Balance between ER and living for today

[Ol_Rancher]

Piranha,
"the way our current pension benefits package is structured"
.. this is your greatest unknown. State teacher pension funds look at limiting early retirement age minimums as their first way to bring costs into line without tax increases. Hold your breath. Texas just implimented age 60 as minimum without benefit reductions for ER. A trend? Quite possibly. Retired teachers are grandfathered. I retired at age 53 with full benefits as per calculations. Those days are coming to a close fast. Sorry to alarm you but forewarned is forearmed.

 

[Eagle43]

We have been socking away as much as possible since we got married 5 years ago. We are both 51 and want to retire before 60. Divorce side tracked me from my goal of ER in the middle 90's. Now we are back on track, but I still have trouble with vacations. It just does not seem worth the 5k to take a week on an island or the 10k to go to Europe. I don't know if we will ever have enough to live the good life, but we both experience joy with simple things.

To quote (misquote) from "Die Broke" ... "Your last check should be to the mortuary for your funeral expenses, and it should bounce."

 

[piranha]

understood regarding pensions.  In Michigan, the minimum age is 46... but you need 30 years of service to be eligible for full retirement benefits.  I purchased the maximum years of service towards retirement allowed early on in my teaching career (5 years).  I've been teaching now for 10 years... which leaves 15 years to go to meet the current minimum requirement.

Will that change?  Probably.  I'm just hoping they grandfather in people that are currently operating under this system.  

I guess what I'd like to know is:

When Texas upped the minimum to age 60, did that apply to all current non-retired teachers or did they grandfather in any non-retired people?  

 

[Helen]

I'm 32.  My wife is 34.  I plan on retiring before age 50, and should be able to do so comfortably.  My wife and I have been saving money in various retirement and non-retirement accounts for quite awhile (we have amassed around 250 G total so far), so I think it's a goal that will be able to be easily attained. 

Wow ! How have you been able to sock $250k away by an average age of 33 - if you don't mind my asking.

Congratulations !!!!

-helen

 

[xprinter]

JG

Now, reread what you posted and see if you can find a problem
or contradiction.

Finding joy in the simple life and still yearning for travel does not seem to be a contradiction to me.

 

[cute fuzzy bunny]

The problem is that something you wrote gave him the opportunity to write a pithy post.

 

[piranha]

Helen: See this...

http://early-retirement.org/forums/index.php?topic=2282.0

 

[FlowGirl]

Now we are back on track, but I still have trouble with vacations. It just does not seem worth the 5k to take a week on an island or the 10k to go to Europe. I don't know if we will ever have enough to live the good life, but we both experience joy with simple things.

We just went to Europe for 4 weeks on less than half of $10K without sacrificing a bit. Admitedly the spouse and I got free airfare, but the round trip ticket we bought my MIL was only $400, so that wasn't a huge part of our expenses anyway. Yeah, we didn't stay in 4 star resorts, but we didn't have to rough it in youth hostels either - we just did our homework and looked for bragains along the way.

I'll be the first to admit that 5 grand is still a lot, but we saved up the money and the vacation time and made it happen because travel is our priority right now. I'm under no illusions that we can have an extravagant lifestyle, but I have no doubt that we can have "the good life" on a very middle class salary.

 

[razztazz]

We just went to Europe for 4 weeks on less than half of $10K without sacrificing a bit.

Could just give me a brief description of how you managed , not a trip to Europe but FOUR WEEKS on less that 5 grand?

I used to live there as a "stealth local" which is teh bets way to do it but I didn't see enough of Eu because i wa sworking at the time. I'd like to go back and see more but like someone else posted, moneywise the cost/bennie analysis doesn't seem worth it. But the 5 G+/- for 30 days is defineitley worth it. I personally have no idea HOW to go about getting that kind of detailed info.

 

[azanon]

I'm in the camp that also has trouble with extravigant vacations.   Even 5K dollars is a lot (realized income with taxes paid on it) when i consider the effort and sacrifice it takes to come up with that much money.   And for frame of reference of how much 5K is to me, our combined income (wife and I) is about 110K.

For now, my wife and I do have to skimp on a few things, such as extravagant vacations, to be able to afford to max both my 401(k) and our Roths, while paying for our cars and mortgage, and for our one child.   And that's given our combined income.  When making a what goes vs what stays decision about what to cut, its easy to pick very expensive vacations.   Especially when a large degree of what makes a vacation valuable can be had near your home for much less (ie: rest/relaxation, nice hotels, scenic areas, new/nice restaurants, different activities).

My beef with vacations is the inevitability of the facts one to two weeks later; 1. You have 5-10K less    2. You have nothing to show for it.   Sure you can say you have the memories.   But OUCH, 10K is a high pricetag for memories of some place that cannot differ that much from the images we all have of famous places pictured on the internet and in books.

