How much cash to retire?

[Firefly44]

I think you look to be located in USA. If so, you need to carefully look at health care costs and how you will be covered especially between retirement and medicare age.

Also realize that you may be a lucky one who has no major health issues, or you or your wife may develop something serious which can ruin a financial plan if you haven't taken proper planning...

Dave

[wingssail]

Originally Posted by Trimaran Ken

The biggest expense is health care insurance. Many people have health care through their employers. Even if you have your own now, the yearly rates keep going up and up based on you age.

The closer you get to Medicare age the higher your premiums will go. Rates are somewhat lower if you go with a plan that requires you to go to doctors who are in their plan, but this doesn't work if you are traveling on a boat.

You can risk it all and go with no insurance, but one serious illness or accident will bankrupt you.

Ken
===

You see Ken, There is a flaw in that. If you live in third world countries you can go without medical insurance because the average monthly costs will be far less than the insurance. And you don't sacrifice good care either. Even the poorest countries have good medical facilities and doctors for the wealthy, and it's still way cheaper than "back home'.

But that's only part of the plan:
1. You can plan on returning to your home country for major medical expenses. In our case this would be the USA.
2. If your medical emergency is so critical that you cannot fly home, then you're going to have to spend what it takes. It is a risk.

Either of these scenarios will be a significant hit on our retirement fund, and I know it will happen at some time in our future. We'll pay for that hit when it happens and see how it goes but it reinforces the idea that we should keep the capital untouched. We likely will need it for medical at some time in our future, or we might not.

[BlackHeron]

If you have a prior medical condition and allow your US medical insurance to gap you may never be able to gain coverage for it again at a reasonable cost if you wish to repatriate to the USA again for any reason.

Now you can't go home or else face a death sentence due to lack of coverage for an otherwise treatable but prohibitively-expensive procedure/treatment which may kill you if go without it due to lack of coverage.

[Paul L]

Originally Posted by wingssail

You see Ken, There is a flaw in that. If you live in third world countries you can go without medical insurance because the average monthly costs will be far less than the insurance. And you don't sacrifice good care either. Even the poorest countries have good medical facilities and doctors for the wealthy, and it's still way cheaper than "back home'.

But that's only part of the plan:
1. You can plan on returning to your home country for major medical expenses. In our case this would be the USA.
2. If your medical emergency is so critical that you cannot fly home, then you're going to have to spend what it takes. It is a risk.

Either of these scenarios will be a significant hit on our retirement fund, and I know it will happen at some time in our future. We'll pay for that hit when it happens and see how it goes but it reinforces the idea that we should keep the capital untouched. We likely will need it for medical at some time in our future, or we might not.

It is true that many countries you might cruise in have very good, reasonably priced health care. Panama, Malaysia, Thailand all come to mind. I have seen cruisers get atrocious care in some places, completely misdiagnosing debilitating diseases that were pretty obvious. So no, not in all poor countries are you going to get even reasonable care.


If you are planning to repatriate to the US for serious or long term care, then you'll need to maintain US insurance.

[Stu Jackson]

Originally Posted by Leighpilot

A Biden adjustment ? My taxes went up $6000 with the tax “ cut “ we got in PA.

Gee, those "tax cuts Rs" lied to you again? What part of capping mortgage deductions and reducing or eliminating other deductions to hurt blue states didn't ya get? Oh, and they waited to kick them in until after the goons who thought they'd actually be getting a tax cut thought so because their take home pay rose a tad and they were too stupid to look at their total tax bill. Can't beat stupid...

[DeValency]

Originally Posted by BlackHeron

If you have a prior medical condition and allow your US medical insurance to gap you may never be able to gain coverage for it again at a reasonable cost if you wish to repatriate to the USA again for any reason.

Now you can't go home or else face a death sentence due to lack of coverage for an otherwise treatable but prohibitively-expensive procedure/treatment which may kill you if go without it due to lack of coverage.

I thought the ACA (“Obama Care”) ended the horrible care “insurance” fraud we had in the US. Now, when reinstalling a plan for those not covered privately (including via employers, state programs etc.) or Medicare, there is a cap to a new premium any insurer can charge. There are definitely quite few improvements required but for most prior medical conditions cases, this was a life saving change, not to mention the risk of bankruptcy.

And right in these days the RNC is again trying to repeal it with the help of the Supreme Court. Our EU fellows should be grateful for their real healthcare system (vs. barely the sick-care over the US).

[Sailor 99]

Originally Posted by DeValency

Good to know you know me so well! Or more accurately, can't read between lines, or worse, lack a sense of humor

If you look at the vague question of the OP, you might understand it. - to be blunt; "stupid questions get stupid answers".

BTW - he never even bothered to respond to the many good suggestions, including your own here.

That's ok - trolls are an endless source of amusement to bored cruisers at the era of pandemic.

No insult intended. We all value things differently. I guess I know too many people who never seem to get enough and park their motor homes in Walmart every night or pump their sewage into the local farmers field because they will not buy a new septic system but will put in an in ground pool.

Apologies if I offended...

BTW, If you think this guy might be trolling, you should see the one with the Albert 37 who thinks he is going to do what appears to be a complete refurbishment in 3 months. He might be serious but it seems unbelievable to me.

[johnboyrtw]

Assuming house/houses paid off, boat paid off, no kids in college. I would get an annuity that pays 100k a year to age 85 that has survivor benefits of the same amount for your wife. Then at age 67 take your social security, hopefully around 3 k a month. Then I would have 1.5 mil in a 401k/ira. If the democrats take over then do-not count on getting any SS. That would probably take care of your needs.

[Sailor 99]

Originally Posted by beerster69

I'm going to try to live on $60K per year.

