Traveling the world is a part of many people’s retirement plan. As we head into peak summer travel season – with the pandemic largely in the rearview mirror – many retirees are looking forward to being out on the road vacationing. Jetting off to different parts of the world may sound extravagant, but travel does not need to be expensive or drain your savings. Here are some ways to cut down on your travel expenses.
- Take advantage of a strong dollar. In February, the ICE U.S. Dollar Index, which compares the dollar against a variety of the world’s most recognized currencies, rose to its highest level since July 2020. The dollar is expected to continue rising throughout the year. A strong dollar gives U.S. travelers more buying power abroad.
- Watch airfares. It’s a good idea to plan your trip as far in advance as possible. Airlines in the U.S. will open their schedule about 11 months out, but you don’t want to book your tickets that far in advance. Instead, start researching prices for when you want to travel so that you’ll recognize a good deal when you see one.
- Use a different airport. It’s tempting to simply book your entire trip with one airline, leaving from the airport that’s closest to home, but that may not be your cheapest option. In fact, the cheapest airfares aren’t always from large international airports. Airlines sometimes cut prices to a specific destination from smaller international airports in secondary U.S. cities. Pay attention to an airline’s hub cities, where the carrier concentrates their flight operations, as that can affect pricing. Prices are often higher for a specific carrier’s hub cities because the airline dominates service there. Other airlines, however, sometimes slash prices on popular routes from the competitor’s hub to steal its business.
- Adopt a flexible schedule. Freed from the tyranny of the school calendar and the workweek, retirees can fly at off-peak times and days when prices are lower, typically a Tuesday or Wednesday. Before the pandemic, business travelers flooded airports on Sunday and Thursday evenings, making those flights more expensive. That has lessened to a degree.
- Avoid unnecessary fees. Some credit cards charge foreign transaction fees, typically around 3% of every purchase made outside the U.S. If your card charges a fee, switch to one that doesn’t. You could also be charged with fees for using an ATM abroad, including one from the foreign bank that owns the machine. Meanwhile your bank in the U.S. can charge a foreign ATM withdrawal fee as well as a foreign ATM transaction fee. Ask your bank what it charges and if you can help avoid those fees.
- Get rewarded for spending. Wouldn’t it be nice if the money you spent on travel generated a return for you? It can depend on your credit card. Some rewards cards let you earn points or miles that you can redeem to pay for travel expenses every time you swipe your card. Look for one with no annual fee, through the trade-off may be fewer rewards than a card with a fee.
Today, there are many options for you to take advantage of. Do your homework and be prepared to act decisively. Bon voyage!