Hi all, I would like to hear your opinions about the numbers/plan below. The wife and I are obsessive planners and very disciplined. We like planning way ahead (we have successfully maintained a 10 year travel plan for many many years) and we are now starting the process of planning for retirement
. The goal is to retire at 55 and move into a boat
with no boat
payments (owned outright) while also charting frequently and as cheaply as possible from now until retirement
Assume the following:
- Planned retirement age 55
- Want to retire to a mid size (39-40) Cat that is fully paid for (no debt) in the Caribbean
- Want to continue charting every year as much as possible until retirement.
- The plan below does not affect our current
retirement savings plan, house payments, etc. Before we got bitten with the liveaboard
bug we were on track to retire at 55 with sizable savings and no mortgage on our house. We do not want to do anything that impacts our current track. Thus, we do not want to use ANY of our current savings
a boat and we do not want to allocate any of our standard future retirement savings for the boat purchase
(I told you we're disciplined!). Our self-imposed rule
is that if we want to do this, we will have to make changes to our current life style for the next 10 years in order to make our boat retirement plan happen. So here is the plan:
During the next 5 years (age 45-50):
1-2 weeks per year at a cost of $10,000 per year (assumes sharing costs with friends for most charters)
2. Invest/save additional $1500 per month at a conservative 5% return. These are 1,500 that are currently being wasted in unnecessary stuff. 5% is way below what we have achieved during the last 15 years (even during the recession).
At the end of 5 years (age 50) we would have spent $50,000 chartering and would have a "boat purchase kitty" of about $100,000.
In 5 years (age 50):
- Use $100,000 for down payment on new Mooring Leopard
390 or 400 at $500,000.
- Put boat in guarantee revenue plan with Moorings for 5 years.
- During those five years, pay an additional $3,000 per month to the loan in order to be debt free by the end of the program. The 3K will come from the original 1,500 savings plus reductions in our vacation budget
since now we would be charting more for relatively free during times we used to be in other types of vacations.
4 weeks or so each year and private sell 2 weeks. Put funds from private sale
(total of $40,000 est?) into boat maintenance
kitty for when moorings program ends.
In 10 years (Age 55):
At the end of the 5 years mooring
program we would take the boat out of the program. We will fully own the boat worth $250,000 (50%). We would rent our house (fully paid by then), move into the boat, and use the house rental income
for boat living and maintenance
expenses. Between the maintenance kitty and our rental income
we would not have to touch our retirement savings for living expenses or boat related issues for many years.
In sum, by age 55 we would have paid a total of $330,000 (50K charter
, 100K down payment, 180K extra principal payments) to:
1. Chart 1-2 weeks/year for 5 years
2. Chart 4 weeks/year for another 5 years
3. Own a 5 year old boat worth $250,000. Although the boat would be ex-charter, there would be little surprises since we would have been highly involved in the yearly maintenance/assessment of the boat.
4. Have $40,000 or so in maintenance kitty
The plan above assumes we like the Leopard
39 or 40, but during the next 5 years we will be chartering many other boats, including some Lagoons, so we may decide that Moorings is not the best option if we want a different boat.
The most obvious alternative is to buy a 5 year old boat in cash when ready for retirement. I've seen various posts saying "If your goal is to have a 5 year old boat in 5 years then buy a 5 year old boat in 5 years instead of buying
a new one via the moorings program" This makes sense, so I wanted to see how the numbers would look in my situation.
The numbers for the alternative:
- Continue charting 1-2 weeks per year for 10 years (age 45 to 55) = $100,000
- Save/Invest $1500 per month for 10 years in order to have $250K for cash boat purchase.
By age 55 we would have paid $350,000 for
1.Chart 1-2 weeks/year for 10 years
2. Own 5 year old ex charter boat worth $250,000 with possible surprises since we would not have been involved in its maintenance during the charter years.
3. No maintenance kitty
So this alternative costs more money
, leads to fewer charter weeks before retirement, and results in no extra maintenance kitty. If I wanted a maintenance kitty, then the total costs would increase to $390,000.
Please note that we are not "rich", at least not based on the Republican's definition of rich. We just have very solid jobs, no kids
, live way below our means, and are very disciplined with our money
. I say this because alternatives that involve just writing a check for many thousands of dollars for x or Y without careful multi-year planning and saving are not feasible.
That said, what other alternatives would you suggest? Are there any obvious issues I'm missing that would make my original plan unfeasible?
Thank you so much for any feedback!