Between building a career and raising a family, life gets really busy. And for many, it’s not until retirement that there’s time to finally relax and plan the trips they’ve always dreamed about.
Now that you’re coming up to retirement, what better way to celebrate than with an epic retirement trip?
No more excuses – it’s time to plan an adventure of a lifetime and mark the transition into the golden age.
In this post, we’ve rounded up tips from experts to help you plan the best retirement trip and make it one to remember.
Why Travel is Important in Retirement
Now that you have more time on your hands to do the things you love, travel seems like an obvious choice. And lucky for us, it comes with some measurable benefits that make it the perfect pastime for retirees.
Here are just some findings from a few studies on the benefits of travel in retirement:
- Retired men who take a vacation every year are 32% less likely to die from heart disease.
- Retired women who travel at least twice a year are less stressed and less depressed.
- Traveling abroad has been shown to make people more open-minded and emotionally stable.
- Traveling keeps seniors moving much more than they would at home, which has a whole range of health benefits.
- Finally, traveling takes you out of your comfort zone, helping you overcome fears and prevent loneliness.
Taking a Trip For a Retirement Party
Here are a few things to think about to make the most of your retirement trip.
Plan Carefully
From safari trips in Africa to skiing in the Alps, there are so many options when it comes to retirement trips. The more you can plan in advance, the easier it will be to organize.
Here are some questions to ask to help you start the planning process:
- Where in the world would you like to go?
- What time of year is best?
- Are there any important dates you need to work around?
- Who would you like to go with?
- Are there any specific things you’d like to see on your trip?
- Do you want to book any specific excursions on your trip?
The more detail you have in advance, the easier the rest of the planning will be. So, start by writing down your answers to these questions and see what you come up with.
Plan Out a Budget for Your Retirement Trip
Your budget will depend on the length of the trip, where you go, and what is involved in the holiday.
Backpacking through a national park will be much cheaper than a private tour of the top wineries in France, so it’s important to have a budget.
“It’s important not to overextend yourself when planning your retirement trip. It should be a trip to remember, but figure out how much you can comfortably afford on your trip and stick to your budget. You want to have money to spend on experiences while you’re away, so be as detailed as you can with your budget.” – Trinity at The Pay at Home Parent
Make an Extensive Packing List
Once you know where in the world you’re going, it’s time to make a packing list. A beach holiday in the Caribbean will have an entirely different packing list to a cruise around the Fjords, so this will be personal to you.
Make sure to include the following:
- Enough outfits for both the day and evening
- Comfortable shoes
- Sun protection (hats, sunglasses, and sunscreen)
- Binoculars
- A camera
- Supplies for your party (more on this below)
Focus on the Experience
When you’re looking at the best places to go on a retirement trip, it’s easy to get caught up in the best hotels, the most luxurious locations, and planning an extravagant party.
But remember, this trip is about the experience. You’re entering a brand-new era of your life, and this trip is going to mark that occasion. Fill your trip with the best experiences so it’s one to remember.
Look for excursions, spa days, golf trips, and any other experiences that you’d love to take part in on your trip.
Live Like a Local
When we take holidays, we tend to remove ourselves from the local culture. But this trip is a chance for you to live like a local and truly experience something different.
Try and stay in a house or apartment, shop locally, and find small restaurants that serve authentic homemade food.
Mingling with locals and immersing yourself in local life is one of the most rewarding parts of a retirement trip, and you’ll be glad you took your trip a little differently than your regular holidays.
Tips for Your Retirement Party
While you’re away on your retirement trip, throw a retirement party! It’s a celebration, after all. Here are some tips on throwing a retirement party you won’t forget.
Pick a Theme
Everyone loves a theme at a party, so choose one that’s close to your heart:
- Get everyone to dress up as something that starts with the first letter of your name
- The decade you were born – who doesn’t love a groovy 70s-themed party?
- Your favorite color
- A tropical theme – this could work perfectly if you’re planning to take a trip to the Caribbean or a beautiful beach.
It doesn’t take much to bring a theme together, either. Whether it’s fancy dress, themed cocktails, or just a few simple decorations, your party will quickly go to the next level, no matter where in the world you’re celebrating.
