$3000/mo cruising budget - Page 59 - SailNet Community
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post #581 of 628 Old 04-19-2016
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Re: $3000/mo cruising budget

QD are a good thing. Other good source for some is REITS. They fell on hard times so could be bought cheap. Allows more play against rental income from other sources with different aspect of tax codes (active/passive losses/gains). Requires no active involvement. Just get a check.
Finding going cruising for 1/2 the year very different than truly being gone. Being gone requires disinvestment from any holdings that requires active supervision. Being gone means supervision of rental properties, dirt dwellings, investments, fixed obligations and myriad other things (responsibilities to antecedents, descendants) in your absence. Difficult to transfer the supervision to another party. Usually involves expense or some loss of income ( same thing). Needs to be included in planning.
I thought Internet and phone would suffice. The past two years suggest this is not true even if just cruising the Carribean. Therefore believe it to not be true if going farther afield. Investments should be made or adjusted with this in mind.

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post #582 of 628 Old 04-19-2016
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Re: $3000/mo cruising budget

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Guitar, for those that have a couple bucks stashed away it is worth looking into qualified dividends, they pay well and are tax free for the first $100k or so. Granted not many people are fortunate enough to be in this position but if you have less and add that yield to your SS your tax burden can be substantially reduced. As an example, $500k in QD could yield $30k and a couples SS may be $3500 per month or $42000. Taxes on this combined total of $72000 is ~ $2,300.
Good points... We both have IRA's myself and my wife and we've been putting the max amount every year with 2016 being $13000 for married couples... but this isn't enough... we stash all my income into interest bearing accounts and rely on only my wife's salary to pay the everyday bills and living expenses... that is quite significant as my salary is 6 figures.

This along with substantial savings and trusts from both my parents (deceased) and my wife's grandmother's trust have accumulated a substantial amount we can take monthly over $2960 at a 5% withdrawal rate... This doesn't include any Social Security amounts for the both of us and my wife's teacher pension amounts she gets (even though she may lose some social security benefits)... We could take out anywhere from 6%-10% but why would we need to do this? I have our spreadsheet from Schawb open and can play with the numbers. Interesting how everything fits in with little on our part except insure the numbers are solid and not floating into others pockets.
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post #583 of 628 Old 04-19-2016
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Re: $3000/mo cruising budget

It was getting the new boat that has prompted us to sail more, having searched for many years, and as we have been getting older, I was beginning to think our "dream" had become "the search" for the boat, not what finding the boat would allow us to do. That was getting old. It seemed it would never end. But then the boat magically appeared practically in our backyard, 12 hours after seeing it, it was ours, and the dream has become real. We're spending money left and right: A new cradle, winter storage, wrapping, some new equipment, a new mainsail, cleaning and repair of the existing ones... But, hard as it is to believe, I'm enjoying making these purchases and paying for these services. Maybe it will get old, but it's not yet!
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post #584 of 628 Old 04-19-2016
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Re: $3000/mo cruising budget

These posts on this topic are very thoughtful! Thanks to all!
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post #585 of 628 Old 04-19-2016
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Re: $3000/mo cruising budget

Out, you have to be careful with riet's, although they are preferred stocks they do not have qualified dividends so don't enjoy the tax benefits of other QD's. I also agree that unless you have a large real estate holding that can be professionally manged it may be better to sell off the property.

Another area for potential savings that some may be able to exploit is deferred salaries if you work for a company that offers such a program. My wife is able to defer a portion of her income, tax free and it earns 7 to 9%. She then takes the defered income at a later date when our incomes will be lower (ie lower tax rates) and spreads it out to minimize liabilities.

Figuring out what incomes to take and from where when when retired isn't easy. Tax rules are obtuse and timing "when to take it" is crazy. Do you wait and take SS at 66 or take it early, the same with pensions. Is it better to switch accounts to lower yielding QD's to minimize tax liabilities, do you carry a mortgage on the boat or pay it off, do you burn down some savings to postpone taking a pension early? It looks like every year you can postpone taking pensions or SS early it will increase by at least 6%/yr (ie SS; $22,000 @62 or $32,000 at 66).

Try to find a good retirement planer and think this through, at our age there is no "do over".
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post #586 of 628 Old 04-19-2016
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Re: $3000/mo cruising budget

We just put 7 years of cost data out there -- it is what we spend and I mean every penny of what we spend - nothing is left out - hope it helps - search by my posting or 7 yrs of cost data

Just our thoughts and opinion
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post #587 of 628 Old 04-19-2016
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Re: $3000/mo cruising budget

Shock... most planners will tell you not to take early SS retirement if you have another means to support yourself for that very reason... maximize your earnings... I'm fully vested for SS at 66-3 months years of age... but I will file and suspend and wait till 70 to begin accepting SS payments. It is quite a difference in monthly gain by waiting those number of years of course the risk is dying before getting a penny from any of my lifetime of paying into the system. We have plenty saved to assure we can tap into our nest egg before SS ever hits our bank accounts monthly. By the way I'm 59 yrs. of age if this helps.

Good point on the REIT's... they're a good/bad investment depending on the real estate markets or investiture of those funds. We will continue to own our 2 homes for the sake of handing them over to our 2 children so this is something we cannot sell off. The biggest 'ifs' are what my wife will inherit in the next 2-5 years... that's the big elephant in the room as everything changes drastically in our financial portfolios.

Last edited by guitarguy56; 04-19-2016 at 03:58 PM.
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post #588 of 628 Old 04-19-2016 Thread Starter
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Re: $3000/mo cruising budget

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Shock... most planners will tell you not to take early SS retirement if you have another means to support yourself for that very reason... maximize your earnings...
I don't really accept this advise as a given and not all advisers say this anymore. It all depends on what you started out with etc.

I have 2 spreadsheets for cruising on my $3k/mo budget; one for SS at 62 and one for SS at 67. On those it is better for me to collect SS at 62 until I reach age 80, then it is better to have waited till 67 to have collected SS.

At age 70 I have $100k more in assets (cash) if I start collecting at 62 than if I wait till 67 to collect.

In fact I took the 2 SS amounts and used it for a math problem to find the age where I would have collected the same amount of money. That is the age that SS thinks you are going die. For me it was at age 78.3. So if I think I'm going to live a lot longer than that I should wait so I can drool longer as I wait to die.

The other thing to consider is that while I am waiting to collect SS I'm living off my assets and they are dropping. Since assets get carried over to my survivors and SS doesn't, it is better spend and live on the SS income than it it is to spend the assets.

BTW - I had a heart attack at 52 so I don't really have a lot of reasons to believe I'm going to be the long lived person. That is why I'm leaving this year at age 56 to go cruising and planning on collecting SS at SS. But when I get to 62 I will reevaluate the whole thing (but I've done the planning to know what I can about it currently).
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Last edited by Don0190; 04-19-2016 at 05:50 PM.
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post #589 of 628 Old 04-19-2016
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Re: $3000/mo cruising budget

We're 54 and 57 so close in age. Well be casting off the dock lines in 2018, keeping nothing but the boat, no land based assets.

Our incomes streams are varied, defered compensation, savings, sale of the business, coupon clipping, SS, pension... we don't anticipate any inheritance to speak of. Early years will be defered compensation, coupon clipping and savings; mid years will be pension, sale of the business, defered compensation; late years will be pension, ss, coupon clipping, we think....

We hope to be aboard for ten years minimum then into a retirement community where you go from condo to assisted living to nursing home. We don't anticipate ever owning real estate again and will leave the kids cash unless we burn through it all.

Staging how to "spend down" is a puzzle for sure. Good to hear ideas from others.
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post #590 of 628 Old 04-19-2016
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Re: $3000/mo cruising budget

Don good point... unfortunately I have to wait for my wife to retire on her teacher pension... she is 7 years younger than I so have the waiting game to play... I am referring to the fact I really don't need the Social Security to retire on and neither does my wife at the age we need to call it quits... for me it is 63-65 depending on how lucrative it is to continue working while I wait for my wife at 63 yrs of 'her' age to retire... I will be 70 yrs of age then and this will be my point of collecting the 'extra' funds of Social Security.

I'm super healthy and don't even look my age... but my wife has much more complications with her health so retirement depends mostly on how she takes to continue working till 63... We have been stashing money left and right for our retirement as we don't want to change our lifestyles. Only big expense is purchasing a new boat should we both be in quality health to use it wisely. Otherwise we continue merrily with our Hunter... we have no slip fees for her as it's slipped on our home in Wilmington Island (2nd home).
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