Vacation is a time to visit your favorite summer spots, hit the beach and maybe catch up with far-flung family members. But what about retirement planning? Should your vacation include some of that, too?
That would be a good idea, say some finance experts. “Thinking about your retirement might sound like the last thing that should be on your mind,” says Kate Ryan, a wealth management advisor with New York City-based financial services company TIAA, “but there are small things you can do while on vacation that can have a big positive impact on your long-term plans.”
[See: 10 Images That Will Motivate You to Save for Retirement.]
Here are several ways you can use your time off to prepare for what will happen once you leave the workforce.
Use travel time to reflect on retirement goals. Brian D. White, president of Century Financial in Memphis, Tennessee, is sympathetic to those who don’t want to spend their limited vacation time worrying about retirement. However, he says there is a simple way for spouses to use a vacation to get on the same page when it comes to retirement goals.
It’s a strategy White and his wife use when they are on road trips. They simply discuss their goals and dreams for the future while the person in the passenger seat takes notes. It’s an easy, low-pressure way to use otherwise idle time productively. This planning time isn’t about crunching numbers but rather about dreaming for the future. It’s something that can be done in the car, on a plane or sitting by a dock.
Once home, a couple can use their notes to take concrete steps. “Take that dream and then walk backward,” White says. Couples should start with the end goal in mind and then determine what steps or milestones are needed to reach it. Meeting with a professional planner can help.
[Read: How to Get Reliable Retirement Planning Advice.]
Scout out possible retirement locales. It’s not unusual for retirees to move elsewhere in the country for their golden years. “The hardest part is just finding what that area is,” White says.
Vacations can be a prime opportunity to scout out different states and communities. Once the general location has been settled on, people can use their vacation time to check out area amenities, investigate the local health care system or even begin visiting potential homes.
To get a feel for how the locals live, Ryan recommends people skip the hotels and commercial district for their lodgings. “Consider staying in a rented home or condo through Airbnb, VRBO or direct through property management companies,” she says.
Explore local amenities close to home. Pre-retirees who won’t be moving can use their time off to develop a plan for their retirement living. “A vacation can be a perfect time to try out new activities or apply your skills in new ways,” Ryan says.
Volunteer for a nonprofit, visit community centers or explore what else your area offers seniors. Having a list of anticipated activities may help smooth the transition from the workforce.
[See: How to Reduce Your Tax Bill By Saving for Retirement.]
Make appointments you’ve been neglecting. A vacation is also a good time to get reacquainted with your accountant or financial planner. The timing can be perfect for those who normally dread the thought of having these financial discussions.
Those returning from a vacation may have had time to dream big about their future and return motivated to follow up on their plans. “When I come home [from vacation], my batteries are recharged,” White says. That makes this an optimal time to discuss the heavy topic of retirement with a clear head.
Take up a side hustle to pad retirement savings. If you’re really ambitious, you could use your vacation time to work on a second income stream. William Curtis, an associate with the real estate firm NPL Group in San Antonio, has several clients doing just that. “They’ll find a home [in need of renovations] and take a week or two off to work on it,” he says. Then, they sell it for a profit and look for another fixer-upper to start the process again.
The goal for these clients is to eventually have enough money to buy a rental property for cash. That property will then provide an additional source of income in retirement. It’s an unorthodox approach to retirement planning and one that shouldn’t be entered into lightly. “You could do it with the right team in place,” Curtis says. That means working with someone who knows the real estate market well. Otherwise, buying and selling fixer-uppers can quickly become a financial nightmare. “I’ve seen way too many would-be flippers come in and spend way too much,” he says.
Flipping houses requires substantial time and energy. However, you might be able to add to your nest egg with a different side job that makes use of your talents or interests. It could be anything from making jewelry to sell on Etsy to pet-sitting dogs and cats while neighbors are away.
A vacation is your time to relax, but that doesn’t mean you can’t also cross a few items off your to-do list on the way to the beach. From having a deep discussion with your spouse to monetizing a hobby, don’t miss the chance to make the most of your time away from the daily grind.
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