For your next trip, think about combining seeing the sights with doing something to make the world a little better. It may require some extra planning, but the rewards can be immense.
THE WHOLE POINT OF TRAVEL is to do something that fulfills you—to replenish your energy by unplugging and relaxing, to reconnect with others, to expand your knowledge. For a growing number of people, that fulfillment is connected to the need to accomplish something that makes a difference, even a small one, in the world.
Ever thought of helping build a house for a needy family in the mountains of Appalachia? Tending to animals at a wildlife refuge in South Africa? Participating in an archaeological dig in Pompeii? Volunteer vacations can afford you the chance to do something meaningful with your time. And for some—especially those near or in retirement—an extended volunteer trip can be a gateway into life’s second act.
Whatever you’re hoping to take away from a volunteer trip, there are a few tips that can make the experience more enjoyable.
Be clear about what you want to get out of your experience
Many volunteer vacations sound alluring on paper, but midway through a backbreaking archaeological dig you may have second thoughts. Be very thoughtful about your goals and what you hope to achieve. Do you want to donate your skills, or are you looking for a completely unique experience? Older vacation volunteers may be in especially high demand because of their extensive work experience. Some economic-development organizations will even pay your travel and living expenses if you have the skills they need. But if your goal is to stretch your horizons, then select a vacation that doesn’t depend on sharing what you already know.
As you research volunteer vacation opportunities, consider how many hours a day you want to work, the length of time you want to volunteer, the amount of physical labor you’re willing to perform and the age range of the people you’ll be volunteering with, so that you find the best fit for you. Talking with others who have gone through the experience can help you get a better sense of each opportunity, and organizations may be able to help you get in contact with past participants for reference.
"Make sure the cost of a volunteer vacation is in line with your long-term spending plan."— Ben Storey, Director, Retirement Thought Leadership, Bank of America
Manage your expenses
If you’re traveling abroad and you plan to stay in one place for several weeks, you may want to set up a local bank account. That way you can have the funds you’ll need to cover your living expenses. “Because currencies fluctuate in value, it’s a good idea to arrange for periodic transfers of money rather than a lump sum,” says Ben Storey, director, Retirement Thought Leadership, Bank of America.
Also, if you’re going to be away for a month or more, you’ll need to make financial arrangements to cover expenses at home and abroad. “You’ll have to continue to maintain your home and to pay property taxes and homeowners insurance as well as your utility bills while you’re gone.” Renting out your home could help to defray some of those costs, Storey points out, but you may incur others, such as buying an umbrella insurance policy to provide liability coverage for your tenants. He suggests asking your tax advisor whether some or all of your volunteer vacation costs could be tax-deductible, as another possible means of defraying costs.
Depending on where you’re traveling and what activities you’ll be engaged in, you may also want to set aside extra money to cover emergency medical evacuation insurance. Some travel insurance packages may cover emergency evacuation, so that’s an option you might also consider.
Don’t lose sight of your bigger financial picture
If your volunteer vacation takes the form of an unpaid sabbatical, keep in mind that you won’t be contributing to your 401(k) while you’re away. You can, however, use catch-up provisions to make up some of the shortfall, as long as you’re age 50 or older. If you’ve had any earned income during a volunteer year, you can also contribute to an IRA, says Storey.
For those already retired, the timing of when to take an extended trip can be critical. “The market conditions under which you make withdrawals from your retirement accounts in early retirement can make a huge difference,” Storey says. “So if the market is having a bad year, you’ll want to try to think about how that might affect your long-term withdrawal strategy.” And make sure the cost of a volunteer vacation is in line with your long-term spending plan, he says. “It’s natural to spend more in your early retirement years, but you also have to look down the road and anticipate higher spending later in life due to increasing health-care costs."
3 Questions to Ask Your Financial Advisor
- Do I need to consider adjusting my investments so that I can afford to go on a vacation that helps other people?
- For an extended trip overseas, what would be the pluses and minuses of setting up a bank account in that country?
- How would taking a volunteer vacation now potentially affect my retirement plan?
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