Right now I think we will need $40K a year to retire and this will go down as we grow older/less active. I used the Ultimate Retirement Calculator and plugged in that our needs would go down 10% every 10 years (which would bring me at worst to about $25K when I'm old and can't do anything).
We love finding the most cost-effective way to have the most fun.
For those who have/are planning to retire early and travel extensively, how much do you budget for total expenses annually? I know there is no hard and fast number and everything depends...but I am looking for inspiration and some ballpark ideas of what we should shoot for.
First things first. Start tracking all of your expenses and how much you're spending. This will give you a much better idea of how much you'll need per year. There's a reasonably large difference in the amount you'll need to have saved between, for example, $40K and $45K. ($125K in stash if you're following the
4% Safe Withdrawal Rate)
Second, I'd be careful about assuming your expenses will drop that much as you age. For one, there's inflation, so while you might only be spending $25k/yr in today's dollars, that will be more by then. And also, I'm guessing that my own spending will simply adjust, from travel and fun to medical procedures and care, depending on health. Something to consider.
The good part about travel after retirement in my mind is the combined flexibility and time available. You can travel in the offseason. Take the slow train instead of the express. Take the two stop flight instead of non-stop. Drive instead of fly. Rent an apartment on the outskirts of Paris for a week instead of a hotel in the city for 2 days. Stuff like that. Since time will be much less of a factor, you'll be able to do everything slower and cheaper which will extend your travel budget.
That said, you'll still need to budget, as travel is expensive. I personally want to pull the FIRE trigger once I have enough of a stash to cover my basic expenses with only light travel included (a camping week or two, a continental flight or two.) Then I plan to earn money in some capacity in order to afford the more expansive or exotic vacations, like Europe or Asia. But you can budget for how much you'd like to travel. Figure out how much your travel might cost above and beyond what you're already spending currently. Then you'll have the option of saving more ahead of time or earning some post FIRE.
There are a few folks around here who are planning on traveling extensively once they retire, and are budgeting to spend more per year in retirement then they spend now. Maybe they'll chime in here with some other ideas.