Involve Family and Friends from Outside of Work
Not everyone you know will be able to travel for your retirement party, but now is the time to invite all the people you’re close with. Family, friends, and dear work colleagues will love celebrating your retirement with you, so invite as many people as you want on your trip.
Or maybe reserve your retirement trip for your nearest and dearest and throw a big party when you return from your adventure. Now is the time to think about yourself and include only those you’d like to include.
Decorate
No party is complete without decorations. If you’re planning to throw a party while you’re away on your trip, you only need a few decorations to bring it together.
Balloons, streamers, and table centerpieces will bring the theme together and give your party that extra special feel.
If you’re throwing a party at home, go all out with balloon arches, disco balls, photos of you throughout your life, and table decorations to make it a night to remember.
“If you want something really special, an inflatable nightclub will have your guests in awe! These huge inflatable tents are colorful, private nightclubs that are perfect for retirement parties. Guests love them, and they are incredibly easy to set up.” – Marissa from Inflatable Blast
Set Up a Photo Booth
A photo booth is perfect for any party. You’ll have dozens of wonderful pictures to create a retirement party album, and it helps guests relax and loosen up.
Photo booths also help you solidify a theme. Whether you’re going for a decade or a color theme, you can have specific props and frames for guests to take photos with.
Don’t forget to get in there and take plenty of pictures with your guests – these will be treasured memories for years to come.
Create a Themed Playlist
The music you play at a party sets the entire tone. Themed music is perfect if you’re going with a theme, from 80s hits to chilled beach tunes.
But if you want to bring a little bit of fun and humor to your retirement celebration, here are a few songs you can get started with:
- “The Best is Yet to Come” by Frank Sinatra
- “I’m Free” by Rolling Stones
- “9 to 5” by Dolly Parton
- “School’s Out” by Alice Cooper
- “Take it Easy” by The Eagles
- “Good Riddance (Time of Your Life)” by Green Day
Create a Fun Custom Cocktail
Every retirement party needs a custom cocktail to serve guests. This can be a fun spin on your favorite flavors or something that matches your theme.
Name it after yourself and watch guests enjoy sipping on their custom drinks for the evening.
“A coffee-based cocktail is a classic option for a retirement party. Go for a creamy liquor if you like your cocktails sweet, or add a splash of whisky for something with more of a kick. I was a bartender on the Las Vegas strip for over seven years, and most people love the subtle taste of coffee in a cocktail, even if they’re not a big coffee drinker.” – Anthony from Brew That Coffee
Incorporate Party Games
Everyone loves party games, and what better way to show you’re done with work for good than playing a few games?
Retirement bingo is always a hit, with ridiculous squares like “drink prune juice” and “nap time.” Or you could see how much your friends and family know about you with a personalized trivia game.
If you have kids coming, setting up a scavenger hunt always keeps them occupied. Just create a list of things that will be at the party for them to go find – they’ll be happy, and it gives the parents more time to enjoy a dance.
The Best Trips to Take When You Retire
The best trip you can take when you retire is the one you’ve been dreaming about during your working life. But if you’re looking for some ideas, here are a few great trips you can take for your retirement party.
Blue Ridge Parkway
If you’re into cars, this is the retirement trip for you. Dubbed America’s favorite drive, the Blue Ridge Parkway is 469 miles of road, joining Shenandoah National Park to the Great Smoky Mountains National Park.
The scenic drive is utterly breathtaking, with many pullover areas to enjoy the panoramic views. If you’re into hiking, there are also over 80 trails dotted throughout the route.
If you’ve spent your days couped up in an office, this is a fantastic trip to help you get back into nature. And if you love cars, why not rent your favorite model for the drive?
The Rocky Mountains
If you’d love to get into nature but aren’t a fan of driving, why not leave the driving to someone else?
There is a fantastic trip on a glass-domed railway car through the Rockies that lets you take in the view in the lap of luxury. Over 16 nights, you’ll travel on the Rocky Mountaineer through forests and river canyons, winding your way through National Parks, all the way to the Athabasca Glacier.
