retirement

[Joli]

Originally Posted by outbound_308

Not to be negative or judgmental actually just want to know, so if your net worth is 5,000,000 and your only using .05 for your liveaboard sailboat which comes to 250,000. My question becomes what are you going to do with the rest of it? thats a lot of margaritas.

Tough to answer something like that without knowing the income stream origination. Is it taxed as ordinary income or qualified dividends or something else? Are withdrawals from a Roth IRA or an ordinary IRA? Your tax on $250k could be as much as $70k.

Will you carry health insurance? $12k a year for a cheap policy.

Yacht insurance? Depending on the boat and your experience could be $10~15k a year.

Mortgage? $25~50k a year depending on the boat.

Maintenance? 2% of new replacement would be $20k a year but could be more depending on the condition of the boat. We know several boats this season who replaced propulsion engines, their maintenance budget went out the window.

Food, entertainment, margaritas, clothing..... $10k a year?

Marinas, fuel, communications, travel home... $20k

You certainly have plenty of room in your budget but sometimes things don't go to plan so best to keep reserves.

[outbound_308]

ok, so once again we are going down the path of what you think I should do. the original question is what would you do and why.

[Joli]

Originally Posted by outbound_308

ok, so once again we are going down the path of what you think I should do. the original question is what would you do and why.

I responded to your original question earlier, 50' or less, set up to single hand.

The second answer concerned your second question. After paying bills from $20k a month there may only be $5 left. Set it aside because you may need it for unplanned expenses.

" if your net worth is 5,000,000 and your only using .05 for your liveaboard sailboat which comes to 250,000. My question becomes what are you going to do with the rest of it?"

[Jdege]

When I told people I was going to retire to a sailboat, they immediately asked if I was going to sail around the world.

My answer? The whole idea of moving onto a boat is to free myself of obligations.

Wherever I am, I'll go next to wherever seems most interesting. Where that ends up, I don't know or care.

I no longer have plans, I have vague intentions.

[MicHughV]

The size of your wallet or checkbook has little to do with your enjoyment of the sailing life.

You can have just as much on $500/month as $5,000/month, depending on your "attitude"

[DoubleD]

I apologize if this was mentioned already in prior posts, but just because you can afford a large expensive sailboat, doesn't mean you should buy one. Think about what you want out of this adventure and also you're personality. Do you buy brand new cars and then get stressed about keeping it clean, avoiding door dings, scratches etc.? Why would you feel any different about a new fancy boat, worrying about scratching that gleaming Awlgirip paint job, or water marks from the morning dew (memories from my childhood). Do you like to do your own house or car maintenance or do you have a someone do all that work for you? The more creature comforts and equipment on a boat, let alone the bigger the boat, the more maintenance, which depending on where you are, there may not be services available, or you'll have to hang around in port waiting for services or parts, instead of being out exploring. I've not done extended cruising yet, but I know myself well enough based on dirt dwelling to know how my own tendencies.


"If you don't know the meaning of introspection, you need to take a hard look at yourself"


good luck with you adventure


DS

[Kintala]

Originally Posted by outbound_308

Not really asking for you to tell me what you think I should do. More, what would you do. lots of good knowledgeable people on here. I think it would be interesting to see the differences of what people would choose for themselves and why. No wrong answers everyone's likes and tastes and uses would be different.

We retired at 56 with no previous sailing experience except for all the ASA classes and cruised full time on a sailboat for 6 years. We had no income, only savings, so we had to stop and work at a boat yard for two hurricane seasons in a row. After six years we were very low on money and didn't want to start using our retirement investments quite that early and were not keen on another summer work season in Florida heat. So when the perfect job came up in the perfect location, my husband went back to work so we could build up the cruising kitty. At our age, we realized that we were going to have to transition to a trawler, so we sold the sailboat. Now, three years later, we have bought the trawler and are getting ready to head back out.

If you want to enjoy the cruising life, it can be done on just about any income bracket. But, with your income, you can definitely enjoy life on the easy side while cruising. My advice to you is to find a boat that you will still be able to sail in 6-10 years, keeping in mind that in the next ten years your physical capability will not likely be what it is today. The sailboat we had was a racer/cruiser and it required much more physical prowess than we were going to have in the next few years. It was time for a change.

You said you wanted to know what we would do if we were in your situation with your income? I would buy a piece of property in the Bahamas and spend the rest of my life going back and forth for cruising season and H season. I could spend an entire lifetime there and be perfectly happy. I've had no desire to go to the Caribbean because we have 11 grandchildren (4 of which live on a boat in FL) and I don't want to be that far from them.

We have ten years of detailed blog posts about our cruising if you have any interest. All I can say is count your blessings and go enjoy life!

