When can a couple retire and still travel?
Jun 29th, 2006, 02:29 AM
#1
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When can a couple retire and still travel?
Ah the silly old question. I thought I would ask it here
How much does a couple really need to retire and be able to take a trip a couple of times a year?
Do they really need a million dollars in the bank before they can retire?
Can they make do with a couple of thousand a mth coming in? Its never an enough!
So that begs me to ask how much does a couple really need to retire if they want to travel a couple of times a year?
Anyone?
tc
How much does a couple really need to retire and be able to take a trip a couple of times a year?
Do they really need a million dollars in the bank before they can retire?
Can they make do with a couple of thousand a mth coming in? Its never an enough!
So that begs me to ask how much does a couple really need to retire if they want to travel a couple of times a year?
Anyone?
tc
Jun 29th, 2006, 03:14 AM
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It takes a lot more than you would like. Health insurance is our biggest expense. My heat has quadrupled in the last five years. Property taxes are 50% higher than when we retired.
To keep just one of a couple traveling twice a year takes in excess of $4,000 per month with no debt and no other expensive hobbies. And, in order to do that, I travel off-season and stay in 2* hotels and hostels. Still, it is better than not going at all.
To keep just one of a couple traveling twice a year takes in excess of $4,000 per month with no debt and no other expensive hobbies. And, in order to do that, I travel off-season and stay in 2* hotels and hostels. Still, it is better than not going at all.
Jun 29th, 2006, 03:30 AM
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Hi
Using a finance calculator (heaps on the net) I calculate that $520,000 will last 35 years at $2000 pm. $500,000 will give you $2400pm over 25 years. $420,000 will last 25 years at $2000pm. This is based on:
a. You earn 3% above the rate of inflation. eg. inflation is 2% and your bank interest is 5%
b. You will be living off interest + capital. So it will be a SKI holiday (Spending the Kid's Inheritance). There's nothing left!
Of course it all depends what lifestyle you have and what debts you have in retirement. And whether you need to pay tax on income.
Using a finance calculator (heaps on the net) I calculate that $520,000 will last 35 years at $2000 pm. $500,000 will give you $2400pm over 25 years. $420,000 will last 25 years at $2000pm. This is based on:
a. You earn 3% above the rate of inflation. eg. inflation is 2% and your bank interest is 5%
b. You will be living off interest + capital. So it will be a SKI holiday (Spending the Kid's Inheritance). There's nothing left!
Of course it all depends what lifestyle you have and what debts you have in retirement. And whether you need to pay tax on income.
Jun 29th, 2006, 03:43 AM
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The rule of thumb is tat you will need about 80% of your preretirement income since so many expenses are fixed. Barbara in CT is close on expenses. Blue Cross Blue Shield costs about $12-14,000 per year for a couple in Massachusetts. Finding a cheap place to live and paying off all debt, including your mortgage is a good place to start. Taxes and utilities vary widely depending on where you live, though in my experience the combined cost of air conditioning and seasonal heating in the south cost at least as much as heating in the northeast. Do you want to travel enough to sell your house in a desirable suburb and move to a small town in Pennsylvania, Ohio, or North Dakota in order to put money in the bank and still have a base of operations? Car insurance varies widely depending on where you live. A close friend who lives in an inner suburb of a city chooses not to have a car in order to be able to travel. Are you willing to ride the bus to work, take a sandwich to lunch, skip the Starbucks, borrow DVD's at the library, and forego this season's crucial purse, in order to put money aside? Before I semi-retired, I wrote down every purchase I made for three years to the nearest nickel in order to understand how I spent money and how much I would need. Thankfully, we are in very comfortable circumstances, but getting there required a lot of discipline over the years, especially with regard to the use of credit. And on and on.
Jun 29th, 2006, 03:55 AM
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Just want to point out to you that travel can cost next to nothing if you want it to. I'm a budget traveler (increasingly less so), but on my recent trip to England felt like a spendthrift as I noticed all of the options for cheap travel. Are you willing to stay in hostels and campsites? Farmstays and agritourism is amazingly cheap in parts of Europe. Are you happy with hunks of cheese and bread bought at a market for a meal? My point is that, travel can be very cheap if you work at it.
And while I'm no financial advisor, don't forget reverse mortgages as a potential source of income when you get older.
And while I'm no financial advisor, don't forget reverse mortgages as a potential source of income when you get older.
