When I decided to retire a year ago, I knew we could live more frugally in some ways but I also knew that travel would be a bigger expense, given that we'd have more time for it. And, after years of working hard and looking forward to retirement, it would be disappointing to have to limit travel due to lack of funds. So, to what extent would we be able to afford retirement travel? To figure this out, prior to retiring I analyzed our projected monthly expenses in relation to our retirement income. I included "travel" as a monthly expense.

For us, travel planning begins with reviewing our calendar and discussing where we'd like to go in the coming year. We take into account visits with family, work/volunteer schedules, other financial obligations, and timeshare options. In 2009, our travel plans have included Carmel, San Antonio, an Alaskan cruise, and a trip to Payette Lake in McCall, ID. Once we know when and where, I estimate expenses for airfare, hotels, meals, and excursions. That amount is prorated and I deposit a monthly amount to the savings account that holds travel funds.

Then I challenge myself to reduce the cost of our planned travel as much as possible. For example, our hotels in Carmel, San Antonio, and McCall were reserved through our timeshare, so aside from the annual dues, there was no hotel expense. The airfare for San Antonio was purchased with miles, so we paid only the airport taxes (~$20). The airfare to Seattle (departure port for cruise) was 50% off because I used my mileage card rewards.

For the Alaskan cruise, we received a "military discount" available to anyone who has ever served in the military, no matter when. We were eligible for the discount due to dh's service during the Vietnam War and this saved ~$500. A few days before the final payment was due, I called the cruise line and negotiated an additional savings of $240 plus $100 onboard credit. A few days before departure the cruise line called to see if we were interested in upgrading to a suite for a reasonable price and we did.

The effort to systematically save and reduce travel costs pays off because the travel fund is growing. I usually deposit any "windfalls" into this account. In 2010, we want to go to