The Retirement Project

[ohdrinkboy]

Originally Posted by outbound_308

Not to be negative or judgmental actually just want to know, so if your net worth is 5,000,000 and your only using .05 for your liveaboard sailboat which comes to 250,000. My question becomes what are you going to do with the rest of it? thats a lot of margaritas.

The 5% of net worth was my post. The balance gives me (and my wife) income through our final days (could be 30 years). That me be on the water or on land. Anything left over will go to our daughter.

[drdoyle]

Motorsailer for the room and an enclosed pilothouse. Maybe an older "Fischer". 37 to 42 feet.

[JordanH]

Hey,
I get your game and I'll be your Huckleberry. My understanding is that you've got a nestegg of $5M, you're using a "FIRE" type rule of extracting 5% per year while maintaining the principle to continue growth/income to continue to sustain your lifestyle. For me, I'd use 4% or 4.5% but your setup is 5%, so we'll go with that.



So... The assumption is that I would withdraw $250k at the start of the year. Immediately, my taxation would be somewhere between $62 - $100k, depending on how the income was earned. I'm going to estimate after tax income of $170,000/year. $14,166/mo. I would allocate my budget...
1. 10% ($1,400) into a rainy day fund
2. 30% ($4,166) into my Travel, living, meals and entertainment. Basically all living expenses.


Now as for the boat... my dream boat is a Garcia 45. Since I'm keeping my capital invested, I would be forced to take a loan to afford it.
Let's say $1M @ 6% over 20 years, that's $7,161 monthly.
3. 50% ($7,161) into boat purchase.


4. That leaves 10% contingency to handle fluctuations in my situation or charity?


I can't remember what you said your age was, but I think you said it was mid-50's so I'll assume "I" am 55. I would plan to spend the next 6 years circumnavigating the globe. I would spend the next 6-12 years going back to the places I like. And at that point, I would be nearing 75 and chances are looking to get off the water and into an easier life on land in one of the places that I found that I loved. Or perhaps switching to flying & cruise-ships with some good ol' fashioned plaid pants and shuffleboard.


While I was on the younger side of that, my voyage would start on the east coast of N.America, cross the Atlantic to the Azores then to the Hebrides, the UK and then Lofoten, before turning around, working my way back south, hitting Portugal, (skipping the med), the Canary Islands, Verdes, to the Caribbean... although, that would be a short stay before getting to central america and passing through the Canal. I would touch through South Pacific... and knowing me, chances are I would take longer doing that than planned. Then over to the Philippines and then thailand... again, I'd probably get stuck here for a few years as there are lots of places I'd love to visit and beaches to explore. My first time through, I'd miss Australia but want get there on round #2.
After Thailand and Malaysia, I'd head for Chagos... and this is where I'd have to make a decision. I think I would go south to Madagascar then South Africa on Round #1 and then India followed by the Med on Round #2. After rounding Cape of Good Hope, I'd make sure that I visited St. Helena since it's on my bucket list. Then head back towards the Caribbean to sort out how I'm feeling after 6-8 years. If I decided to go for Round 2, I would probably go through the canal again then on to New Zealand and Australia, up through the med. And at that point, I'm likely late 60's or early 70's? I could carry on, or I would settle into Tuscany to live and eat well on land. That leaves me a few years before I kick the bucket at 76 years old. I'd then leave the remainder of my fortune to the guy that gave me this incredible list of things to do.



So... I think that answers your question about what I would hypothetically do in your situation. Now if only I could convince my wife...



J.

[mikecambrai]

Originally Posted by NavyDave_andMe

You are blessed!
I'm impressed that at age 56 you feel young. I'm 60 and half the time I feel decrepit. Might be the 12-year-olds I'm struggling to teach some grammar to each school day. Retirement. Ah...

--Cheryl

Retire now and get sailing even if it is only around the LOOP. Getting rid of the stress of working and starting a new life will alter your whole world for the better. I did it at 55 with very little savings and cruised the inland waterways of Europe making many new friends and having many geriatric adventures.
It is easy to top up your income with the occasional work, but as long as you have no mortgage then your expenses will lower significantly.

