Planning cruising and savings

[GordMay]

... I have been saving aiming for 150 grand before I leave but after watching him I’m not so sure everyone needs huge bank accounts to go.

You don’t need much to “go”. It’s “staying” that presents budgetary challenges.

[denverd0n]

Originally Posted by Cadence

I think you need to be on SS for two years before getting Medicare...

You have to be 65 to be eligible for Medicare. Whether or not you are receiving Social Security retirement benefits is completely irrelevant.

[hamburking]

Originally Posted by butterchurn

I retire this month, I'm 66 and my wife already is retired. She now has major back issues and is in constant pain. No long term cruising for us. We have a Bristol 32 and wanted to cruise the Great Lakes extensively. Not sure how much of that we can do now. We are keeping the boat, but not sure we can do much more than day sailing, together, anyway.

It is reality, but not happy about it. We will enjoy the boat as she is able.

The true currency of sailing is good health, not money.

Too many of us wait till our pile is really big...then never get to go. It a terrible thing. Damned if you go, damned if you don't. What ever happened to taking risks?

[hamburking]

Originally Posted by rosatte

There’s a guy Carl Brooke’s aka grandpas sailing that just bought a boat up in Lake Erie and he s heading south down canal icw to Florida on a shoestring budget I have been saving aiming for 150 grand before I leave but after watching him I’m not so sure everyone needs huge bank accounts to go

Thank you...in reading the posts you are the first to say a number, $150k usd. Thats a starting point, at least. And its way less than the million that keeps popping up.

Another post mentioned that its hard to calculate a number because they don't know how long they might live. Well, if you can't let go of the purse strings, then maybe you are already dead.

[sailorboy1]

Originally Posted by Captain Randy

Greetings from sunny Southern California


CR

So Randy are you leaving this year as you wanted to? Based on you initial post I feel you can. you say you have the cash on hand to supplement your wife's SS till you start collecting. Plus you have money in IRA that you tap if needed. If there's more than $100k in that IRA etc. I would leave if I were you (and I did).

The planned $2500/mo is doable (even for me who has been spending more). I bet you go to Mexico to start your cruise and can even do better than that. But the first year there's be lots of little "stuff" that add up as you turn your boat in a home!

[Crazcarl]

Paralysis by Analysis.

You can reasonably expect your money to last 30 years withdrawing about 4%. So that added with your Wife's SS, your eventual SS, and any other retirement accounts, and you are set to go now. Especially if you can find a low cost area to cruise in while you get used to any lower budget if needed.

I am personally planning on having $550+k before I leave, maybe even closer to $650k. This should generate a decent monthly income for my smaller budget. That doesn't include my boat fully updated and refitted. I also wont have SS or any other retirement benefits for 20+ years and have a family of 4.

Our land budget is small, and we are used to it and love the simplicity, which makes the transition much easier. We leave in 2020, unless the market goes crazy in the next 7 months.

Get out there and enjoy.

[ramblinrod]

Originally Posted by Captain Randy

Greetings from sunny Southern California

So there are many discussions on how much the monthly cost to cruise is. We all know there are many ranges from on the cheap-cheap to many thousands a month. I believe to fall into the $2,500 a month range so let's go with it for now. Wife is 62 and can start to collect the SS benefit of about $1,400 a month. I am 59 meaning I cannot begin to collect for 3 years meaning we would need to supplement with savings about 1K a month until we can both collect. Once we are both receiving SS the monthly will be $3,400 a month or so meaning we can live off SS fully in 3 years.

Challenge is we want to leave a the end of this year. Boat is paid for and almost ready and we are moving aboard this summer. We have some IRA money (which we prefer not to touch at all until post cruising life, when ever that is) and enough savings to supplement her SS as noted above.

My question is how much of a cushion do you all feel comfortable with in the bank for backup, emergencies, future retirement etc. This assumes as I have noted to live off of SS. Many of you may have a pension of sorts. We will never have a million in the bank but would a couple hundred thousand be feasible? We don't have that much yet but working to get there. Just trying to get comfortable with quitting a great paying job so live our dream before we get much older. Its a balance I know but I do not see being able to come back ever and go back to work.

Anyone care to share how you arrived at your financial planning and cash in the bank comfort levels based against SS, pensions and anticipated

Thanks all for your considerate advice......
CR

This is one of those unanswerable questions we all struggle with.

It is easy to prepare a budget for today's situation; but what about the future?

What if one passes long before the other, who is now on half the SS, but all of the savings (left)?

What if one or both kick the bucket at 70?

How does that change the picture if healthy until sudden death at 90?

What if one or both require extended nursing care, sucking up $3000 / month (in North America)?

Next, what is the real maintenance cost of a permanent live-aboard vessel?

(Just patching holes so rain doesn't leak in from above, nor seawater from below.)

What is the difference in maintenance cost of a permanent cruising vessel?

(Maintaining Bristol fashion.)

One can do a total refit now, and then the bare minimum maintenance from then on, but the Fair Market Value of the vessel will suffer greatly.

If your future plan includes selling the boat to live off the proceeds, this could have a huge bearing.

A general rule of thumb, is that one should plan to spend 5-10% of the FMV of a vessel (in pristine condition) to keep it that way.

If you don't you will lose about the same amount in FMV, so you may as well spend the money to be on a nice boat, instead of a run-down one.

