First post here, I figured I had to register to help out an expat to be. I'm an American expat in Hong Kong so I went through a similar experience a couple years back. I can't speak specifically to living in Italy, though I traveled there a while back and Bolzano is beautiful, but I can share what's helped me in Hong Kong.
Are you going to be paid in USD or EUR while you're abroad? If you're paid in euros then you won't have a problem using ATM's there, just open a local bank account. You can just leave your USD savings in the States and worry about that when you get back and spend your euros while you're there, leaving less to convert back to USD eventually. If you're paid in USD you'll obviously need euros to spend, which is what my situation is in HK. My comments about Schwab and the BoA Travel Rewards card might be able to help you a lot there.
On bank accounts, do your best to open a Schwab bank account before you leave. They have no ATM fees anywhere in the world and will reimburse fees charged by other banks. I've used them for two years in Hong Kong and throughout Asia with no problems, though the cards are only accepted by machines that take Visa debit cards. I can't remember the standards in Europe, but I just recently used the cards in Switzerland. Hmmm actually to be more specific, sometimes the machines are finicky and don't accept my card, but I've always been able to find a bank in the city that will take the card.
On credit cards, there are a few American banks that offer no foreign transaction fees. Capital One doesn't have any foreign transaction fees on any of their credit cards, but they gave me an absurdly small limit even though I basically have perfect credit and a high income. However, Bank of America has a Travel Rewards card that has no foreign transaction fees and effectively 1.5% cash back (technically a travel reimbursement, but if you're living abroad using that up clearly won't be a problem). You can get 1.65% cash back if you have a BoA checking account too, I believe.
Regarding travel, I say you should definitely do it. I've been to about 10 countries since moving to HK and don't regret anything I've spent. You can travel frugally in Europe if you try to though, I mean I backpacked Europe for 3 months on $50/day. Eastern Europe is cheaper, but even the major cities in Western Europe have hostels that are cheap. It's been 8 years since I've backpacked so I'm older and my standards have gone up slightly, so when I travel by myself I get the single room in a hostel instead of a dorm. That's my way of splurging.
Regarding retirement accounts, it's pretty tricky. I believe you have to have AGI > 0 to contribute to a Roth, so if you're taking the Foreign Earned Income Exclusion (as you likely will be) you won't be able to contribute to an IRA unless you have income that exceeds the FEIE + IRA contribution (capped at $5500 of course). However, your FEIE is added back to your AGI to calculate your MAGI to determine income limits for Roth IRA contributions, so there is only a very narrow band where you can make frontdoor Roth IRA contributions. My wife and I are going the backdoor Roth IRA route. However, I don't pretend to be a tax professional, so definitely research more on this part.
Best of luck with the move!
