How much cash to retire?

[Joli]

Originally Posted by DeValency

Enjoy the cruising plans as long as you can.

There was no mandate to purchase overpriced plans. Trump did not make any change, in spite of his endless efforts. The ability to shop for a much cheaper premiums, regardless of any pre-existing conditions, as you do @ $1,000/month is one of the main achievements of the ACA. Before that, you could end up with nothing, if not insured through an employer.

The ACA is not perfect, but when the country is making one huge, single critical change since President Johnson administration rolled Medicare in the 60's (with the same level of pushback from the other side), you need many years to get to what civilized countries in Europe with health outcomes that are about 30 above the US - watch the facts: https://www.apha.org/topics-and-issues/health-rankings
We are ranked #34 in the world in life expectancy, right behind Lebanon(!) and worse in all other health measures.

There are many reasons for that but the main are the lack of public health coverage and access, especially at poor areas and states - the reason? Leaving health insurance to the "free market" only. Politicians supported by drug companies and physician, hospital networks, are blocking Medicare from negotiating drug prices and healthcare services and the private insurers just follow and roll the costs on the poor consumer - me and you...

Personally, I can live with that and more import, happy to know that less fortunate 20M Americans are now fully covered.

- My single insurance premium is approx $750/month with a max $6,000 out of pocket, all preventive care and other basic services are 100% covered. Thankfully I chose to live in Massachusetts and not in Florida! When retire one day, Medicare plus a modest supplement insurance will continue to provide the reasonable coverage. The ACA and any extensions, as planned by the DNC, will hopefully assure even better health coverage by that time.

I'm not here to argue politics. I've only informed the cost of buying an ACA policy. The mandate to purchase under the penalty of law was removed by the Trump administration which allowed us to buy temporary policies that were substantially less then having to buy ACA policies (those were shown).

I prefer the private markets, others prefer government control of healthcare.

Wishing you great sailing and health.

Joli
C&C 61
US39390

[Mike OReilly]

Originally Posted by Paul L

I would guess that someone who is going to be successful cruising in a very basic and simplistic way would have already been living a basic and simplistic land life. So there wouldn't be much to give up.

I believe you're correct Paul. Most of us don't really change when we move from a land life to a cruising life. We carry our lifestyles with us. Most here are used to living at least an upper middle class lifestyle; many here at a much higher level. Most have spent a lifetime accumulating wealth and luxury. So why would this change when moving onto a boat?

If you want to live frugally on the water, then learn to do so on land first. But that's hard to do when you don't have to. And if you have the resources, why would you?

I know if I had more, I would spend more. But I don't, and never have. So I've learned how to live well with what I have. It's easy -- when you have no other choice .

[Sailor 99]

Originally Posted by Mike OReilly

It's unfortunate you characterized it this negative way. You know... you don't have to put other people down just to justify your choices.

It was not meant as a put down at all all though I can see how you might think that when I re-read my text.

If all you have is 500 a month going out for lunch is a big deal and you have to be very very careful. You have 17 dollars a day to make it through the month. I think those people struggle hard and I don't envy them or look down on them.

I know people who are millionaires and I know people who make 30K a year. I like the 30K guys better. They are way more realistic, more real and they don't think they are better than everyone else.

This world we live in is not a very fair world. Being poor is more likely to be a result of not really getting many or any breaks in life. Being rich does not mean you are smart or even hard working. It means you maybe had some ideas but mostly that you got breaks and were lucky along the way.

Considering where I started I did okay. I could have done better, and I could have done worse, but I did okay. I had a fair bit of luck along the way and am under no impression that I did it on my own.

[Simi 60]

Originally Posted by Mike OReilly

If you want to live frugally on the water, then learn to do so on land first. But that's hard to do when you don't have to. And if you have the resources, why would you?.

I don't like work, I saw it as life wasted.
Shiny baubles and trinkets , new cars, the latest i product and keeping up with the Jones never did anything for me or, thankfully, my partner

I know if I had more, I would spend more. But I don't, and never have. So I've learned how to live well with what I have. It's easy -- when you have no other choice :wink

:


We have lived frugally all our life and find now that we have an increasing income stream, because of prior frugality we have difficulties actually spending.
Its a habit that's difficult to break.

That and there are no restaurants and shops on the water. (-;

[Mike OReilly]

Originally Posted by Dark Horse

It was not meant as a put down at all all though I can see how you might think that when I re-read my text.

