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Funding Your Retirement Travel

Retirement is a time to pursue the dreams and passions that working life often puts on hold. For many retirees, travel tops the list of aspirations. However, funding extensive travel while preserving portfolio longevity requires careful planning and a well-crafted withdrawal strategy.

At Woodley Farra Manion, we understand the importance of aligning your retirement income with your lifestyle goals. Our investment philosophy, rooted in high-quality dividend stocks, aims to generate reliable income streams that can support your travel ambitions without compromising your long-term financial security.

Balancing Income and Preservation 

The key to funding retirement travel is striking the right balance between income generation and portfolio preservation. Drawing too heavily from your savings can deplete your resources prematurely, while being overly conservative may unnecessarily restrict your lifestyle.

One commonly cited guideline is the “4% rule,” which suggests that retirees can safely withdraw 4% of their portfolio value each year, adjusted for inflation, with a low risk of running out of money over a 30-year retirement. However, this rule is a general benchmark and may not fit every situation.

Sometimes a more personalized approach, rooted in your specific goals and circumstances, is essential. By constructing a portfolio focused on high-quality, dividend-paying stocks, we aim to generate a predictable income stream that can help fund your travel plans while preserving your capital over the long term.

Creating a Sustainable Withdrawal Strategy 

To create a sustainable withdrawal strategy for your retirement travel, consider the following steps:

  1. Define Your Goals: Clarify your travel aspirations, including destinations, frequency, and duration. This will help you estimate the income you’ll need to support your plans.
  2. Assess Your Resources: Take inventory of all your potential income sources, including portfolio withdrawals, Social Security, pensions, and any part-time work or rental income.
  3. Evaluate Your Expenses: In addition to travel costs, consider your essential living expenses and any anticipated changes in retirement, such as healthcare needs.
  4. Determine Your Withdrawal Rate: Work with your financial advisor to determine a withdrawal rate that aligns with your goals and risk tolerance. This rate should take into account your portfolio’s expected returns, inflation, and your retirement timeline.
  5. Implement a Tax-Efficient Withdrawal Sequence: Withdraw funds strategically from taxable, tax-deferred, and tax-free accounts to minimize your tax liability and maximize your after-tax income.
  6. Adjust as Needed: Regularly review your plan and make adjustments based on changes in your goals, market conditions, or personal circumstances.

Our focus on high-quality dividend stocks aims to provide a steady income stream that can help support your retirement travel while preserving your portfolio’s value. By carefully selecting companies with strong fundamentals, consistent dividend growth, and attractive valuations, we work to optimize your portfolio’s income potential and manage risk.

Travel is one of the great joys of retirement, offering the opportunity to explore new horizons, connect with loved ones, and create lasting memories. By crafting a tailored withdrawal strategy that aligns with your unique goals and circumstances, you can work towards funding your travel dreams while maintaining your long-term financial security.

If you’re looking for guidance on creating a retirement income plan that supports your travel aspirations, we invite you to contact the team at Woodley Farra Manion. Together, we can explore strategies to help you pursue your passion for adventure while preserving your financial well-being.

Every journey begins with the first step. We’re ready to join yours.