While you’re taking in the view, you’ll get served delicious food and glasses of bubbly, while you hear about the history from your tour guide.
Family Reunion
If you’ve got grandkids, you’d love to bond with or siblings you don’t see enough, now is the time to plan a family reunion.
This could be a trip to Disney or a ski resort, time on a ranch, or a yacht around the Mediterranean. Where you go will depend on your family, but the point is to create some lasting memories and reconnect with your loved ones.
“Taking a family trip doesn’t have to cost the earth. With some clever planning and access to deals, it’s easy to plan a trip for you and your extended family. Whether you want an all-inclusive vacation by the pool or an active city break, a family reunion trip is a great way to celebrate your retirement.” – Travel Scoop
A Once-in-a-Lifetime Adventure
We’ve all got a mental bucket list of places we’d love to visit or things we’d love to do and see around the world. Now you’re coming up to retirement, it’s time to plan that once-in-a-lifetime adventure you’ve always wanted.
All you need to figure out now is where you’ll go. Maybe you want to go scuba diving in the Great Barrier Reef or see the Big Five on safari in Africa. Or maybe you want to go on a worldwide adventure and try out the best golf courses in the world.
There’s nothing stopping you now. So start planning your retirement trip and make it one to remember!
This article originally appeared on TheRoamWild.com and was syndicated by MediaFeed.org.
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8 retirement plan options for the self-employed
You can avoid costly retirement mistakes by picking the right retirement plan for yourself and your business.
As a self-employed freelance writer, I spent hours researching and learning about different self-employed retirement plans. When you’re self-employed or run a small business, these retirement savings plans are not an automatic benefit like an employer-sponsored 401(k) or pension plan that many employees receive as part of their job.
Thankfully, there are a number of self-employed retirement plan options, but each comes with its own benefits and limitations. Ultimately, I settled on a solo 401(k) for my business, but that doesn’t mean it’s the best fit for everyone.
Here’s everything you need to know about self-employed retirement plans and how to choose the right plan for you. We’ll talk through the plans one by one, and then give you some tips on how to open the retirement account of your choosing, so you can start putting aside some of your self-employment income to create a successful retirement scenario for yourself.
Related: 7 brilliant moves to thrive in an uncertain economy
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An individual retirement account — IRA for short — is a type of retirement plan that anyone can use, including self-employed individuals. You can contribute to an IRA in addition to other self-employed retirement plans, and depending on your income and the type of account you choose, you may be able to take advantage of tax savings.
With a traditional IRA, you may be able to deduct your contributions when you file your tax return every year. Any earnings you receive will be taxed on a tax-deferred basis when you withdraw them in retirement. That means you’ll pay taxes on them according to your tax rate at the time of withdrawal.
In contrast, a Roth IRA doesn’t allow you to deduct contributions from your taxable income. You pay taxes on those contributions in the year you make them, and then when you take the money out in retirement, you receive it tax-free.
However, there are some limitations that can reduce the value of an IRA, depending on your situation:
- In 2020, IRA contribution limits are set at a maximum of $6,000 or your taxable compensation for the year, whichever is less. If you’re age 50 or older, that limit goes up to $7,000.
- Contributions made in excess of the annual limit will be taxed at 6% for each year they remain in the IRA.
- Depending on your modified adjusted gross income on your tax return, you may not be able to contribute to a Roth IRA, or you may be subject to a lower contribution limit.
- Your MAGI may also impact your ability to deduct contributions you make to a traditional IRA. IRA deduction limits can vary based on whether you also have an employer-sponsored retirement plan.
- If you take withdrawals from an IRA before you reach age 59 1/2, you may have to pay taxes on the amount plus a 10% penalty for early withdrawals. There are, however, exceptions to this rule.
Because of the nature of IRAs, they can be a great way to supplement savings you’ve put into a self-employed retirement plan. However, because of their low annual contribution limit, they’re not the best option as a primary retirement plan.
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Also called a one-participant 401(k), a solo-k, a uni-k, or a one-participant k, a solo 401(k) is designed specifically for small business owners who have no employees (other than a spouse, if applicable).
