How to Sustain Retirement Savings While Traveling Abroad


NEW YORK (MainStreet) —When Lynne and Tim Martin travel to Europe, they don't pay for flights abroad or pricey hotels. Instead, they book travel overseas on repositioning cruises, which are discounted, and rent apartments that have kitchens from locals that live in the foreign city they are visiting.

"We cut our travel expenses by half and have multiplied our savings because we cook dinner meals rather than eat out at expensive restaurants," Lynne Martin told MainStreet.

The Martins are among the 43% of Americans who prefer a home away from home vacation, which includes renting space in a house through AirBnB, or instead of a hotel, according to the 2014 Capital One Rewards Barometer survey.

"A house can provide more space for less money," said Amy Lenander, vice president of Rewards with Capital One.

Other popular getaways include 32% who want a foodie vacation, 15% who dream of a television rest compared to 11% who want a fitness break.

"There are people who trade their house but I sold mine because I didn't want to wonder if the water heater broke while I'm traveling," Tim Martin told MainStreet.

As a result of their low cost travel lifestyle, the retired couple is sustaining their retirement nest egg and have even written a book called Home Sweet Anywhere (Source Books April 2014).

"We're well organized in the retirement department," said Tim Martin whose next trip is to Normandy, France with his wife. "Our investment portfolio is growing nicely and we're not withdrawing from it."

The Martins have the right idea in finding ways to secure affordable travel, which can leave more money for retirement.

"Increased travel often means more spending on gas, eating out and entertainment costs so this is an opportune time to address how to make sure that retirement saving is properly prioritized," said James Nichols, head of retirement income and advice for Voya Financial.

Some 57% of retirees faced unexpected challenges in retirement, according to a study by the Retirement Research Institute. "It is important to enjoy your life, but it shouldn't be at the expense of your future retirement security," Nichols told MainStreet. "If you do not properly save for the future you could be faced with some very stressful and uncomfortable choices later in your life at a time when you would most like to be relaxing and enjoying your non-working ears."

One way many stay on track with retirement savings while enjoying foreign destinations is by using reward points rather than cash.

The Capital One Rewards Barometer study found that demand for summer travel is at a three-year high at 76% this year compared to 67% in 2012 with 48% planning to redeem their rewards toward summer vacations. "Travelers should watch out for restrictions in some programs like blackout dates and fees for booking last minute, which might require you to book far in advance to make use of your rewards," Lenander told MainStreet.

Before traveling, check with credit card issuers about fees added on to purchases made abroad. About 56% of people are unaware of foreign transaction fees compared to 49% last year. "More issuers are waiving these fees but some still charge as much as 3 percent for transactions made overseas," said Lenander.

Tips for Saving Money on Housing While Traveling

  1. Book a vacation rental as early as possible. Ninety days in advance gives you more options to perfectly accommodate your family or group. For last minute deals, check out's Special Deals & Offers filter.

  2. Read Reviews to hear what other travelers have to say about each potential property. This can give you an unbiased and unfiltered firsthand account of what to expect, such as the need to bring your own beach towels or toiletries.

  3. To pay even less, look for vacation rentals farther away from popular tourist attractions, such as the waterfront, landmarks or theme parks.

  4. Search for properties in lesser-known destinations because they can still be great vacation spots that may cost less because there's less demand.

  5. Use reputable home rental websites to find the right match for your preferences and budget.

—Written by Juliette Fairley for MainStreet

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