Travel is a common answer when you ask people what they want to do during retirement. While they’re in the workforce, Americans often feel too busy or too strapped for cash to travel. At the same time, you’re more energetic when you’re young and when you have work, you have money to save for and spend on vacations. So why wait?
Well, we asked Army National Guard veteran Jeff Rose what he thinks about retirement and travel. He’s also a certified financial planner who manages Good Financial Cents, a blog packed with tons of personal finance knowledge. Take a look at what he had to say.
Smart Military Money: Why is travel a common retirement dream?
Jeff Rose: Is it physically less draining to travel while you’re young? I think you’re absolutely right. Traveling when you’re young makes a lot more sense. As a father with three young sons, traveling can be difficult. When people are retired, their children are grown, which makes traveling, especially for an extended period of time, much more convenient. You’re not having to worry about working overtime or getting called into work, or hauling your kids off to the next sporting event.
SMM: Service members often travel while in the armed forces. How does that affect how veterans might feel about traveling during retirement?
JR: I think there’s something different about traveling on your own terms. Going to visit a place and not having to worry about a formation or reporting to your senior officers, makes traveling during retirement much more enjoyable.
SMM: How would you suggest service members prepare financially for retirement?
JR: I think service members should prepare for retirement just like civilians, in the sense that they need to pay themselves first. One benefit that service members have is that they have a stable income, so they know exactly how much their next check is going to be without any hitches. Knowing this should help them budget more and to be able to put away at least 10%, if not 20%, for their retirement.
SMM: When should military members start saving for retirement, especially if they dream of traveling?
JR: Now. Doesn’t matter how old or how young you are, you need to start saving yesterday. In 10 years of being a financial planner and helping many people retire, I’ve never had one person tell me “Geez, I just save too much”.
SMM: What are your thoughts on the TSP Roth and its popularity?
JR: Personally, I’m a big fan of the Roth IRA. You could tell that from my Roth IRA movement where I inspired 150 different personal finance bloggers all to write about the power of the Roth IRA all in the exact same day. That being said, the Roth IRA really only makes sense for 40- to 45-year-olds and younger. Anyone older than that, it doesn’t plan on working until their mid-70’s probably is not going to see this same benefit, as a younger individual would. I don’t want to discourage people from taking advantage of the TSP Roth, but work with a tax professional that can better analyze your situation to see if it really makes sense, or if you would benefit from the tax deduction from doing the traditional TSP.
SMM: All right, one semi-personal question; where is your dream retirement destination?
JR: I don’t know where the exact destination would be, but I know some of the requirements that it would have to have: