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Retiring debt free!
Old 05-02-2014, 01:44 PM   #1
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Retiring debt free!

Hey, ya'll. Our home will be paid off on July 1, 2016 and I plan to retire when I turn 63 the following January. I plan on purchasing a camper van, like a Roadtrek N6, but don't want to go into debt to get it. So unless I win the lottery, I will just do without. I am glad I found this site. I am on the internet constantly looking for information about retiring.
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Old 05-02-2014, 03:22 PM   #2
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It is interesting how we each have different views/tolerance of debt. My last day on payroll was 19 days after we refinanced and after I had stopped working but was on vacation.

I pay 3.375% and have earned 12.34% on average so far so for now, I'm happy with my decision.
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Old 05-02-2014, 03:42 PM   #3
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I understand. We have worked hard to get out of debt and do not wish to take on more when I retire. When the house is paid off, we will be entirely debt free. I will have more money to do what I want to do. What's so funny is the Roadtrek campers start at 60-70,000! That's more that what I paid for my house 27 years ago. I can't see taking out what amounts to be another mortgage for a vehicle. lol
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Old 05-02-2014, 03:52 PM   #4
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Ouch. That's a lot for a small RV. How well do they hold their value?

Our neighbors down the road have a similar van-like RV and they love it. DW is curious about them too but I had no idea they could be that much $$$$.
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Old 05-02-2014, 04:07 PM   #5
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Roadtreks for Sale - Road Trek International
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Old 05-04-2014, 12:45 PM   #6
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They do hold their value pretty well. They are just the right size for my husband and I and our two rat terriers.
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Old 05-04-2014, 01:03 PM   #7
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I'm retiring in 7 1/2 weeks, and we just took out a mortgage for $204,000 at 4.25% six months ago......yikes!
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Old 05-04-2014, 02:09 PM   #8
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Originally Posted by dnorton50 View Post
Hey, ya'll. Our home will be paid off on July 1, 2016 and I plan to retire when I turn 63 the following January. I plan on purchasing a camper van, like a Roadtrek N6, but don't want to go into debt to get it. So unless I win the lottery, I will just do without. I am glad I found this site. I am on the internet constantly looking for information about retiring.
You will find many different, intelligent responses regarding how much, if any, debt you should or should not retire with.....IMHO, I started getting rid of my debt about 25 years ago. Back then, all my "financial" people (banker, accountant, etc.) told me not to pay off the mortgage because I would lose my interest deduction.

Without going deep into the discussion of this, I soon realized that was the worst mistake I ever made. Once I paid off my house I never purchased another one without paying cash for it, and I have ended up buying 4 or 5 since then.

Aloha!

If you are debt free (again, my opinion) it will be the best retirement present you can give yourself.....
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Old 05-04-2014, 02:37 PM   #9
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They do hold their value pretty well.
Yep, that's the problem. They start out high, and they don't get cheap enough fast enough.
I think DW and I might enjoy something like these Class B RV's, but I can't see dropping $40K for something we take out for a few trips per year. And they aren't inexpensive to rent, either.
As far as debt-free retirement: We've got a low-interest mortgage I'm paying it off as slowly as possible, we'll still have it when I really retire, which is just fine. And I'd much rather have that than a loan payment for a car or RV.
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Old 05-04-2014, 04:53 PM   #10
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Why be a slave to the lender? A RV isn't that important to us. If we are able to save up for it, fine. If not, it isn't the end of the world. Being this close to debt free-I am not about to go into debt again. That is $1300. per month I WON'T be paying. I get a bit crazy about this. I am a big Dave Ramsey fan. What he teaches is so right on.
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Old 05-04-2014, 04:56 PM   #11
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As far as using an RV only a few times a year? I would be replacing my current vehicle as the Roadtrek gets really good gas mileage. I just can't see paying 20-30 years on something like that. I have the money in my emergency fund, but this definitely is NOT an emergency
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Old 05-04-2014, 05:06 PM   #12
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I'm 50 and not yet retired. Just paid off the mortgage and am totally debt free.

My argument to those who bring up the tax deduction argument is this: I can give the same amount of previous mortgage interest to my favorite charity and get the same deduction WITHOUT the risk associated with debt.

Yes, you can make a higher percentage on the money if invested (maybe), but you are taking more risk. All investment decisions are a balance of risk and reward, and this is no exception. Each person will have a different approach based on their own particular risk profile and goals.
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Old 05-04-2014, 05:16 PM   #13
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I'm 50 and not yet retired. Just paid off the mortgage and am totally debt free.