[Soundhaven]

Well, since you've made it clear that you want to know what WE would do, here you go.
My husband retired when he was 60 and I retired the next year at 57. We've both been retired for about 4 years.
We live comfortably on a 1990 32' Island Packet, which we lived on before I retired.
We also own a 20' Pacific Seacraft Flicka, which we just lived on for 5 months in the Sea of Cortez. Yes, two people living on a 20' boat.
On the IP, we are off the dock most of the summer in Puget Sound.
On the Pacific Seacraft, we lived in a marina on the Sea of and did, primarily, day sailing and overnight anchorages.
If we had 250k annual income, what would we do differently?
Probably get a slightly larger, say 35-38' IP or Pacific Seacraft. And, maybe a third boat for the canals in Europe.
One big difference in big boats and small boats is the people you get to know in the marinas and anchorages. You will, most likely, be on a dock with boats of similar length. Some boats have crew who do all their work; the owners just arrive to leave the dock.
In an anchorage, other sailors will row over in their dinghies to say hello and chat. Most people don't approach a 50' boat with crew the way they approach a 32' boat.
Who do you want to hang out with, buddy boat with, work on boats with? We enjoy spending time with our boating community and helping each other with projects. We like being able to get into small anchorages, or even onto a dock where people will shuffle space to fit us in.
Lots to think about, in terms of community, in addition to the technical aspects of the boat.
Enjoy your retirement! See you on the water! If you get a big boat, let us all know so we can come over for a cold drink with ICE in it.

[Benjamin Fry]

I bought a 2011 Moody 45DS and have had similar thoughts. The circumstances were a bit backwards in that the boat opportunity came somewhat out of the blue and then I had to decide what to do with it.

I brought it to the UK from EU and have been both training myself on it and having work done to it. I'm very risk adverse and ask myself constantly what I would do if things go wrong, and particularly if I am alone, or the only person on the boat who knows what they are doing!

It turns out that I think that it is the little things that matter an awful lot. They are the difference between something being safe and being scary, being fun and being exhausting and being pleasant versus survival. Obviously everyone differs.

The deck saloon is ideal for a floating house too. You can sit on it in the marina and have a seaside apartment with a lovely view. Or you can sail or drive it from inside in foul weather. That's a huge plus thinking about long-term use for me, being able to have a motorboat life in a sailboat. 7 days in port is no problem. 25 knots wind no problem. Seems like a nice compromise.

In addition, for me, the following have become important:

- solar power, fridges, water maker and water purifier. No need to hook up to shore power or go to shore at all for as long as possible. Keep food fresh. No bottles of water. Easy shopping less often.

- power winches, furlers and windlass. Just makes everything easier so long as they work. Protects your back etc. and makes you more likely to change sail set ups.

- dishwasher. don't laugh. less water used and completely different level of clean. I want a shore life on the move.

- safety back up on everything. DCS VHF, PLB, MOB1, EPIRB and satellite internet all x2 and some of them on my person at all times. Faraday cage for spares

- good AIS, radar, and autopilot set up. Easy course setting and alarms so that you can relax.

- electric outboard and folding rib. for easy deployment and storage in lazarette. looking to minimise all heavy loads to not risk injury in my 50s.

- chain counter and control from helm. I want to be able to do everything from the helm on my own

- bow thruster. also I'm considering a stern thruster. again a luxury for no reason really other than to make the whole thing always relaxing and not a drama. I know my limits and therefore am happy to have help.

- good heating. I hate being cold. I don't mind the heat. So I can extend my season or range with heating.

- finally a good life raft set up and a way to get back on the boat if I fall over alone (even at anchor), often neglected!

I plan to do a long season in Greece and to see how much of the boat falls apart there. Athens and Turkey are ok places to get stuff fixed. Then another season to see if fewer things break and if I've learned how to fix anything on my own. Then see if I'm tempted to go west for the winter.

I don't mind if it takes me 5 years to get the things and knowledge I need before I feel confident to leave the med. I generally feel amazingly happy on the sea, but this is ruined if genuinely dangerous things happen, or nearly happen and keep me up at night. So I want to learn to handle myself and my boat gradually, and yet not wait. The med is a good resource for that with a mix of terrain, harbours, marina and weather, but never too far from safety.

Good luck with your plans and I hope it works out well for you.

[qwerme]

I would get a fast trimaran that can be shipped in a container.

Forget long passages, travel all over the world and have my boat shipped to where I want to cruise for a bit, when I want a break, pack it up.

[Lake-Effect]

Originally Posted by outbound_308

ok, so once again we are going down the path of what you think I should do. the original question is what would you do and why.

Me personally? If I could count on $250k a year in retirement, I would have a northern base - a cottage on a big Ontario lake, keep a small cruiser there, a southern base (Caribbean or Mexico - either a liveaboard-sized boat, or a condo plus a smaller cruiser), visit other places and charter - eg charter a canal boat in France, Med charter, S. Pacific charter, etc.

In other words, I would not put all my eggs in one basket, til I found a basket that I loved above all others.

(On a smaller budget, I... I mean we ... are aiming for a smaller version of that. Currently it takes the form of a paid-off house close to our yacht club, an inexpensive boat (still looking for larger), and some modest travel and hopefully some more charters.)

A bachelor I know bounces between liveaboard in Ontario, and rentals and charter in Thailand or Vietnam.