Fair enough. I know it's all too easy to miscommunicate, or mis-read, a message here. I appreciate your elaboration. Thank you. Clearly you understand well what it means to live with less.

Originally Posted by Simi 60

I don't like work, I saw it as life wasted.
Shiny baubles and trinkets , new cars, the latest i product and keeping up with the Jones never did anything for me or, thankfully, my partner

We have lived frugally all our life and find now that we have an increasing income stream, because of prior frugality we have difficulties actually spending. Its a habit that's difficult to break.

That and there are no restaurants and shops on the water. (-;

Well said.

I think the greatest thing any of us in the developed world can achieve is the ability to say no to the cultural demands of constant more, More, MORE! This demand keeps most of us locked on our gilded tread mills, perpetually chasing more wealth, more comforts, more ROI, more...

If we all just learned to live with a little less, we'd get what most us really want: more freedom.

[daletournier]

Originally Posted by Mike OReilly

Exactly . It's all about knowing what is truly important to you. There's no one right answer for everyone. As long as people are making the decisions with 'eyes wide open,' and understanding the trade offs, then it's all good.

That's it Mike, most arent! I've been home for less than a week and are blown away by the "busyness" of those around me. They p.... their time away at a rapid rate in order to be like everyone else. A 30 year mortgage that enslaves them , endless amount of stuff that sits around gathering dust although real life minutes were sacrificed in order to require the "stuff".....I like comfort as well BUT arent willing to sacrifice my life to get it.

In regards to "eyes wide open" ,most are busy squandering time , it takes time to sit and ponder the costs associated with the hectic lifestyle of busyness in the quest for more.

[seandepagnier]

What an interesting thread.


When I got to the philipines, I asked someone working on a boat how much he got paid and he replied 1000 php per month. This is approximately $20 per month income. In this country I met other cruisers also and it cost somewhere from $1 - $2 per day to buy food which is 90% of the total expenses. In other countries it cost less and on ocean passages spent nothing!



So it is not $500 a month but $500 per year and with multiplication you can see how much money is required to retire into this.

[wingssail]

Originally Posted by Dark Horse

...Then there is the question: do you want to be world cruisers and never come home or do you want a home base...

How about being world cruisers and having you home with you all the time?

I have no interest in laying up the boat and going back to dirt living for half of each year. The boat does better too when it is not abandoned.

It also reduces the amount of wealth one needs to be a cruiser.

Like they all said, people have different preferences.

[wingssail]

Originally Posted by seandepagnier

What an interesting thread.


When I got to the philipines, I asked someone working on a boat how much he got paid and he replied 1000 php per month. This is approximately $20 per month income. In this country I met other cruisers also and it cost somewhere from $1 - $2 per day to buy food which is 90% of the total expenses. In other countries it cost less and on ocean passages spent nothing!

So it is not $500 a month but $500 per year and with multiplication you can see how much money is required to retire into this.

Oh Yeah, back to Sean's world.

[Gadagirl]

Originally Posted by valhalla360

A bit of cause and effect going on.

Realistically, anyone disciplined enough to save 15% isn't going to be making minimum wage for long. It's a math example to show how if you are smart about budgeting, you can do well even on a mall income.

Of course, a couple working 40hr/wk at $10/hr is going to be pulling in around $40k/yr and paying minimal income tax. That works out pretty close to our annual expense budget. We live a pretty nice lifestyle and could easily trim out 15%, so not sure where "barely enough to live on" comes from.

Ecept that $40k is gross income before tax. So after tax income is substantially lower. I have consistently paid %34 between Federeral and state taxes. Subtract another %15 ? That is living on half of your gross income. Not saying they couldn't save something if they were frugal. But i would peg their ability at saving maybe, maybe, %3.

[wingssail]

Originally Posted by Gadagirl

Ecept that $40k is gross income before tax. So after tax income is substantially lower. I have consistently paid %34 between Federeral and state taxes. Subtract another %15 ? That is living on half of your gross income. Not saying they couldn't save something if they were frugal. But i would peg their ability at saving maybe, maybe, %3.

Not that I agree with Valhalla360, but they did state that one would be paying minimal taxes, which I think is correct.

