Don’t wait until retirement to start traveling. Instead, take the financial steps needed to live the life of adventure you envision!
The ability to travel and explore the world without obligation is often seen as the epitome of reaching retirement years, years filled with discovering new places, departing on a whim, and vacationing leisurely without timelines or restrictions.
Yet, for many, the idea of creating a life of leisure and travel feels too daunting to attain before we have stepped away from our working years. The reality is most people have not created the financial cushion they need to realize their travel dreams. Instead, they find themselves caught in the cycle of building careers, raising families, and putting off those sought-after dreams.
While there is great value in staying the course in life, there is also immense value in setting travel goals and putting a plan in place to accumulate the financial wealth needed to travel the world before retirement. After all, life changes in a moment, and the years you have spent dreaming about retirement may take a turn due to unforeseen health challenges, future financial concerns, and family obligations.
The time to travel truly is now, as tomorrow is never promised. And the time to start saving to make it happen is today. Following are a few steps you can take to gain control of your financial future and start your travel adventures well before your retirement years:
1. Schedule time with your financial advisor to get a big picture of your current financial status
Financial planning should always be an ongoing process. Meeting with your financial advisor to understand the big picture of your current financial status allows you to assess your future financial goals and revise your investment strategy to meet them. Start by talking with your advisor about whether or not your current investment strategies meet your long-term financial and travel goals. If they don’t, discuss ways to increase your financial wealth through current investments and tweaks to your investment profile. Even if you are setting up a plan now to see gains in the future, you will be one step closer to seeing your travel goals come to fruition.
2. Assess what steps can be taken to further reduce debt and accumulate additional income with your current book of assets
Take a very close look at your current debt-to-savings ratio and put a plan in place to work down your debt in significant ways. For example, you may find you have high-interest-rate credit cards. Assess your interest rates across all cards and consider consolidating cards and requesting a lower rate if you have showcased a steady payment history. Depending on current home interest rates, you might also find it an advantageous time to refinance your home and realize monthly savings. As you reduce your debt, put the income you have used to pay down these obligations towards interest earnings savings and investing accounts. Make your money work smarter for you in a focused and diligent way to free up your disposable income.
3. Spend less, save more, and manage your debt
Think logically about your spending habits and if they are getting you any closer to your travel dreams. For example, do you overspend on food, clothing, and impulse purchases that could be reduced to allow extra income to go into savings or investments? To aid in this process, you can set up personal spending trackers to gain greater awareness of your patterns and where you can save. You can also set up interest earnings savings accounts, have a portion of your paycheck immediately funnel to a savings account, and even increase contributions to your 401(k) or a Roth 401(k). With a goal of setting aside 10% to 15% of your income, you will be well on your way to establishing accessible financial wealth to use for pre-retirement travel.
4. Assess your tax filings
Meet with your tax accountant and determine if you are filing in the most advantageous way to maximize your income and assets. A tax expert can often determine if you are missing filings and can help you adjust your return to minimize how much is being taken out of your current income. You can also assess how to maximize your tax return to be put towards future investment and savings opportunities. For example, you may have money sitting in a traditional IRA or 401(k) without considering maximizing it for tax benefits. However, if you have a large portion of your retirement savings in a 401(k), you may want to consider moving it over to a Roth 401(k) to have the ability to withdraw funds as needed with fewer tax implications.
5. Reduce your personal assets
Another strategy you may want to consider is to reduce your current assets to free up immediate income. For example, you may be at a life stage where downsizing a home, investment properties, or cars is appropriate and would free up immediate income. In turn, you can use this income towards travel or other investments you may want to make to continue adding funds to future savings. Should you own a business or another asset providing substantial income and funds, you may also consider if it’s time to part ways with that investment to transition to a more leisurely life and allow you to travel and minimize your current obligations.
Now that you have a plan in place to maximize your current spending habits, you have your debt reduction plan under control, and you have considered how to make the most of your tax filings and assets, start planning your next big trip and readying for the life of adventure and travel you’ve imagined. You won’t regret taking positive financial steps to live life fully now, expand your horizons, and add incredible memories to your roadmap of life!
At Paramount Wealth, our mission is to take you beyond the basics and help you have the freedom to live your most inspired life. Whether your goal is to live a life of abundance or help others by paying it forward, we invite you to contact us today to schedule time with an advisor to design your wealth and support your freedom.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision.
The attached information was developed by Threaded Marketing Group, an independent third party. Any opinions are those of the author and not necessarily Raymond James. Any information provided is for informational purposes only and does not constitute a recommendation.
There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or a loss regardless of the strategy selected. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Roth 401(k) plans are long-term retirement savings vehicles. Contributions to a Roth 401(k) are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Unlike Roth IRAs, Roth 401(k) participants are subject to required minimum distributions at age 72 (70 ½ if you reach 70 ½ before January 1, 2020).
Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.