When Lynda and Don Perdew retired, they sold their home in Southern California and used the money to buy a 37-foot recreational vehicle. Then they set out to see the country.
That was 10 years ago, and the Perdews are still on the road. But now they're taking shorter trips and staying longer in each place. Now parked at a campground near Mount Rushmore, they'd like to visit Bryce Canyon National Park in Utah this summer. But with gas prices topping $4 a gallon, they aren't sure it's affordable anymore.
"We're sitting with a calculator in one hand and a map in the other, trying to figure out how far we're going to get when we get 7 miles a gallon," says Lynda Perdew, 61.
Like the Perdews, many older Americans had long envisioned retirement as a period of adventure — a time to indulge in leisurely lifestyles, with frequent trips out of town to see relatives and explore places they'd never seen. That was then. Now, with food and health care costs surging and fuel prices soaring, many retirees have been forced to downsize their dreams of travel.
An airline ticket to visit the grandchildren costs about twice as much as it did a year ago, with further price increases projected. And retirees who have saved for decades for the chance to travel overseas are finding that the anemic dollar has made Europe prohibitively expensive.
Lynda and Don have pensions from their former employers, so they're not likely to run out of money. But retirement is costing far more than they'd imagined.
"I see this everywhere and with everyone I talk to," says Lynda, who keeps up with other RV owners through Eons.com, a social-networking website for Baby Boomers. Several Eons members recently backed out of a get-together at a campground in Kansas because they couldn't afford to make the trip.
More than half of retirees cut spending during the first quarter of this year because of worsening economic conditions, up from less than one-third who did so in the fourth quarter of 2007, according to a survey conducted in May by Principal Financial Group.
A survey AARP conducted in April found that more than half of Americans 55-64 have postponed plans to travel because of the economic slowdown.
Even the well-off are scaling back. Twenty-one percent of affluent 60-year-olds are canceling, shortening or postponing a vacation because of the economy, and 22% said they're contributing less to charities, according to a survey conducted in April by Bell Investment Advisors, a financial services firm in Oakland. The 60-year-olds surveyed had at least $1 million in investment assets.
Many of today's retirees overlooked the risk of inflation when they were planning for retirement, in part because inflation had been so contained in recent years, says John Sestina, a financial planner in Columbus, Ohio.
What these retirees forgot, he says, is that even though inflation over the past 80 years has averaged about 3% a year, there have been prolonged periods when inflation averaged 6% or more a year. During such periods, Sestina says, retirees essentially have two options: Cut back on spending, or return to work.
Larry and Fran Page of Chattanooga, Tenn., are among many feeling the pressure. In the past, they used to visit their children and grandchildren in Dallas and Charleston, S.C., several times a year. Last year, they drove to Charleston four times to help their daughter set up a business.