For example, if one spends $12,000 on upgrading to the latest electronics today, in 10 years, they will hopefully all still work, but really add no value to FMV. A typical vessel like yours is expected to have a proper suit of electronics that are fully functional, and neither new nor ancient. If the electronics are new, the vessel value is increased slightly, depending on how new. If the electronics are older, the vessel value is decreased slightly depending on how old.

In my experience, most people will learn to cope with, and rationalize, whatever they have.

If you hang around people who have more, you could find yourself wanting.

If you hang around people who have less, you could find yourself content.

Some of the happiest and saddest people on the planet, are those on tropical islands with no belongings nor money. It is all perspective.

What brings you joy? Material things, envy of others, adventure, simple pleasures. The answers to these questions will have a huge impact on your (and your partners) personal answers.

[Captain Randy]

Great thoughts and advise. We are not to concerned with medicare at this point since we plan on being out of the country and will deal with it if we ever return. So I will put it out there as I completed the budget forecast scenarios for departure 12/31/18 and 12/31/19. We really, really want to leave end of this year but as you can see by the forecast it is pretty compelling to depart 2019. Do we just cool our jets and bank the additional cash? We will be moving onto the boat in Long Beach and save and work until departure either way. So here are the numbers. What would you do and why........

12/31/18 Depart Mexico and South America

IRA $325K
Savings 20K
Monthly SS 1,400

21/31/19 Depart Mexico and South America

IRA $350K
Savings 140K
Monthly SS 1,400

[Cadence]

Originally Posted by Paul L

A few errors in your post. Medicare starts at age 65, independent of Social Security. Required minimum distributions start at 70 1/2.

My bad! It was 62. And you are correct it is 70 1/2 so it comes out to be the year you turn 71. What a stupid requirement. It's been awhile since I dealt with either.

[sailorboy1]

Well I hate to say it, but on that one 1 I would wait the extra year.

[Boosted]

Is it standard to not receive a pension in today’s workforce? Is that why people need to have a safe amount of savings?

I’ll have a pension so that’s my plan...everything else is foreign to me.

[Paul L]

Originally Posted by Captain Randy

Great thoughts and advise. We are not to concerned with medicare at this point since we plan on being out of the country and will deal with it if we ever return. So I will put it out there as I completed the budget forecast scenarios for departure 12/31/18 and 12/31/19. We really, really want to leave end of this year but as you can see by the forecast it is pretty compelling to depart 2019. Do we just cool our jets and bank the additional cash? We will be moving onto the boat in Long Beach and save and work until departure either way. So here are the numbers. What would you do and why........

12/31/18 Depart Mexico and South America

IRA $325K
Savings 20K
Monthly SS 1,400

21/31/19 Depart Mexico and South America

IRA $350K
Savings 140K
Monthly SS 1,400

Your savings will increase by 700% over a year period. You will be living on the boat iin an area where the weather is mellow and learning to enjoy the life style. It's only a year. Seems like a no brainer to me.

[a64pilot]

I’d say the 4% thing can be carried on forever, and the principle never touched. Or could have been for the last 100 yrs unless I’m mistaken anyway.
But it doesn’t matter, all that matters is if you can come up with the required amount continuously, by whatever means, hopefully legal and ethical means .
I have seen but honestly not met many younger couples on mid 30’ sailboats that from appearances are just getting by, assumption is that as long as their health holds and nothing catastrophic happens that they can continue for a long time, varying living styles based on cash flow at the time.

You need to get yourself on a cash budget. By that I mean have no payments, or as few as you can, maybe Insurence.
Once your there you can control costs much better cruising than you can living on land, or it’s my opinion you can.
On a land life, you have usually a mortgage or rent, a car, gasoline, taxes on everything, water bill, garbage bill, electric bill, possibly gas bill, cell phone, internet, TV, list goes on and on, but it all adds up to a pretty big chunk, every month.
If your on a paid for boat, you don’t have to have any of those bills, you can anchor out and cut cost of living to the bone to recover from a big expense like a major engine repair. You can’t do that as easily living on land.
Plus you can relocate to a very inexpensive cost of living area, you can move to where you can live pretty good on dual SS income, or not. Your choice.

[Cadence]

Originally Posted by Paul L

A few errors in your post. Medicare starts at age 65, independent of Social Security. Required minimum distributions start at 70 1/2.

The OP seems to think SS is 62 for he and his wife. Is there an age at which people are grandfathered for the 62? As I said I'm not his CPA, lucky him, I had just thrown out some things to consider.

[Drew13440]

Originally Posted by Captain Randy

Great thoughts and advise. We are not to concerned with medicare at this point since we plan on being out of the country and will deal with it if we ever return. So I will put it out there as I completed the budget forecast scenarios for departure 12/31/18 and 12/31/19. We really, really want to leave end of this year but as you can see by the forecast it is pretty compelling to depart 2019. Do we just cool our jets and bank the additional cash? We will be moving onto the boat in Long Beach and save and work until departure either way. So here are the numbers. What would you do and why........

12/31/18 Depart Mexico and South America

IRA $325K
Savings 20K
Monthly SS 1,400

21/31/19 Depart Mexico and South America

IRA $350K
Savings 140K
Monthly SS 1,400

20k savings is not enough to supplement wife's SS for three full years. You'll wind up withdrawing IRA funds which will be taxed as income when the first emergency hits (I hear dinghies and outboards get stolen sometimes and that stuff breaks).

Why be arbitrary with dates? Split the difference and go when you've got at least 80k in regular savings.