What would you do?

[max_hyde]

Hi, just interested in peoples views on a financial matter that I have already decided on but will not disclose till later in the thread!
a little about myself... I'm 42, public service employee, who will in three years be buying a boat most probably (Rival 32) for cash and will have no outstanding debt. Intend to become a livaboard/ circumnavigator, hopefully with my girlfriend, (if she lightens up about wanting a bigger boat!) The following options are open to me! which one would you pick? (have converted all cash to dollars at exchange rate of $2 to £1 for ease of calculation)

1, take a possible redundancy package in 2011 the package will be around $100,000 cash plus $2000 per month (index linked)

2, take early retirement in 2016, again around £100,000 and $2000 per month (not index linked until 2021)

3, take full retirement in 2018, $210,000 and around $2300 per month (not index linked until 2021)


just thought it would make an interesting thread? Will post my decision later!


Cheers Max

[Lynx]

Take a leave of absence for 6 to 12 months and then do the rest of the years for retirement.

[max_hyde]

Would love to but would just add another year onto retirement date (must work 30 years to get pension)

[Shawn T W.]

I'd take "Option #1" I could live on the $2k a month VERY Easy! Even cut that in half, and save the rest for "repairs"

Why work when you can sail?!?

Shawn

[CharlieJ]

Max- let me ask YOU a question ( I'm 67 by the way)

How long are you gonna live?

I'd suggest-

Go with the earliest possible date, get a smaller boat if needed and GO.

[Lynx]

the % has stayed the same for years -
80% of people do not cruise for more than 1 year.

You can always quit after.

Anyway, an option.

[Lost Lake]

Wow, I'm smarter than I thought!!

I was thinking I'm not getting younger, I see too many middle lifer's cut-down physically or financially, so I was thinking I would retire when my youngest turns 18, that would be when I am 54.

I will have no pension, not nearly enough to retire on, but I figured I could always get a job if I didn't like cruising. At least I'd try it!!

I'd set aside $50,000 for two years of cruising, and have a nice boat to cruise in....

[CharlieJ]

50K for two years? And the boat? Hey- We live on about 20K a year now and maintain a house, two boats, 2 cars and a full shore based lifestyle!!

Back in 82, 83 I lived aboard, cruised full time for a couple of years and spent ( the first year) 7,500. That was with a teenager aboard and two full time smokers.

Laura and I could cruise a LONG time on 50K. It's a LOT cheaper once you get out there and shed the marina/restaurant/ shopping syndromes- a LOT.

[Lost Lake]

I just can't imagine two adults living for less than $25,000 a year! We spend more than that in 3 months now....  Unbelievable... I just picture us eating beans and rice, never eating out again...  I believe you, it's just a whole different life. I can't wait!!

[Frank]

I think cruising is the same as at home...some spend LOTS...some live well on little. I only paid one night mooring fee this year on 3 visits to Hopetown, choosing to anchor out and dingy in, figuring the $15 would be better spent on a nice lunch overlooking the harbour.Just like home..there's a ton of choices.Anchor out often,cook on board often,sail often and a small budjet will still get ya a few drinks at a fun pub and a couple meals out a week.

[Shawn T W.]

We currently live on shore for $1000 - $1100 per month, maintaining our home, car & truck, food is $70 - $90 a week, we eat out about once a month for less than $20 for the two of us! So . . . If I didn't have a home, and had  a small boat instead, I'm sure we could easily live for $1000 month.

A lot of it is a personal decision on what is important to to US, I myself think working is over rated!

We have a nice townhouse in a retirement village, we overlook the 1st fairway on a championship golfcourse, (which is less than 100 yards away!) But it is cheap to live in AZ . . .  Taxes are less than a $1000 a year, My home in VT was not as nice, nor in as good of location, and my taxes were well over $3000! Of course it would be along walk from the dock to my house! Ha! (The ocean is 500 mi away!) I spend less than $800 per year on electric to heat & cool my house, hot water & cook now! In VT it would be . . . over $3600! (Property was cheaper here too!)

Shawn

[Lost Lake]

I still have a mortgage, but even when that is paid off, these Wisconsin taxes are killing me. I'm sure there are some states that are higher, but only ten years ago we paid $1200 in taxes for a 3 bedroom home. Now it is over $8,000. At this rate, in another ten years we'll be paying $20,000 a year in taxes!

And I live in the country, far from police and fire services, no water or sewer, no garbage service....  Three kids and all these payments makes it hard to save up for cruising, but I think if I sell the house I'll be able to buy a sweet boat and have all the money I need to cruise. The rest will have to go in the bank in case I retire from cruising and I need to buy another home (in Arizona it sounds like!)

[CharlieJ]

Well- there's one difference- and one advantage to being an old fart. ;D

We built our house ourselves, board by board as we could afford to buy materials. Lived in a 24 foot travel trailer while doing it. Started rushing towards the end because Laura's son kept getting bigger and bigger  :o( he was 10 when we bought the trailer)

It's paid for and we homestead it, so we get the homestead exemption. Plus as someone over 65 my property taxes are frozen to 2005 levels- the dollar amount can't change. So our property taxes run just over $100 per year.

We aren't ON the bay- that property was way out of our reach- But from my front deck and balcony you can sit and watch the bay- watch the channel markers flash at night and watch the ships come and go. 1/4 mile across the marsh to the beach. 5 blocks to drive or bike.

Our vehicles are older and both paid for. I don't buy new cars- haven't in 30 years The truck is an 89 and the car is a 93. I maintain them and should mechanic work be required, I twirl wrenches. Two years ago spent a week doing a valve job on the truck. Cost me parts and the charges to machine the heads. When the clear coat on the hood and roof began peeling, we sanded it primed it, and when we found the time, painted it- base coat/clear coat. I realize not every one can do that- I have a shop and the equipment from my work and the skills to do it from spraying furniture.