 

[Caroline]

I'm in the camp that also has trouble with extravigant vacations. Even 5K dollars is a lot (realized income with taxes paid on it) when i consider the effort and sacrifice it takes to come up with that much money.

Two of us spent 4 weeks in Italy and a week in Vienna a few years back for well under 3K. It's not hard at all if you...

1. Fly during "shoulder season." That is, in the spring or fall when the plane fares drop.

2. Find the local corner grocer and eat picnic lunches and dinners instead of eating in restaurants -- at least most of the time. The cheeses are great, the fruit is fresh and tasty (not like the franken-food over here) and the bread is to die for. Save your food dollars for the occasional splurge. You also fill up on the free breakfast that's standard in European hotels.

3. Travel LIGHT, (one well-packed backpack per person), so you can use public transit and avoid cabs and tips for cabbies, porters, etc.)

4. Stay south -- Italy and Turkey are FAR cheaper than Germany, Holland, etc. Sunnier too!

5. Use the internet to find cheap accomodations. (We're in Italy to see the art and the sights and eat magnificant food -- who cares if there's no TV?) I will do a hostel in a pinch, but it's not necessary with so many small, clean hotels in every city.


If travel's not your bag that's all good, but if you're staying away from places you want to see because you think they cost $ 10K, you're missing out unnecessarily. Get a copy of Rick Steves' "Europe through the back door" or see his website for lots of great tips on where to stay, what to eat, etc.

Hope that helps anyone who wants to go to Europe.
Caroline

 

[Caroline]

My beef with vacations is the inevitability of the facts one to two weeks later... You have nothing to show for it.

One more thing, if I may be so bold...

I don't actually agree that you have nothing but memories to show for a trip to other locales.  You learn a LOT about other cultures, their views, their ways of doing things (which may work just as well or better than yours) and their philosophies. 

This is especially true in developing countries but also goes for developed ones.  I have had some of my assumptions turn on their heads -- and I believe I'm more open-minded and thoughtful as a result.

Even if all I had were memories... the memory of ONE Leonardo da Vinci or Michaelangelo work would be priceless. You CANNOT believe how beautiful these masterpieces are in real life.


IMHO
Caroline

 

[FlowGirl]

Could just give me a brief description of how you managed , not a trip to Europe but FOUR WEEKS on less that 5 grand?

Sure.  The first tip is that we spent most of our time in Spain which is fairly inexpensive for a country on the Euro - we like to slow down and see one country or region at a time when we travel.  Spending most of our time in one country also meant that we didn't have enormous transportation costs from trying to see 30 countries in 30 days.  Second is that we travelled in the off season - April when the weather was still great and very few tourists.  Third is that we spent most of our time in smaller cities and towns - we liked Madrid, but found it way more expensive and less interesting than other places we went.  Fourth is that we used the Lonely Planet guides to find cheap accomodation.

Overall we spent around $50/night for 1 star hotels (most of them quite charming) and probably about $50/day for food (breakfast and lunch were super cheap, but we ate well at dinner).  That's $3000 for the basics.  We rented a car for one week at $160, spent 6 days in Morocco which is dirt cheap (train ride from Spain only $20, and hotels at $20/night) and spent our last week in Madrid with my MIL with no transportation costs other than a few subway rides.  So, we only had about a week where we were paying for train rides.  Attractions were generally cheap - the Alhambra was the most expensive at 10 euros, but most cathedrals and museums were cheaper than that.  A lot of places, like beach town of San Jose, we had no entertainment costs since we were there to hike and enjoy the scenery.

I didn't keep exact records, but just added up all of the ATM withdrawals and credit charges when I came home and called it all "vacation spending" in Quicken.  I don't think you could travel in every European country for as cheap as we did, but there are a lot of places in Eastern Europe where you could do even better.

 

[tozz]

A couple of years ago we spent a month traveling from Istanbul to Prague for well under $2000 combined (plus air).  We generally followed Caroline's tips and it certainly didn't feel like a "budget" trip.  Istanbul, Transylvania, Budapest and Vienna were all spectacular.  We were even able to watch the Bulgarian border police shake down the entire train except for us.  We never really figured out why they left us alone--we were probably the only ones in the train who could easily "tip" them $10 without pain.  For the Bulgarians, that was a couple of days pay. 

Could just give me a brief description of how you managed , not a trip to Europe but FOUR WEEKS on less that 5 grand?

 

[moghopper]

I'm in the camp that also has trouble with extravigant vacations. Even 5K dollars is a lot (realized income with taxes paid on it) when i consider the effort and sacrifice it takes to come up with that much money.

For now, my wife and I do have to skimp on a few things, such as extravagant vacations, to be able to afford to max both my 401(k) and our Roths, while paying for our cars and mortgage, and for our one child.