In general, a solo 401(k) functions similarly to an employer-sponsored 401(k). You’ll make contributions with pre-tax dollars, and these contributions will grow tax-deferred until you take withdrawals in retirement.
There are, however, a few differences besides the single-participant nature. For starters, as the business owner, you can make contributions as yourself and also as the employer:
- In 2020, you can make employee contributions of up to $19,500 as an individual; if you’re age 50 or older, you can add another $6,000 in catch-up contributions.
- As the business owner, you can make employer contributions of up to 25% of your compensation annually, up to a maximum of $57,000 in 2020.
Those employer contributions can also be counted as a business expense, further reducing your tax liability each year. Depending on which plan provider you go through, solo 401(k)s are relatively inexpensive. For instance, I paid a few hundred dollars to set up mine plus an ongoing monthly fee of $25.
Unlike with an IRA, you may be able to set up a loan option with your solo 401(k), though interest charges will be involved. In addition, doing something like taking a 401(k) loan to pay off debt and borrowing from your own retirement should be considered only as a last resort.
All that said, here are some potential drawbacks of a solo 401(k) to consider:
- As with IRAs, if you take withdrawals from a solo 401(k) account before you reach age 59 1/2, you’ll be assessed taxes plus a 10% penalty. Although there may be options to allow loans or hardship withdrawals, there are fewer exceptions to the 10% early withdrawal penalty than you’d get with an IRA.
- You’re not eligible to open this plan if you employ anyone besides yourself and your spouse, though 1099 workers don’t count.
- You may not be eligible if you’re also covered under an employer-sponsored retirement plan — for example, you work as an employee at a company and also run a side business in your spare time.
Because of how a solo 401(k) is set up, you might consider it if you’re an independent contractor or sole proprietor with no salaried employees — though, you can still qualify even if you employ your spouse.
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A Simplified Employee Pension IRA is a type of IRA that you can establish to benefit you, your employees, or both. The primary difference between a SEP IRA and a traditional or Roth IRA is that only an employer can contribute to a SEP IRA.
The maximum contribution amount for each employee, including yourself, is the lesser of 25% of compensation or $57,000 in 2020. A SEP IRA functions similarly to a traditional IRA for tax purposes, which means your earnings will grow tax-deferred. Also, your contributions as the employer are tax-deductible.
If you want to make separate contributions to a traditional or Roth IRA, you can. In some cases, however, you may be permitted to make your personal IRA contributions to your SEP IRA.
Here are some potential issues you might run into with a SEP IRA:
- A SEP IRA allows only employer contributions, unlike a solo 401(k), which allows you to contribute to your self-employed retirement plan as an individual and an employer.
- If you have employees, you must contribute the same percentage of salary for each person who’s participating in the plan. That includes employees who are no longer employed on the last day of the year.
- If you take a withdrawal before age 59 1/2, you’ll need to pay income tax and a 10% penalty on the distribution. There are, however, some exceptions to the 10% penalty requirement, which are the same as traditional and Roth IRA exceptions.
- You can’t borrow from a SEP IRA as you can a solo 401(k).
A SEP IRA is for business owners who want the simplicity and lost cost of an IRA, but with a much higher contribution maximum. There’s also less paperwork involved than with a solo 401(k).
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A Savings Incentive Match Plan for Employees IRA allows both employers and employees to contribute to a traditional IRA. In 2020, you can contribute $13,500 as an individual or $16,500 if you’re age 50 or older. The same limit applies to any employees. As the employer, you can also choose to make a nonelective contribution of 2% of compensation or a matching contribution of up to 3% of compensation.
Because the SIMPLE IRA is designed as a traditional IRA, your contributions are tax deductible in the year you make them, and your earnings will grow tax-deferred. You can also contribute to a traditional or Roth IRA on your own.
Here are some important things to know about the SIMPLE IRA:
- Although the structure of a SIMPLE IRA is similar to a solo 401(k), in that you can contribute as the employer and individual, its contribution limits are lower.
- You can’t borrow from a SIMPLE IRA as you can a solo 401(k).
- You may need to work with a special custodian to open a SIMPLE IRA account.