Most of you have seen the pics of what Tehani looked like when we got her- we spent a LOT of hours, but not a whole lot of bucks restoring her. The other boat I built myself.

We very seldom eat out. We really don't enjoy it. We'd rather do a special meal here at home. I do most of the cooking and I love cooking chinese- I have 4 woks of various sizes and types.

ALL of our furnishing other than the refrigerator, stove and washer were bought second hand. We use a dining table that belonged to Laura's grandmother. We DO have a shop and are experienced furniture repair and refinishing people. SO all the rest has been picked up as we found it and refinished to suit us. I realize not every one can do that, but every one can do SOMETHING.

We enjoy shopping garage sales and resale shops and have gotten some really great deals doing that. Our bathroom fixtures were all bought that way- Tub, sink and toilet cost us 27 bucks total and the sink had the faucets in it.

I bought a 15 pound folding Northhill anchor for 15 bucks at a garage sale- he was asking 50 and I bargained him down.

Another example- I was fishing with a friend a few years ago and he was extolling his $150 dollar rod and 200 dollar reel. I was standing right beside him and out casting him- with a very nice rod I found at a garage sale with a broken tip for 15 bucks and a Shimano MiniMag reel I got at another sale for $10. ;D $350 vs 25 bucks and we were both catching the same number of fish. Oops- forgot- the new tip cost $5.

I do realize SOMEONE has to buy the new stuff or the bargains wouldn't be there, but some of these guys spend thousands, buying the latest and greatest, and the one year old stuff gets sold for peanuts.

We have credit cards but ONLY use them when absolutely required, such as a car rental, or something like that- otherwise we pay cash. No cash? No purchase.

I think it's really a mind set. Not saying those on this board are profligate spenders, but we see MANY who simply cannot stand to not have the latest and greatest. One of the ladies who works with Laura- a younger one, makes a fairly low salary- and drives a brand new car- because "she'd be SO embarrassed to drive a used one" THAT's the attitude that makes living real expensive.

[newt]

Homesteaded in Texas-
Charlie you are my hero! Do you have a big enough dock to take renters?  ;D

[CharlieJ]

lol- don't have a dock. Waterfront lots when we bought here were running 85,000. Our lot across the marsh from the bay, but within view cost 8,500. Those 5 blocks and that one zero made a huge difference.  ;D

Of course, we bought 16 years ago - prices have gone up a good bit since then but still aren't unreasonable for off waterfront lots.

[max_hyde]

In answer to my own question obviously scenario 1, is the choice! BUT it appears this is still in the discussion stage, if this doesn't come off I will do my full 30 and retire in 2018, I know its an extra 2 years on the early retirement option but I will still only be 52! but the extra $130,000 will come in handy if  the cruising lifestyle didn't pan out or a future girlfriend wanted a bigger boat (never happen!)

cheers for all your replies Max

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It seemed like a good idea at the time....

[Shawn T W.]

Yeah in AZ (Well at least in Cochise county) they freeze the property tax once you hit 65 years old also (I got 23 more years) But I have no mortgage, and no vehicle payments (99 GMC & 02 Volvo), my home was built in 79, and I paid $99,500 this past April for it! I work on the P/U myself, so far I have managed to stay away from the Volvo garage for the last 2 years we owned it!

My goal is to learn to sail, and gradually as I get more experience, buy a bigger boat to live on & sail & practice, hopefully I can find a bargin in the next few years, drag it to AZ, and spend the time to bring it back up to speed (I have more time than money, but then I'm only working about 15 hrs a week too!) All the while looking for deals to refit it.

Shawn

[s/v Faith]

Max,

  Gorg to you for the discussion. 

FWIW,

  Much of my beliefs / opinions on this are already in the OT: Financial rant thread.

  I am obviously in agreement with option 1, and hope it works out for you.

There is a big difference between what we need, and

  Rose and I have made choices, set goals, and have been blessed to see them work out.  We are debt free, own our home, and live on my pension (about what CJ mentioned).  I am not yet 40. 

  I have never owned a new car, and choose to buy less house and more land.  A few years ago when my peers were signing interest only mortgages for half a million dollars we were paying ours off.

  We lived pretty cheaply on our trip, as we do now.  I can honestly say that we don't want for anything though.

  I may go back to work again, if I find something I want to do.... but my identity is not defined by my job title.  I feel productive in what I choose to do, and am thankful for that.

  This temporal experience we know as life is finite.  I do believe that it matters what we do with it.  I just don't believe that the measure of our life will be reflected in our income or our net worth when we are done.

[max_hyde]

Life as always is full of suprises, it appears the first option will not be forthcoming in my area unless forced upon my employer by central government, as a result i've been doing some creative thinking, (thanx in part to a suggestion by LYNX, grog to you!!) i can take up to a three year career break in my job, if i work another four years till i have accrued 25 years service, i could take a three year career break living on approx, $15-18000 per annum savings for the three years, i could then return to work for a couple of months until i was of pensionable age (50 years old) when i could retire on a partial pension, not to far off the above amount plus a small lump sum.....

pros... get to go cruising three years early, not burning any bridges if it didn't work out, can go a long way in three years :)

cons... would mean tight finances for the three years and having to return early if there were any big problems with the boat, such as engine, mast etc. means a lifetime afterwards of not being as comfortable as i could have been!

[AdriftAtSea]

Max-

I'd say go for the three years cruising... there was a post on another forum about a sailor and his girlfriend who had just finished prepping the boat for long-term cruising and were doing the final bits to leave... he fell in the water leaving the boat and was rushed to the hospital.  Turns out he had a massive heart attack and is not expected to make it.  Don't wait until it is too late...