Planning cruising and savings

[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

[dwedeking2]

The difficulty of these types of questions are that they are very individualistic depending on your comfort level with risk and the lifestyle you're used to or call bare minimum.

My plan A has me setting off with approximately $200,000 in savings to last from 55 to 65 @ $1000 per month and some buffer for major maintenance like standing rig etc. and then survive off SS. This would be after my refit is finished (so just living expenses and upkeep, all the major projects done).

My plan B has me leaving with whatever I have in the bank when I'm let go from this job, sailing until the money is low and if I can't support myself where I am through odd jobs then coming back to the states and finding work until SS kicks in. In this instance I'll keep enough in reserve that I can get back to family and friends to restart as a worse case scenario.

[JPA Cate]

"Cushion" that one is comfortable with really is a very individual thing, and you and your wife will have to work that out together: you and she may feel very differently about it.

That said, imho, it is really important, if you are together in going cruising, the longer you wait, the more likely you are to get blindsided by a major health event.

Remember to anticipate annual inflation of roughly 10 % for all the costs.

Good luck with your planning.

Ann

[sailorboy1]

I’m 58 and my wife is 57 and we have been full time cruising for 20 months now.

I’m comfort having 1 year of budgeted expenses in cash available.

But in the OPs position I would factor in 401k or IRA money as part of cash cushion because the money is available as a pentaly free source due to their ages.

[Captain Randy]

All great points and thank you for sharing your insights. We are taught for a land based retirement by financial advisors that one may need a million or two to retire but that is an amount to sustain a current land based life style and afford to travel by plane and hotel. On a cruising lifestyle we are taught living frugally the needs can be far less with travel included. Just trying to wrap my head around we will never have a million or more and that a couple hundred grand in the bank and social security covering the monthly expenses is plenty to sail away and even fly home occasionally to visit the grand kids. Been at the career for 40 plus years and do not want to ever go back to work because we blew through or outlived our savings to quickly. Ahhhhh if we only knew the end date for life lol........
Thanks

[Drew13440]

I would be perfectly comfortable with 40k income and a couple hundred grand as a cushion. But, at 59 you've got a six year window before Medicare kicks in. I would want some kind of insurance against a serious health issue as noted above. It could easily wipe a person out, financially.

[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.

[Cadence]

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

Plan on paying for a Medicare supplement. I think you need to be on SS for two years before getting Medicare which will come off the top of you SS. And plan on maintaining health insurance till then.
Don't touch an IRA, what you probably have is well above today's interest rates? You need to draw from them in the year you become 71 1/2, the % I have no idea, if you don't the penalty is exorbitant We just cash the checks of the minimum withdrawal.
Just things to keep in mind or check out. I'm certainly not your CPA.

[letsgetsailing3]

The cost to retire?

All you've got.

The cost to cruise?

Again, all you've got.

Your plan seems completely solid. Pick a budget, and live within it. You've got a pretty good size boat, so set aside some for maintenance. After that, it's up to you how luxuriously you'd like to travel, eat, and spend on dock fees.

With the numbers you're throwing around, you've got enough, so it's up to you when you want the adventure to start. I think the advice there is "go small, go now".

Whatever your budget, the rule of thumb seems to be a 6 months cushion of living expenses over your anticipated cash flow and maintenance fund, as a minimum. Over that is comfort level.

If you wait too long, you'll be like the folks I spoke with yesterday, who bought an RV last year and are now selling it in "like new" condition, as the husband is now too feeble to travel.

I didn't touch health care, because that's a whole different topic.

[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

[Dougtiff]

The two of you can live on your wife's income just fine, unless you go out every evening and dine.

[a64pilot]

It is a damned if you do, damned if you don’t thing.
We Retired early, maybe should have waited and stocked up more money, but who knows?
Didn’t even really start cruising, was on the way to Mexico when some dirt bag ran over our Son on his bicycle and left him.
So we are now taking care of him, but it now looks as if he will be able to return to work.
Who would have planned on this as a possibility?
My take is you cover things that are in your opinion likely events, don’t sugar coat it, and leave when you have those assets.

Most wait until it’s too late really, and seriously curtail their plans based on age and infirmities. I have yet to meet someone who said they should have waited, so it seems that on average most wait either long enough or too long.

However, have a bailout plan, just in case one of you decides this is not the life for you, that happens more often then you may think.
If done on the cheap, it’s not necessarily an easy life, it’s not all sitting on the beach sipping your drink, but it sometimes is.

[MidwestRefugee]

I personally have no idea but from what I have read your numbers look good. I would ask that you do occasionally update us here as how well your voyages are working out, adventures as well as expenses.
In less than 2 years I will be retiring and doing the same as you.

[Captain Randy]

You all have brought up some excellent points (as always) of view and I really appreciate. I guess when you spend your whole life working the grind, saving and I have never really gone with out a paycheck nor drawn unemployment it seems well just weird. So with that we continue to get the boat ready and myself mentally to cut the pay cord. I know I don't like to be broke so I will have to live on a budget, get a catastrophic care medical policy and keep prudent reserves in the event one of us falls ill or becomes disenchanted with cruising. It helps to know that it seems that I have enough in the bank and a monthly plan. And Midwest I will of course keep the group apprised along the way.

[Paul L]

Originally Posted by Cadence

Plan on paying for a Medicare supplement. I think you need to be on SS for two years before getting Medicare which will come off the top of you SS. And plan on maintaining health insurance till then.
Don't touch an IRA, what you probably have is well above today's interest rates? You need to draw from them in the year you become 71 1/2, the % I have no idea, if you don't the penalty is exorbitant We just cash the checks of the minimum withdrawal.
Just things to keep in mind or check out. I'm certainly not your CPA.

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