- Withdrawals made before age 59 1/2 will be subject to income tax and a 10% penalty, though there are the same exceptions to the penalty as other IRA plans.
Consider a SIMPLE IRA if you want the chance to contribute as the business owner and an individual, but don’t expect to need the higher plan contribution limits of a solo 401(k). This self-employed retirement plan is also better if you have employees and don’t qualify for a solo 401(k).
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A Health Savings Account isn’t technically a retirement plan, but you can use one to set money aside to use in retirement. You can use this account in addition to one of the other self-employed retirement plans and a traditional or Roth IRA. In fact, I contribute to both a solo 401(k) and an HSA every year.
HSAs are available to taxpayers, including business owners, who have a high-deductible health plan. You can set aside money in the account to use for out-of-pocket medical expenses on a tax-free basis. In other words, your HSA contributions are tax-deductible, and you won’t pay any taxes when you make withdrawals for eligible medical expenses. If you take withdrawals for ineligible reasons, the amount will be subject to income taxes plus a 20% penalty.
That said, if you hold onto your HSA funds until you’re 65 or older, withdrawals for non-medical reasons will still be subject to income tax but not the additional 20% penalty. As a result, an HSA can function similarly to a tax-deferred retirement account. Of course, you can also use HSA funds to pay for health care costs in retirement and avoid all tax-related costs.
In 2020, you can contribute up to $3,550 to an HSA if you’re the only one on your health insurance plan, or up to $7,100 if you have a family plan. Depending on your HSA provider, you may be able to invest these funds.
If you’re considering an HSA, here are some things to keep in mind:
- Because it’s not a traditional retirement plan, it’s not a good idea to rely solely on an HSA to save for your future.
- You won’t qualify for an HSA if you don’t have a high-deductible health plan.
- HSA contribution limits are lower than most other self-employed retirement plans.
If you qualify, consider an HSA as a way to supplement your other retirement contributions. Keep in mind, though, that any ongoing medical expenses may make it challenging to use the funds to save for retirement.
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Depending on your personal financial situation, you may also consider other types of small business retirement plans. Here are a few less-common options that self-employed people might consider.
Take some time to consider all of your options to determine which retirement plan is right for you. Also, consider consulting with a tax professional and/or financial advisor to get an idea of which plans would benefit you most when it comes to your tax planning.
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A tax-deferred pension account, a Keogh plan allows you to set up a defined-benefit or defined-contribution plan. Keogh plans are relatively complicated and require more upkeep and costs than other types of self-employed retirement plans.
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With a Keogh plan or a separate defined-benefit plan, you’ll make contributions based on a set amount you aim to receive annually in retirement. There may be contribution limits, though, depending on how you plan to structure the plan.
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With this type of retirement plan, employees get a share in the profits of the business. There are no contributions from the employee with this type of plan, and contributions by the business will depend on quarterly or annual earnings.
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In most cases, you can get any of these self-employed retirement plans from a major brokerage firm. In some cases, some brokers may not offer certain types of plans, so decide which plan you want to go with before you start shopping around.
As you compare brokers and their self-employed retirement plans, review several features, including:
- Cost (setup and ongoing fees)
- Ease of use and access
- Administrative help
- Investment options (mutual funds, ETFs, etc.)
- Resources and advice
There’s no single best investment broker for everyone, so it’s important to take your time and consider how to choose a brokerage that’s best for you and your business.
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Self-employment comes with a lot of perks. But without an employer-sponsored retirement plan, you’re responsible for making sure you have everything in place to save for your future. Saving for retirement sooner rather than later is important because it gives you more options when you’re ready to slow down or stop working entirely.
Think about your financial goals, ability to save and tax situation to help you determine which retirement plan is the best option for you. Also, think about the costs, upkeep, and potential pitfalls associated with each plan. The retirement planning process can take some time, but getting the right account set up could make it easier to avoid costly retirement mistakes in the long run.
Learn more:
- 8 brilliant moves if you make more than $5,000/month
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Recession checklist: 7 things you need to survive an economic downturn
This article originally appeared on FinanceBuzz.com and was syndicated by MediaFeed.org.
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