How much cash to retire?

[wingssail]

Originally Posted by 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.

This is the best comment on this thread.

[wingssail]

Originally Posted by Paul L

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.

And New Zealand, Hong Kong, Australia, South Africa, India, French Polynesia, Brazil, many locations in the Caribbean, Mexico, Cost Rica, parts of Indonesia, Columbia and many countries in South America. In fact very few countries I've been to (and we've sailed to 35 countries) didn't have impressive hospitals, competent doctors, and modern diagnostic equipment well in evidence because they all have a wealthy elite which demands it and can pay for it. Usually, however, it is inexpensive by our standards. Yes, there are some where their own people fly out of the country for treatment. We've taken some chances in those countries I guess but in 24 years of cruising outside of the US we have not talked to anyone who said they had the kind of "atrocious care" you refer to.

Honestly, when considering the cost of health care and health insurance in the US and looking at the outcomes compared with every other developed country in the world, I'm pretty happy to stay out of that system as long as I can.

As to our option of getting care for serious medical problems in the US without insurance, we now (and for many years) have been enrolled in Medicare. We believe, (and we have seen it work for friends recently) that we can return and get good care. For long term care, we'd probably seek that in Mexico.

[wingssail]

Originally Posted by NPCampbell

I hope you're not correct but you probably are. It's sad because it's relatively easy to make a sizeable nest egg by retirement age. I have this spreadsheet I use to prove this point.

Assuming:
1) you started flipping burgers at 18 in 1971 making minimum wage ($1.60/hr)
2) you never made more than minimum wage at any point of your career
3) you retired this year at 67
4) you had the wherewithal to invest 15% of your salary in the S&P500 every year

You'd be a millionaire.

Obviously, you would have had to been able to survive on minimum wage your entire life which would be no easy task but the point this example shows is that someone making the absolute minimum possible can save a million+.

Now don't get me wrong, I am a firm believer that, hard work , careful spending, and a bit of luck with some investments can produce a cruising nest egg.

But your example is not realistic: Most people at 18 aren't looking ahead and saving for retirement. (Maybe they should be, but it's pretty useless to look at someone who is 40 and telling them they should have started at 18, and since they didn't, tough luck!).

Secondly, living on minimum wages is really difficult and saving 15% just isn't in the cards.

Originally Posted by BlackHeron

Quit yer cryin' generation McFail.

Saving 15% of your income is as simple as only spending 85% of it.

Cut out all the junk you buy that you don't need. Drive that 35 year old car (or ride your bike and don't even own one.). Throw out the TV and the cable bill. Dump the cell phone plan if you need to.

Half the world lives on a couple of bucks a day. Give up the smokes, the grass, the booze, the Starbucks and the Avacado Toast. Stop McEating out altogether. Buy your clothes at the thrift store and give up the $250 tennie-runners and other fashion choices.

If you really want to then you can. It's as simple as that

I am not going to lecture people with barely enough to live on that they should live the life of an ascetic for 50 years so they can save 15%. I think that is too tough.

[markpierce]

Ten million $s of investments can generate something like $300K a year. Is that sufficient? Not needed if you spend your children's inheritance.

[Paul L]

Originally Posted by wingssail

And New Zealand, Hong Kong, Australia, South Africa, India, French Polynesia, Brazil, many locations in the Caribbean, Mexico, Cost Rica, parts of Indonesia, Columbia and many countries in South America. In fact very few countries I've been to (and we've sailed to 35 countries) didn't have impressive hospitals, competent doctors, and modern diagnostic equipment well in evidence because they all have a wealthy elite which demands it and can pay for it. Usually, however, it is inexpensive by our standards. Yes, there are some where their own people fly out of the country for treatment. We've taken some chances in those countries I guess but in 24 years of cruising outside of the US we have not talked to anyone who said they had the kind of "atrocious care" you refer to.

Honestly, when considering the cost of health care and health insurance in the US and looking at the outcomes compared with every other developed country in the world, I'm pretty happy to stay out of that system as long as I can.

As to our option of getting care for serious medical problems in the US without insurance, we now (and for many years) have been enrolled in Medicare. We believe, (and we have seen it work for friends recently) that we can return and get good care. For long term care, we'd probably seek that in Mexico.

Yep, there is some excellent health care at reasonable prices in many countries that cruisers typically cruise to and by US standards it is usually far cheaper. When in foreign country it is difficult to judge the standards or quality of care when approaches to medicine are different from your home country, language can be an issue and clear decision making can be difficult under the stress of serioius illness or accident. I would give you some details on the atrocious care but it is actually an on going incident and perhaps a bit raw. The diagnosis was made at the best hospital in the country. That said, we've had fine medical care outside the US in Bonaire, Panama, New Zealand, Australia and Malaysia while cruising, all at far lower rates than in the US,

[DeValency]

Originally Posted by wingssail

Now don't get me wrong, I am a firm believer that, hard work , careful spending, and a bit of luck with some investments can produce a cruising nest egg.

