscribe to my newsletter, you can do so below. You’ll also get a PDF that shows you exactly what a comprehensive retirement plan for travelers looks like. Thanks for reading!

     

     
     
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    Financial Advisor David Tuzzolino

    David Tuzzolino, CFA, CFP®, is the Founder and CEO of PathBridge Financial, a firm that specializes in providing comprehensive financial planning and investment management services for clients that are nearing retirement and love to travel.

    Staying in a Haunted Hotel – The Terror and the Humor

    Haunted Hotel with large orange moon

    It’s a cold, blustery October day in Pennsylvania, a few weeks before Halloween. Lori and I enter Hotel Saxonburg under a swinging sign that proudly reads: Fine Dining & Elegant Rooms Since 1832.  The 200-year old hotel has charm, history, and an unsettling reputation for being haunted. We are about to spend the night here – completely alone! (Cue scary clap of thunder.)

    When I started this blog, I wanted to include some of my 2020 travel adventures. The year looked promising with trips to Budapest, Vienna, Bratislava, and Alaska planned. Not to ruin the ending, but – all canceled.

    Never fear, however! I dug up a story from my past with special significance as Halloween is only a few days away. A haunted hotel, paired with a windy, snow-blown night. What could be better? I hope you enjoy.

    Lori and I were in Saxonburg, PA, to take a food tour. It was a birthday present from Lori, who knows me well. Mix food with a little history, and I’m pretty darn happy.

    A brief history before I continue – Saxonburg was founded by John Augustus Roebling.

    John Augustus Roebling designer of the Brooklyn Bridge

    He was an engineer turned farmer who wanted to build a German settlement in the western part of Pennsylvania. It was a bad time to be a farmer, and the Panic of 1837 pushed Roebling back into engineering, where his claim to fame was designing the Brooklyn Bridge.

    A black Brooklyn Bridge outlined by an orange sky and moon

    Unfortunately, he didn’t live to see it built. He died from tetanus after his toes were crushed by a ferry and then amputated—a scary story in itself.

    Back to Hotel Saxonburg.

    We are led up the stairs to our elegant room by the friendly manager. The hotel’s second floor consists of six bedrooms, each decorated to preserve an 1800’s feel. Historic? Yes. A little creepy? You bet!

    As we walk down the corridor to our room, I notice that each room’s door is wide open, giving us a view of the dark interiors. Each room looks like it would have nearly 200 years ago. I half expect to see guests sitting on the antique beds, dressed in 1800’s garb, but they are empty.

    We then receive news that makes my blood turn cold and raises the hair on the back of my neck. There is a communal bathroom. (Cue scary clap of thunder.)

    The manager tells us that we will be the only guests in the hotel during the night. And once the bar staff leaves at 2 am, we will be all alone in the building.

    We spend the evening dining out and then return to the hotel bar where a friend’s band is playing – a strange coincidence. All of our cares melt away as we enjoy the festive atmosphere in the warm, cozy room.

    The band finishes up about midnight, and the bar starts to empty. We decide to call it a night and walk up the stairs to our room. I try to suppress the thoughts that keep entering my head – rumor has it that the Hotel Saxonburg is haunted.

    Throughout the years, there have been eerie reports of objects moving mysteriously, names being called by an unknown voice, and ghostly sightings of people dressed in clothing from the 1800s. The hotel has even been the subject of an investigation by Steel Town Paranormal. The following video was filmed in the Hotel Saxonburg as the group tried to unearth evidence of a paranormal presence. Trust me. You have to watch this, and it’s less than 90 seconds long. 

    Terrifying! After watching this video, we made sure to keep flirtation to a minimum during our trip and create an especially dour atmosphere.

    Late in the evening, one of the scariest moments of our stay occurs. Lori exits the bathroom after getting ready for bed and walks across the hall to our room. She feels a presence. Out of the corner of her eye, she sees a dark figure in one of the empty hotel rooms, slowly rocking back and forth in an antique chair. A blood-curdling scream rises in the back of her throat until she realizes it’s just me messing with her. Ha! Sorry, Lori.