Lots of people do and even more live on less in both Canada and the US. I think you could even cruise the world with it if your careful. You don't have to be cheap either. Just frugal.


The ones I don't get are the ones cruising on 500 a month. That's less than $20 a day.

[Sailor 99]

Originally Posted by johnboyrtw

Assuming house/houses paid off, boat paid off, no kids in college. I would get an annuity that pays 100k a year to age 85 that has survivor benefits of the same amount for your wife. Then at age 67 take your social security, hopefully around 3 k a month. Then I would have 1.5 mil in a 401k/ira. If the democrats take over then do-not count on getting any SS. That would probably take care of your needs.

What would you do if you and your wife lived to be 90-95? In this day and age there are lots who do.

My calculations on a spread sheet similar to what I posted here a page back show me and my wife running out of money at 102 and 100 respectively. House not touched and still getting government pension.

I don't want to die early but I don't want to run out of money either. Depending on the good will and charity of others is not for me.

[Sailor 99]

Originally Posted by garychurch

Figure $40-$50K for each million invested. Does not include social security. Max benefits at 70 years of age will give you almost another $50k per year. Saving should not be included due to poor rate of returns currently.

Age 70 with $2 million invested and full max social security should generate about $150,000 in annual income. With another $250,000 in savings retirement should be comfortable provided you don't have unreasonable living expenses or a high debt load.

There are 2 aspects to dividends. There are the value of the dividends you make when you first invest and then there are the value of the dividends when you start taking them out 10-20 yrs later. If you buy dividend growth stocks then you money should be making significantly more for you 10 yrs down the road. A million at 39 will make 40-50k but if you let it sit there for 10 yrs the same package of stocks should be making you 80-100k

[Tetepare]

My kid brother has one, maybe two days left. And I don’t mean work. 50 and never smoked. 45 days ago diagnosed with stage 4 and now here I sit saying goodbye.

I know how much money I need for retirement. It’s whatever is on the accounts right now. I don’t want to be one of those who didn’t make it to the retirement they dreamed of.

[DeValency]

Originally Posted by Dark Horse

No insult intended. We all value things differently. I guess I know too many people who never seem to get enough and park their motor homes in Walmart every night or pump their sewage into the local farmers field because they will not buy a new septic system but will put in an in ground pool.

Apologies if I offended...

BTW, If you think this guy might be trolling, you should see the one with the Albert 37 who thinks he is going to do what appears to be a complete refurbishment in 3 months. He might be serious but it seems unbelievable to me.

Thanks, no need to apologize - we are all sailors

Guess I’m lucky not to know any motor home owner - motor boat owners are more that enough ooops. Sorry boaters - just kidding here.

Regardless - to this well beaten topic (hooray to the troll!) it is an important matter. I’m all for it for those who like some kind of camping. I had enough in my years of military service. I think a year round cruising and liveaboard for me would only work on a 60’+ super duper Swan and alike - and I don’t see it happening.

The number of different sets of needs and tastes here is at least double the number of CF members. It was good to read the comments highlighting the important considerations. Hope the interested and dreamers will read it carefully. I’ve seen too many live aboard with broken dreams - quite sad .

[merrydolphin]

Don’t sweat it, just do it. You only live once and we get waaaaaly to hung up on money.
My wife and I worked up until 45. Then quit with a paid for KP 44. It cost 92000 in 1992. The boat then 14 yrs old. Didn’t look back. Never regretted it. Yes, my business partners have a lot more money than me now. SO WHAT. We live quite well, still having adventures in our late seventies. My primary business partner is STILL WORKING! Yeah, he has a lot more money. But guess what..........you can’t take it with you. We started out with about 250K in IRA. We had good investments. Still living on it along with SS. We occasionally did some part time work. I am a USSailing instructor, Scuba instructor, musician. A little occasional sales and marketing work. Nothing serious or anything close to full time. Haven’t even done that in about 10 yrs. No problem. Ride motorcycles, sail, scuba. Live simple. NEVER buy anything new!!! Right now fulltiming in a Diesel pusher motorhome. Very much enjoying life much more than my buisness partner. Another business partner went on to make probable in excess of 100 million. He died at 61 of alcoholism. We Americans are so spoiled. You are talking about how many million you need!! That’s seems very excessive ((to me). I just don’t need a lot of money to be very happy. A quarter of a million has given me a very happy life. I have many friends and associate that make a lot of money and are very jealous of our lifestyle. We want for nothing. Go with what you have and learn to live and enjoy life with what you have.

[Brdog]

I agree with many people that this is a question that only you can answer but knowing the numbers you posted I think it’s possible to make some educated guesses.

I like the earlier posted trick of multiplying annual spending by 25. I went through a lot of real math to come to the same numbers lol.

My rule of thumb is relatively conservative investments in stocks or real estate should spin off around $40k per million invested and should still be able to keep up with inflation and some temporary market crashes etc. So, if you can live on say $80k/year and live the life you want with that, you would need approx $2 million invested.

For what it’s worth, the market has been much better than that in the last few years which makes it easier but historically on average I think that’s a good rule of thumb. Just make sure you’re somewhere cheap if/when the economy falls apart lol.

I’ll be in that range within a year but we currently spend WAY more than $80k annually. So the question is, how much do you need to feel comfortable.?

Like many families we spend to the level of our income and my wife and I are both well paid. I think we can live good lives on way less income if we are in a position of not being able to buy so much stuff (boat size stops the purchase of toys at some point).

People keep living longer and longer. Personally I feel any retirement plan that’s worth doing has to self sustain. Planning on burning it down towards a presumed end of life sounds too dangerous to me. I don’t want to worry about rent starting in my mid eighties.

My .02 for the week.