Jun 29th, 2006, 04:38 AM
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We are close to retirement. We recently finished our lower level and built a deck. The Auditor's office came out and re-assessed our property. We are now assessed for the market value of our home which brought our taxes up substanially. We have never been taxed on market value before. Is this because we took out a building permit for the deck or are they now beginning to tax all property on market value? Thanks for the information.
Jun 29th, 2006, 05:12 AM
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"Just want to point out to you that travel can cost next to nothing if you want it to."
That sounds good, but the sad thing is that people of retirement age are not exactly the people who can stay in hostels and/or campsites due to various and sundry aches and pains! I am in good health, but my back won't put up with less than adequate mattresses. Also, after having three children (many years ago), I need to have a bathroom(W.C.) easily and quickly available to myself. Just an example! So I don't think it is exactly right to say travel can cost close to nothing! Not to mention flight costs which are seemingly going up, not down.
That sounds good, but the sad thing is that people of retirement age are not exactly the people who can stay in hostels and/or campsites due to various and sundry aches and pains! I am in good health, but my back won't put up with less than adequate mattresses. Also, after having three children (many years ago), I need to have a bathroom(W.C.) easily and quickly available to myself. Just an example! So I don't think it is exactly right to say travel can cost close to nothing! Not to mention flight costs which are seemingly going up, not down.
Jun 29th, 2006, 05:30 AM
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Who knows where will all be in 20 years?
That said, a few observations:
The more you travel, the more experienced you get a cutting costs by renting apartments, or choosing rural locations. The older you get, the fewer souveniers you buy on trips.
When you are retired, you can travel off season, saving money. When you are old, you can't pack away two European meals a day plus gelato and cakes -- or drink as much!
When you are at home, you eat, use up gas and other utlities and have entertainment costs that you don't have when you travel.
To my eye, air fares do seem to be getting cheaper, and it's probably worth using how to use priceline.
Finally, the more you travel, the more friends you make abroad. After a while, they begin feeding you and inviting you to stay with them. ;-)
That said, a few observations:
The more you travel, the more experienced you get a cutting costs by renting apartments, or choosing rural locations. The older you get, the fewer souveniers you buy on trips.
When you are retired, you can travel off season, saving money. When you are old, you can't pack away two European meals a day plus gelato and cakes -- or drink as much!
When you are at home, you eat, use up gas and other utlities and have entertainment costs that you don't have when you travel.
To my eye, air fares do seem to be getting cheaper, and it's probably worth using how to use priceline.
Finally, the more you travel, the more friends you make abroad. After a while, they begin feeding you and inviting you to stay with them. ;-)
Jun 29th, 2006, 05:47 AM
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A key element in my retirement decision will be when I feel free to no longer worry about medical expenses, and I am getting closer and closer to meeting this criterion.
Once you reach a certain age, and comfort level with what your life has been... nobody MAKES you spend anything on medical care. There is the alternative option - - which I hope to remain always prudent enough to choose, once I am truly retired - - to just say no... to any and all medical treatment.
I cross my fingers to be wise enough to follow in the footsteps of Jackie Kennedy Onassis, if and when I reach a similar age and crossroads in life. I'll pay for an accurate diagnosis, and then... say "thank you very much, doctor... I'll be going home now."
Best wishes,
Rex
Once you reach a certain age, and comfort level with what your life has been... nobody MAKES you spend anything on medical care. There is the alternative option - - which I hope to remain always prudent enough to choose, once I am truly retired - - to just say no... to any and all medical treatment.
I cross my fingers to be wise enough to follow in the footsteps of Jackie Kennedy Onassis, if and when I reach a similar age and crossroads in life. I'll pay for an accurate diagnosis, and then... say "thank you very much, doctor... I'll be going home now."
Best wishes,
Rex
Jun 29th, 2006, 06:02 AM
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I could have retired already but because my passion is travel I continue to work in order to be able to travel. I am in good health and often have to have a word or two with myself about motivation and getting up early each morning etc. Travelling in Europe which is where we always land up is costly but my advice to anyone is if you can, travel sooner that later. Travelling is tiring, you need to carry heavy suitcases, get jostled at airports and do a lot of walking.
Jun 29th, 2006, 06:03 AM
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Not me. Medical technology is such now, and getting more advanced all the time, that I want them to do everything possible to keep me alive, until it is clear by all medical consensus that to do more is futile. I believe in life-and prolonging it to the greatest possible degree-as the alternative is something I don't know, and don't want to know unless I absolutely have to.