However that does not really allow them to build a big nest egg. They can get by, $40,000 per year is OK in most countries, but to go cruising you need to buy a boat, outfit it, and save for a cruising kitty. If the commenters on this thread are to believed you need a million dollars, maybe 2 or 3, (one guy suggested 10).

OK say $500,000 and a boat which will cost you minimum of $50,000 (more like $100,000, or 1.5 million for that nice new cat) Plus equip it.

So, to my way of thinking working for a living at a minimum wage is not going to get you to the point of going cruising and living off of your savings for the rest of your life.

For that you need a good job or a successful business.

[valhalla360]

Originally Posted by Gadagirl

Ecept that $40k is gross income before tax. So after tax income is substantially lower. I have consistently paid %34 between Federeral and state taxes. Subtract another %15 ? That is living on half of your gross income. Not saying they couldn't save something if they were frugal. But i would peg their ability at saving maybe, maybe, %3.

Already considered that when I posted...

If you are paying 34% making $40k/yr, you really need to take a math class. Heck, we typically get in the low 6 figures and don't pay anything close to 34% with no unusual deductions.

Federal tax they get $24k standard deduction, so run the numbers and that's 4% of gross, you are paying as taxes. (use a qualified plan to save, and your effective tax rate drops by another percent or so).

States vary but with a few outliers, most are between 0-5% for the top bracket and there are still deductions and other ways to reduce that. But making $40k isn't likely to get you in the top bracket, so even in the extreme states, you aren't likely to break 10% in total income taxes.

If you are paying more than 10% total income tax with a combined income of $40k, you should really consider moving to a low income tax state and now it's around 4% total that you are paying...but that takes a little planning and an organized approach.

Also, if you are used to living on say $35k take home (to cover income tax plus 10% retirement savings), you don't need to save a million, especially after factoring in social security which will generate something on the order of $1200/month/person based on each making $20k/yr (inflation adjusted over time...or about $29k/yr SS). This means you need enough to generate about $6k/yr from your savings...using the 4% rule (which I dislike but makes an easy calculation), you only need about $150k saved to generate $35k per year...and you are likely paying 0% income tax in retirement.

Yes, it's very much possible to save for a comfortable (not rich) retirement making only minimum wage...but again as I said before, someone disciplined enough to budget and save 10-15% won't be making minimum wage for long.

[Mike OReilly]

Originally Posted by daletournier

That's it Mike, most arent! I've been home for less than a week and are blown away by the "busyness" of those around me. They p.... their time away at a rapid rate in order to be like everyone else. A 30 year mortgage that enslaves them , endless amount of stuff that sits around gathering dust although real life minutes were sacrificed in order to require the "stuff".....I like comfort as well BUT arent willing to sacrifice my life to get it.

In regards to "eyes wide open" ,most are busy squandering time , it takes time to sit and ponder the costs associated with the hectic lifestyle of busyness in the quest for more.

No surprise, but I fully agree with you Dale . My wish for everyone is that they live their lives "eyes wide open" with regard to the tradeoffs they're making. We all trade life for resources, or wealth if you will. But without a sense of what is enough, there is no end to more. This is the sickness our societies suffer from, and killing us, and the biosphere in general.

[valhalla360]

Originally Posted by wingssail

Not that I agree with Valhalla360, but they did state that one would be paying minimal taxes, which I think is correct.

However that does not really allow them to build a big nest egg. They can get by, $40,000 per year is OK in most countries, but to go cruising you need to buy a boat, outfit it, and save for a cruising kitty. If the commenters on this thread are to believed you need a million dollars, maybe 2 or 3, (one guy suggested 10).

OK say $500,000 and a boat which will cost you minimum of $50,000 (more like $100,000, or 1.5 million for that nice new cat) Plus equip it.

So, to my way of thinking working for a living at a minimum wage is not going to get you to the point of going cruising and living off of your savings for the rest of your life.

For that you need a good job or a successful business.

The luxury of retiring early on a new high end expedition yacht is going to be a challenge but drop back to a small inexpensive boat and learn to do the work yourself, anchoring out mostly coastal cruising...and even $500k is more than you "need". Now it moves into the question of how do you "want" to live.

Now if you wait until your early 60's, compounding will have done it's job and you likely will have somewhere around $1mil to work with.

[sailorboy1]

Originally Posted by Joli

.

I prefer the private markets, others prefer government control of healthcare.

My ACA plan IS a private market plan no different really than any plan i had through my employment over the years.