My argument to those who bring up the tax deduction argument is this: I can give the same amount of previous mortgage interest to my favorite charity and get the same deduction WITHOUT the risk associated with debt.

Yes, you can make a higher percentage on the money if invested (maybe), but you are taking more risk. All investment decisions are a balance of risk and reward, and this is no exception. Each person will have a different approach based on their own particular risk profile and goals.
I just wouldn't know where to start with how much I agree with you....I had a friend tell me years ago, lets say you end up writing off 4,000.00 dollars against your income but the total of the checks for a year's worth of mortgage payments are 6,500 (all made up numbers) the point is why write a check only to be given a smaller portion back?

I know there are individuals who disagree with that but I am just stating what worked for me........
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Old 05-04-2014, 06:03 PM   #14
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I just wouldn't know where to start with how much I agree with you....I had a friend tell me years ago, lets say you end up writing off 4,000.00 dollars against your income but the total of the checks for a year's worth of mortgage payments are 6,500 (all made up numbers) the point is why write a check only to be given a smaller portion back?

I know there are individuals who disagree with that but I am just stating what worked for me........
+1 on all of this. We paid our mortgage off 2 years ago. We plan to retire in a few more years. Having these last few years of w***ing without a mortgage, or any debt for that matter, has allowed us to pile up the cash at a rate far higher than we ever thought possible.
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Old 05-04-2014, 06:14 PM   #15
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Yep.............so many advantages.........
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Old 05-04-2014, 06:24 PM   #16
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Congratulations on retiring debt free! This is my fifth year of debt free retirement, and I am very happy that I followed my instincts on this. I paid off my mortgage 3-4 years before retiring.

This being the internet, there are a lot of opinions on paying off debt (or not) out there. I generally pick and choose the ideas that make sense to me, and politely ignore the rest.
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Old 05-04-2014, 06:46 PM   #17
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Fully agree on paying off the debt prior to retirement. I've got about three years to go til retirement, and just recently paid off our mortgage. Feels absolutely great. I also paid off a recent car loan. Interest rate on the car loan was only 1.9% percent, but I wanted to be totally debt free for the first time in 40 years. I know a lot of folks would think that's a bad decision, but there's something about being totally debt free that's worth the paying the opportunity cost of of shedding the debt.
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Old 05-04-2014, 07:09 PM   #18
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I also paid off a recent car loan. Interest rate on the car loan was only 1.9% percent, but I wanted to be totally debt free for the first time in 40 years. I know a lot of folks would think that's a bad decision, but there's something about being totally debt free that's worth the paying the opportunity cost of of shedding the debt.
Don't feel like the Lone Ranger, I did exactly the same thing last year when we bought a new car. Dealer wouldn't do "the deal" unless we financed through them at 1.9% then hastened to add that there was no prepayment penalty. So I made one payment and then paid off the loan.

So I got the deal and he got his vigorish from the lender.
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Old 05-04-2014, 08:09 PM   #19
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I would be replacing my current vehicle as the Roadtrek gets really good gas mileage.
They get good gas mileage compared to bigger RV's, but they drink quite a bit more fuel than a typical mid-size coupe.
For example, the 2014 Roadtrek 170 is based on the Chevy Express 2500, which gets 14 combined MPG when it is empty (it'll be a lot worse in city driving when it's a few thousand pounds heavier as an RV).
If I drive 10K miles a year and pay $4/gal for gas, then my fuel cost would be $2860/yr. Compared to a 30 MPG car, that's $1530 more per year ($127 more every month).
These are heavy vehicles, and typical in-town driving will produce very poor mileage. The mileage will be a lot better on the highway. The even higher cost Roadtreks based on the Mercedes diesel models get better mileage.

This link is a crawler that searches for Class B RV ads on ebay and craigslist. They can be had for less than $30K, if a purchaser is willing to go with a model that is 13 years old or more. The rate of depreciation probably slows quite a bit by that point, too.
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Old 05-04-2014, 09:15 PM   #20
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I was in your situation a few years ago and a friend of mine is currently making the same decisions. Both of us simply searched for used Roadtreks and worked a little longer to pay for our units. We both bought units that were 3 to 4 years old so the cost was lower. I found my 2008 190 on the Roadtrek International listed above. If you aren't in a hurry, follow the site for a while and you'll find a unit you like and for the right price. Yes, it's a tradeoff because you would be working a bit longer but it worked for me and Tim. YMMV.
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