Jun 29th, 2006, 06:06 AM
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I question the 80 per cent of pre-retirement income figure. I think it will be closer to 100 per cent: employment expenses will just be replaced by something else (more spent on heating, for example, since one is less tolerant of temperature extremes); more spent on outside help for household projects once arthritis, etc. rules out painting and gardening chores, etc.
******
Interesting view, Rex.
I take it that on the assumption you won't be having yourself treated for the really serious stuff you feel it will be cheaper to self-finance for minor problems (simple fractures and sprains, minor infections, etc. etc.) and I suppose even the middle-of-the-road problems could not only wait until one gets home, one could probably get on one's own steam (albeit awkwardly) to one's scheduled departure gateway?
******
Interesting view, Rex.
I take it that on the assumption you won't be having yourself treated for the really serious stuff you feel it will be cheaper to self-finance for minor problems (simple fractures and sprains, minor infections, etc. etc.) and I suppose even the middle-of-the-road problems could not only wait until one gets home, one could probably get on one's own steam (albeit awkwardly) to one's scheduled departure gateway?
Jun 29th, 2006, 06:09 AM
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My recollection is that Jackie O died at 62 -- before the usual retirement age!
I think packing light and taking the money you used to put toward souvenir-buying toward taxi fares is the sigh of aging wisely.
Also, I've twice gotten so sick abroad I had to be hospitalized, and I got terrific medical care in both Italy and Japan. (Japan especially has top-of-the-line care.) I don't recommend getting sick to others, but I will point out that one shouldn't stay at home for fear of 'something happening' medically (just buy travel insurance) and that airport personnel are more than happy to provide transportation at airports if you request it. (And I may jolly well do so when if I need help when I get older rather than stop traveling.)
I think packing light and taking the money you used to put toward souvenir-buying toward taxi fares is the sigh of aging wisely.
Also, I've twice gotten so sick abroad I had to be hospitalized, and I got terrific medical care in both Italy and Japan. (Japan especially has top-of-the-line care.) I don't recommend getting sick to others, but I will point out that one shouldn't stay at home for fear of 'something happening' medically (just buy travel insurance) and that airport personnel are more than happy to provide transportation at airports if you request it. (And I may jolly well do so when if I need help when I get older rather than stop traveling.)
Jun 29th, 2006, 06:12 AM
#17
Depends where you go on those two trips. I think you can travel cheap and still have a private hotel room with bath and decent bed to sleep in. It depends on the destination you pick. Mexico can still be a bargain even in tourist destinations, for example.
Jun 29th, 2006, 06:15 AM
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Hi tc,
>...be able to take a trip a couple of times a year?
Where are you going, overseas? For how long? Do you like 4* hotels, starred restaurants and 1cl on the airplane?
Keep in mind that after age 62 or so, you get Social Security.
As for medical, at age 65 you have to sign up for Medicare. It doesn't cover you outside the US.
>...be able to take a trip a couple of times a year?
Where are you going, overseas? For how long? Do you like 4* hotels, starred restaurants and 1cl on the airplane?
Keep in mind that after age 62 or so, you get Social Security.
As for medical, at age 65 you have to sign up for Medicare. It doesn't cover you outside the US.
Jun 29th, 2006, 06:18 AM
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I wasn't talking about concerns over the expense of medical treatment while traveling.
I'm talking about just saying no to all medical treatment - - once I decide that I no longer require gainful employment.
While it has been my privilege to extend life at its beginning (in some cases, at great cost to society), I don't see much use for wasting my children's inheritance, nor my taxpaying neighbors' assets... on extending it, at the other end.
I'm talking about just saying no to all medical treatment - - once I decide that I no longer require gainful employment.
While it has been my privilege to extend life at its beginning (in some cases, at great cost to society), I don't see much use for wasting my children's inheritance, nor my taxpaying neighbors' assets... on extending it, at the other end.
Jun 29th, 2006, 06:24 AM
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Pardon me but I am now unsure about where Jackie O fits into all of this.. Rex, I thought you were referring to deciding to decline treatment for any serious ill that would befall you at home, not to WAIT until you got home from a trip to have tratment! The way I understood it, you would not be needing to pay for medical insurance since you would not be having any treatment but would pack in the towel instead.
