Retire Early and Travel the World: A Practical Guide to Achieving Your Financial Independence
For many pursuing financial independence, extensive world travel ranks atop their retirement bucket list. The dream of roaming global destinations easily lures those stuck behind a desk.Â
But turning that daydream into reality requires diligent preparation and planning. Those who retire decades early through the FIRE movement specifically need to craft a retirement budget and itinerary supporting continuous travel.
Follow these practical steps to retire early and head off on the extended adventure of a lifetime.
Size Your FIRE Portfolio to Support Perpetual TravelÂ
Frequent travel carries costs, so your retirement nest egg must account for months or years on the road. Consider:
– Budget for lodging, food, transportation, entertainment, etc. in desired destinations
– Include visas, travel insurance, vaccinations, luggage costsÂ
– Factor in international or domestic travel medical insurance
– Account for maintaining property and bills at home during travel
Increase your savings goal by 15-25% above ordinary FIRE targets to enable continuous travel without financial strain.Â
Lock in Affordable Medical Insurance Coverage
If you’re considering retiring early and exploring the world, having a solid plan for your healthcare coverage is crucial. Since you won’t be eligible for Medicare until you reach 65 (US and most countries), it’s essential to secure alternative medical coverage that meets your needs. Remember, this is especially critical when traveling abroad, away from your home country’s public health system. Fortunately, several options are available that won’t dent your wallet.Â
One option is to purchase international private health insurance policies from well-known insurers like Cigna or Bupa Global. These policies offer comprehensive coverage, including emergency medical expenses, hospitalization, and outpatient care. They can also cover prescription drugs, dental care, and vision care. You can choose a policy that meets your specific needs, such as one that covers pre-existing conditions or offers additional travel benefits.Â
Another option is to consider short-term plans and travel medical policies to supplement gaps in your coverage. These plans provide coverage for a limited period, typically up to 364 days, and can be an affordable way to protect yourself against unexpected medical expenses. They offer a range of benefits, including emergency medical treatment, hospitalization, and evacuation.Â
Direct primary care and cash clinics are also worth considering. These clinics offer affordable and convenient healthcare services, including routine check-ups, lab tests, and minor procedures. They can help you save on recurring healthcare costs, giving you more cash to spend on your travels.Â
Geo-arbitrage is another option that could benefit you. It involves establishing residency in countries with national healthcare systems which can provide affordable healthcare coverage. Some countries, such as Mexico or Costa Rica, offer high-quality healthcare services at a fraction of the cost in the United States.Â
By prioritizing your coverage needs and exploring your options, you can maintain low healthcare costs while enjoying the financial freedom to travel the world without worrying about unexpected medical expenses.
Earn Location Independent Income
Generating some income while traveling helps offset trip costs and reduces portfolio withdrawal rates. Consider monetizing a hobby, freelancing online, or earning rental income at home. Popular options include:
– Launching a travel blog, vlog, or social accounts
– Teaching English abroad as a freelancer
– Working remotely for companies hiring globally
– Renting your home on Airbnb while traveling
– Investing in dividend stocks and real estateÂ
Just a few hundred dollars per month from side incomes stretch travel budgets significantly.
Get Visas and Plan Travel Logistics MeticulouslyÂ
Extensive world travel requires immense logistical planning, especially amidst complex visa rules. Do your homework to map out itineraries and secure necessary approvals like:
– Multi-entry or extensive travel visas
– Vaccine and health screeningsÂ
– International driving permits and foreign insurance
– Lodging reservations and Transportation passes
– Border requirements and customs regulations
Leave plenty of buffer time for processing visas and paperwork to avoid delays kicking off your travels.
Start with Slow Travel to Trial New Destinations
Rather than immediately committing to perpetual globetrotting, consider “slow travel” to experience new cultures in depth. Options include:
– Long-term home swaps to live like a localÂ
– Month/season-long rentals or homestaysÂ
– Volunteering or work exchanges on organic farms or in hostels
– Enrolling in language immersion or cooking classes
Slow travel offers purposeful experiences and more reasonable costs. It lets you trial living abroad to find destinations worth revisiting in the long term.
Leave Room for Spontaneity in Your Plans
Despite thorough preparations, make sure to schedule your travel. Leave ample open time to explore detours that interest you, or places loved ones recommend. The magic of world travel is embracing the unexpected.
Stay nimble so you can hop between regions and destinations as desired. Go with the flow to create space for the unplanned memories that often become the most special.
Make the World Your Oyster in Early RetirementÂ
The FIRE lifestyle provides the freedom to turn global exploration into a full-time pursuit. Prioritize travel in your retirement planning and budgeting so you can make the most of this unique life phase.
Embarking on extended world journeys engages the mind, body, and spirit, unlike any other activity. Travel enriches early retirement in incredible ways. By exploring different cultures, cuisines, and lifestyles, you get to broaden your horizons, challenge your assumptions, and gain a deeper understanding of the world around you.Â
And the best part? With prudent planning and a sense of adventure, anywhere on the map can become a destination after you FIRE! So, don’t let fear or uncertainty hold you back. Take the leap, and discover the joy of traveling the world. It’s an experience that will change your life forever.
