In planning your retirement budget, it’s easy to factor in fixed expenses, but travel is a discretionary expense. It’s not like paying for housing or health care. The very first thing to consider when budgeting for European travel is how much you’re willing to spend on enjoying new experiences. It’s impossible to say how much of your retirement budget should be allocated to travel. It’s also hard to measure your return on investment in travel. The rewards are experiences, rather than financial gains. 

There’s probably not a fellow retiree who doesn’t think about how to balance spending versus conserving their wealth. For our household annual spending plan, we go through a very specific process, developed over years, that works very well for us. We thought we would share our process with you since it has allowed us to travel extensively while feeling confident that we will continue to conserve enough money to maintain a high...