It's all about choices. I'd pay the 5K for a vacation I'd like, but I'd shudder at the thought of paying for a mortgage and 2 cars. I could be wrong, but that made it sound like you have notes on both of them...

 

[FlowGirl]

My beef with vacations is the inevitability of the facts one to two weeks later; 1. You have 5-10K less    2. You have nothing to show for it.   Sure you can say you have the memories.   But OUCH, 10K is a high pricetag for memories of some place that cannot differ that much from the images we all have of famous places pictured on the internet and in books.

My opinion is that no one should put themselves in a position of feeling guilty about spending money.  If spending 5K on vacation makes you go "OUCH" then definitely don't do it.  For us though, vacation and travel is one of the few areas in which we have never regretted the dollars spent.  When we come back from a trip we treasure the memories and look forward to saving and planning for the next trip.  For us a vacation abroad is definitely NOT equivalent to staying home.

Azanon, we make a lot less than you and your wife, so 5K isn't peanuts for us either.  On the other hand we have some unique savings opportunities - prior to going on vacation my husband had just spent 7 months in Iraq where we were able to save about 80% of his salary tax free during that time (he spent all of $300 during those months and I spent most of his deployment in a third world country where the cost of living is extremely low).  A ton of money got invested and I don't feel even slightly guilty about the chunk we used for vacation.  With 18 months of deployment out of the last 30,  we have very little flexibility when it comes to taking vacation, so we make the most of it when we can, and I think because of my husband's job I have a very accute sense of the whole "life is short" thing.  On the other hand we drive very used econobox cars, have no cell phones or cable TV, and make other "sacrifices" that the average American would probably find intolerable.   Ironically, my husband goes "OUCH" when it comes to spending on tangible goods like cars and home electronics, probably beause he's not home enough to enjoy them - the memories of a great trip mean a lot more to him.

 

[azanon]

I'd pay the 5K for a vacation I'd like, but I'd shudder at the thought of paying for a mortgage and 2 cars. I could be wrong, but that made it sound like you have notes on both of them...

Re the house, yeah i have to confess as a 30 year old when i bought it, i didnt have 150K in my pocket to buy it outright. I did have 30K to avoid PMI. If your expectations are that i should have the 150K first, then wow, i'm not sure what to say. I know Dave Ramsey agrees with that. My interest rate is 5.96% and i can deduct the interest, so I dont think its such a bad thing to finance it.

I own one of my cars, the second is financed. Its like this; the car's financed at 3.59%. I have far far more than that in stocks, earning quite a bit more. I could pay it off, but because i understand basic math, i dont.

......

Now sure, i could liquidate all my retirement savings and almost pay off both the house and car and maybe can afford these big vacations we're discusisng. But I think i'm taking the wiser approach.

 

[tozz]

It sounds as if you might be more of a homebody?  In that case, spending $$ for a vacation ($5-10K sounds high, though) might not be worth it.  However, in my case much of my disposable income has gone towards traveling over the years.  I don't regret one penny that I have spent.  It's the simplest way to get out of your own head and question your own preconceptions.

My beef with vacations is the inevitability of the facts one to two weeks later; 1. You have 5-10K less    2. You have nothing to show for it.   Sure you can say you have the memories.   But OUCH, 10K is a high pricetag for memories of some place that cannot differ that much from the images we all have of famous places pictured on the internet and in books.

 

[azanon]

My opinion is that no one should put themselves in a position of feeling guilty about spending money.  If spending 5K on vacation makes you go "OUCH" then definitely don't do it.  For us though, vacation and travel is one of the few areas in which we have never regretted the dollars spent.  When we come back from a trip we treasure the memories and look forward to saving and planning for the next trip.  For us a vacation abroad is definitely NOT equivalent to staying home.

To clarify, its expensive vacations i opposed, not vacations per se.  I'm from Arkansas and can go have a blast in the French Quarter with my wife for a few hundred instead of thousands and feel like ive had an awesome vacation.  

With 18 months of deployment out of the last 30,  we have very little flexibility when it comes to taking vacation, so we make the most of it when we can, and I think because of my husband's job I have a very accute sense of the whole "life is short" thing.  On the other hand we drive very used econobox cars, have no cell phones or cable TV, and make other "sacrifices" that the average American would probably find intolerable.   Ironically, my husband goes "OUCH" when it comes to spending on tangible goods like cars and home electronics, probably beause he's not home enough to enjoy them - the memories of a great trip mean a lot more to him.

So most of the time, you guys "rough" it (in the definition of most other americans.... and me  ;-)  ), but live the good life for a few weeks out of the year.   Guess i just prefer those flip-flopped (+ a reasonable, local vacation).

