Why Contingency Funds Are Important in Retirement Planning

In thinking through whether we could afford to retire early and still have the kind of life (and travels) that we wanted, we knew it was important to set aside contingency funds. While the assumption was that it would be for things like medical emergencies, it turns out that we’ll be using our first year’s contingency fund for… more travel?

We had booked a stay of nearly four months in Spain, figuring that at some point during our trip we’d go to Gibraltar or Morocco to get our passports stamped and start another 90 day visa for Schengen. But the other night we discovered that the 90 day limit is in a 180 day period. If you’ve been here for 90 days, you have to leave for at least 90 before returning. And the 90 days here count would include the time we spent in Italy (and I spent in Stockholm) last fall. So we’d be way over our 90 days!

Oops!

It gets complicated to figure out exactly how many days you need to be gone because of the way they calculate the rolling 180 day period. We found an online calculator tool for Schengen visa stays, and entered all our dates. We will have to be out of Schengen for nearly a month!

We’d already paid for a 3.5 month rental in Malaga. We have friends scheduled to come stay with us in March. We had booked and paid for post-Malaga trips in Spain and Morocco. And we’d booked and paid for our flights back to Edmonton in late April.

What to do?
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After some time spent researching, we discovered that Cyprus is not yet part of Schengen. It has applied to join, but that is extremely unlikely to be approved within the next six months. The weather in Cyprus in the winter is similar to southern Spain: mostly sunny, highs in the high teens or low 20s (Celsius, not Fahrenheit). So it looks like we will go spend a few weeks in Cyprus.