    I awake at three in the morning, and I am greeted by silence. The buzz from downstairs is gone. We are the only souls, I mean people, left in the hotel.

    The silence is all-encompassing, and I have to go to the bathroom.

    I arise from the warm bed and shuffle toward the door. I stumble into a chair that has been wedged under the doorknob. I later find out this was Lori’s work, but at the moment, my sleepy mind wonders if this was a ghostly act.

    I am in the bathroom, and I look out the window. Snow is building up on the frame, and wind rattles the glass. There is a dripping sound from an unknown source.

    I wash my hands, turn off the light, and enter the hallway.

    A long scary hallway
    Not the actual hallway, buy a close approximation.

    My eyes struggle to adjust to the darkness.

    There’s a light switch somewhere, but I can’t find it.

    The floorboards creak.

    The wind’s howl intensifies.

    I cross the hall and reach out for the doorknob to our room.

    To my right is the long hall filled with open doors.

    I don’t believe in spirits, ghosts, or apparitions, but…

    If I was ever going to have a run-in, it would be now.

    My heartbeat picks up.

    I slowly turn my head.

    And glance down the hall.

    Darkness.

    Silence.

    Nothing.

    I sigh with relief and enter our room, climb into bed, and drift off to sleep.

    The Hotel Saxonburg may be haunted, but we were spared during our stay. However, the hotel is on the creepy side when you’re the only guests in a 200-year-old building on a windy, snowy night. I will always look back fondly on our trip to Saxonburg. And while I won’t avoid haunted hotels in the future, I will do my best to avoid repeating the most terrifying part of our adventure – booking a room with a communal bathroom! (Cue scary clap of thunder.)

    I hope everyone has a – Happy Halloween!


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    Financial Advisor David Tuzzolino

     

    David Tuzzolino, CFA, CFP®, is the Founder and CEO of PathBridge Financial, a firm that specializes in providing comprehensive financial planning and investment management services for clients that are nearing retirement and love to travel.

    The Problem with Living on Social Security Alone, Longevity and Retirement Savings Disconnect, and Missing the Airport – Links

    A wooden bridge spans a small brook with colorful trees in the background

    I know you have other things on your mind right now, but don’t forget about retirement planning. If your only income is from social security, it’s going to be a lean ride.

    Are you missing the airport? Yeah, me too. There’s something about the energy, the potential, the anticipation of the next adventure.


    Retirement

    Can you live on social security alone? – (USA Today)

    Of course, it depends. But if you do, don’t expect much extravagance in your life. How you can supplement your retirement savings.


    The retirement savings disconnect – (Barrons)

    “Americans’ optimism about their longevity comes at a time when planning for retirement has become more complex.”

    Along with this longevity comes a healthier and more active retirement. Make sure your savings keep up with this new reality.


    Travel

    A lifelong traveler takes a journey inward – (The Washington Post)

    I hope that we will be able to travel, interact with, and witness the world again shortly. When we do, it will certainly seem strange. But when has travel not been strange?


    There’s a second wave of COVID-19, so be careful where you travel – (Chriselliotts.com)

    Use common sense and avoid crowds. The article contains some useful links if you’re researching a location. It’s going to be a long winter, folks.


    Missing the airport – (The Points Guy)

    I miss the buzz of an airport. I miss the mass of people in motion to see loved ones or going on vacation. I miss the anticipation of far-flung destinations. Now, if I could only get there without going through a metal detector.  


    If you’d like to subscribe to my newsletter, you can do so below. You’ll also get a PDF that shows you exactly what a comprehensive retirement plan for travelers looks like. Thanks for reading!

     

     
     
  • *Privacy policy: your email address is safe, and you will never receive SPAM.

     

    Financial Advisor David Tuzzolino

    David Tuzzolino, CFA, CFP®, is the Founder and CEO of PathBridge Financial, a firm that specializes in providing comprehensive financial planning and investment management services for clients that are nearing retirement and love to travel.