 

[azanon]

It sounds as if you might be more of a homebody?  In that case, spending $$ for a vacation ($5-10K sounds high, though) might not be worth it.  However, in my case much of my disposable income has gone towards traveling over the years.  I don't regret one penny that I have spent.

If by homebody, you mean i dont like to spend 5-10K in one week on a trip, ....   The answer's yes.

I dont think there's any right or wrong on what to spend your money on, if its available.  There's a gazillion things one can buy.  Its just easier for me to spend money on things i can possess, even if its a depreciating asset, like a car.  I enjoy having a nice house, for instance, and its something i can apprecaite each and every day i drive home and can see it with my own eyes.   My wife's VW Jetta I just bought last year I can also appreciate day after day.  I dont have to stop and try to recall some memory in the recesses of my mind or go and dig through a photoalbum, or fire up the VCR to try to remind myself what those thousands paid for.

Now if there weren't cheaper alternatives that couldnt give me most of the feelings, enjoyment, and R/R that vacations provide for people, then i might just pay up for my sanity.   But for now, i can just play mind games and even drive just to Memphis (from LR where i live) and go enjoy what Memphis has to offer "on the cheap".

 

[xprinter]

Guess I am a homebody also. I always end up watching my neighbors house when they go on vacations. Fun for me is sitting outside in the shade with a cigar and some wine.

 

[moghopper]

If your expectations are that i should have the 150K first, then wow, i'm not sure what to say. I know Dave Ramsey agrees with that.

Nope... I'm all for mortgages, or we'd be a nation of renters. I think paying them off is prudent.

And you clarified things, as I thought you had a mortgage + 2 car notes...

Hey, it's your life, you should do what you want... to be honest, I can't recall ever spending 5 grand on a single vacation. I think I'd have a hard time doing it.

 

[laurence]

We had one, two week, extravagant vacation to Hawaii. Cost us 5 grand. Definitely don't regret it, still smile when we think of it, but we also feel like it's an experience we can cross off our list. We still want to travel/vacation a lot. But now we know what the 5 star treatment is like, know we have better uses for the money, and will never wonder "what if".

My parents took me to Europe as a kid, while I may have missed a lot of the subtleties, it's still one of my fondest memories. DW and I will do it someday, but we won't be doing it 5 star! But for now, it's invest, mortgage, cars, and camping. Heck, I'm too new to the company to have decent vacation accrual anyway. A month in Europe would be half leave without pay. In the same way Azanon enjoys the cars, we spent 4 grand on a spa, and it gives us enjoyment every week. Couldn't afford to to both that and the vacation.

 

[FlowGirl]

To clarify, its expensive vacations i opposed, not vacations per se.  I'm from Arkansas and can go have a blast in the French Quarter with my wife for a few hundred instead of thousands and feel like ive had an awesome vacation.  

That's great, and we do that too - right now we're on the tail end of a weekend mountain biking trip in Northern Idaho, which is costing us next to nothing.  We get away almost every weekend in some form - SCUBA diving, biking, hiking, or just a weekend in the big city eating and drinking well.  Most of our weekday activities don't cost much either - my husband keeps busy by training for triathlons and working on his MA degree. I log at least 120 miles a week on my bicycle, try to improve the foreign languages that I just barely speak.  Good dinners (I love to cook) with wine and friends are a regular feature of our life weekday life as well.  However, a big vacation per year is important to us too, so we budget for it.

So most of the time, you guys "rough" it (in the definition of most other americans.... and me  ;-)  ), but live the good life for a few weeks out of the year.   Guess i just prefer those flip-flopped (+ a reasonable, local vacation).

Hmm... I don't think my spouse considered driving his used Honda Civic the 3 blocks to work as "roughing it" and we're too busy doing things to have TV most of the time.  We support two people on one income (+ a little bit from my freelance), save a ton, have a blast almost every weekend, take one big vacation a year, have great friends, and will retire by age 45 on more than we make right now.  Yeah, spending 7 months in Iraq was probably "roughing it" by anyone's standards, but the spouse actually loves his work and feels like he's making a contribution - go figure.  Plus in two months we'll be moving to Japan for 3 years for his self-described "dream job".  With the time apart, its not a life most couples could live, but from our perspective life is one grand adventure and I have no complaints.

 

[FlowGirl]

  In the same way Azanon enjoys the cars, we spent 4 grand on a spa, and it gives us enjoyment every week.  Couldn't afford to to both that and the vacation.

I think spending money on the spa is a great way to go! If we had a permanent home and weren't about to spend the next 3 years abroad we would probably invest more in home ammenities. Right now though we're in a situation we have tons of vacation time (the spouse had 90 days on the books when he came back from his deployment), no kids, and no permanent roots in an area, so we're taking advantage of that while we can. It's likely that retirement for us will feature less travel and more investment in the permanent luxuries of home, car, etc. - a little backwards from most people's plans I guess.