But your example is not realistic: Most people at 18 aren't looking ahead and saving for retirement. (Maybe they should be, but it's pretty useless to look at someone who is 40 and telling them they should have started at 18, and since they didn't, tough luck!).

Secondly, living on minimum wages is really difficult and saving 15% just isn't in the cards.



I am not going to lecture people with barely enough to live on that they should live the life of an ascetic for 50 years so they can save 15%. I think that is too tough.

Some responsible countries across the pond maintain an automatic efficient and high quality healthcare coverage to all citizens (vs. sick-care here) and mandatory pension saving to any employee with employer matching (usually 5-5% to 8-8%, tax free (not deferred) with additional incentives to promote savings. It enable most people to retire at 63-67 and maintain the same standard of living through their last day.

[wingssail]

Originally Posted by DeValency

Some responsible countries across the pond maintain an automatic efficient and high quality healthcare coverage to all citizens (vs. sick-care here) and mandatory pension saving to any employee with employer matching (usually 5-5% to 8-8%, tax free (not deferred) with additional incentives to promote savings. It enable most people to retire at 63-67 and maintain the same standard of living through their last day.

OMG Isn't that socialism! Horrors!

[beerster69]

Originally Posted by Dark Horse

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.

Thank you for the reply. If I need to bump it up a little on some years I'll do it. I already have more stuff than I need. I can't eat $5K a month in groceries.

[Yihang]

Originally Posted by DeValency

Some responsible countries across the pond maintain an automatic efficient and high quality healthcare coverage to all citizens (vs. sick-care here) and mandatory pension saving to any employee with employer matching (usually 5-5% to 8-8%, tax free (not deferred) with additional incentives to promote savings. It enable most people to retire at 63-67 and maintain the same standard of living through their last day.

Certainly all the 'CANZUK' countries. Private health insurance for visitors in Australia is about 1500AUD a year. You can live comfortably off universal pension in Australia assuming your house is paid for. Medicare covers 100% of all costs in public hospitals and the most expensive private insurance is about 5000AUD a year. My health insurance in the US was about 20k a year for a 30 year old and spouse, mostly paid for by employer. Didn't use it once in the 4 years I was there. I hope that money was put to good use. I heard from friends if you are purchasing your own it's something like 28k a year for a family.

[Joli]

ACA policies for us would be about $4,000/month. With the mandate being removed we are now able to buy a temporary plan that costs about$1,000/month, Florida Blue. Not sure of our plan after Biden wins and reinstates the mandate. Hopefully the borders reopen and we can remain offshore instead of sailing back to the US.

Interesting times.

[JC Reefer]

Originally Posted by Luv2Sail2020

.



$1 million can generate ~ $40k a year almost forever figuring the 4% withdrawal rate (market does normal). There is always the possibility of sequence of returns risk. Google that. Bad market early in retirement can threaten your nest egg.



So, for an example say you have $1 million in your nest egg. You and your wife worked enough years to earn Social Security. Average SS income is ~ $19K per year. If you both pulled in average then you have almost another $40K per year.

With just SS and nest egg earnings you are looking at an income of ~$80K.



Now you ask yourself can you live on that? If not, better save more..

It’s not, can you live on it today? The question is, can you live on that when you’re 70, 80, 90.

Looking back as a 90-year-old through the Lens of inflation, will 80k a year be enough? I don’t think it will be.

Not to mention, whatever the state of SS will be at that time.

[sailorboy1]

didn't realize I was poor till reading this thread

A lot of the thread shows unreasonable fear I believe. I bet that most people throwing around things in "$$ millions" likely will never cut ties and go cruising.

[Joli]

We've met all kinds of people out cruising. Some probably get by on $500/month, others can pay cash for multi million dollar boats. Some have mortgages on their boats others don't. Most everyone seems to be enjoying themselves, those that aren't having fun quit cruising.

[Dulls]

I can only relate this to a cruising lifestyle. I seems that if you buy a 35 to 40 ft boat you can live run and maintain it on about 1500 quid per month. This assumes no house bills or left behind bills. Am I wrong? I dont know but this is after looking at the U tubers who are out there on limited budgets. How to Sail oceans does a good budget break down but he is living on the edge and there is only one of him. Another couple came up with about 1000 quid per month. They did not eat out much if at all and all their entertainment was at the location they were in. ie within walking distance.

[DeValency]

Originally Posted by Joli

ACA policies for us would be about $4,000/month. With the mandate being removed we are now able to buy a temporary plan that costs about$1,000/month, Florida Blue. Not sure of our plan after Biden wins and reinstates the mandate. Hopefully the borders reopen and we can remain offshore instead of sailing back to the US.

Interesting times.

There is no such thing like “ACA policies” that “would” cost $4,000/month for a couple. But guess someone orange on steroids just pumped another stupid tweet...