48 and planning

[livelaughlovejs]

I left my job as a playground aide in 2007.

My DH has a good job. We have been married for 21 years.

My dad calls me retired. When dad first said "your retired Martha Stewart" I was surprised, then I realize I'm not going back to a part time job or school. He might be right.

DH retires in 3 years when our daughter finishes school. We don't hurt for money but will have 1/2 his income when he retires.

We started planning to Fulltime RV around the USA when DH retires. DH is 54.

Now my new passion is researching how to fulltime RV & learn about travel blogs. I would like to blog about our travels.

I think we have enough information to begin RVing when he retires.

We should have 5,600 a month from his pension. 50,000 in his 401 K. A down payments on an RV and a paided for Tow Vehicle. It seems like enough for our lifestyle.

 

[JBmadera]

welcome! Retirement and RV'ing are a perfect match.

 

[Tom52]

Welcome! I have a similar interest in RV'ing after retirement, not full time but it would be great to get away from the upper midwest during Dec thru March. Alas, DW is not so thrilled with some of the issues that go along with a big DP motor home.

 

[livelaughlovejs]

Well, I just did the AARP retirement calculator and it says I need more money to retire

How much more do I need?

 

[Major Tom]

Well, I just did the AARP retirement calculator and it says I need more money to retire

How much more do I need?

How much more do you want?

You say that you'll be getting about $5,600/month from DH's pension. The 50K in the 401K is just icing on the cake really, as a 3% withdrawal from 50K will only be $1500/year.

Unless I'm missing something, you don't need to use a retirement calculator in order to see if you have enough saved up, as DH's pension will be making up the bulk of your income. The main question to answer is - what will your expenses be, and can you cover them with $5,600/month?

I know very little about pensions, but will the payout be adjusted for the cost of living (COLA) every year? Another possible consideration.

 

[livelaughlovejs]

We are leave the 401K alone.

I ran the numbers we should have enough to cover all we need.

Those retirement calculators are tough.

 

[Mulligan]

As a person who also lives on a pension also, our accounting methods are little different than most. I only have a smaller 6 figure amount in reserves, but it is really a future retirement account for my offspring, as I live on my monthly cash flow stream, and just save what is left. Major Tom brought up a good point that you didn't respond to. Is your husbands pension COLA'd? At your young age that is huge. 3% yearly inflation will cut the value of that pension in half in 24 years. Have you got healthcare premiums and other possible old age maladies accounted for, or will you have it as a retirement benefit? There is nothing wrong with living on a pension with small reserves, but you want to make sure you have inflation and your budget properly accounted for. Falling into debt in retirement would be no fun!

 

[livelaughlovejs]

COLA-Yes

Healthcare premiums I have accounted for PPO with blue shield for two people unless things change with his company in three years.

We should have the debt paid off this year and pray we never go there again.

We paid on a house with a 15 year loan and lost it so all we have is the pension and the 401K. We rent now.

My daughters schooling should be paid in the next two years.

I admire the people that "woke up" sooner than us to plan for retirement.

 

[broadway]

You are all set if both your husband and you stay healthy.

The only caveat I have is regarding longterm care. Because there is a family history of Alzheimers, I am more concerned about being able to pay for something like that.

$50K in 401K isn't going to cover any length of nursing home care or assisted living expenses.

 

[livelaughlovejs]

My father had a stroke and is in assisted living for the last 5 years most of his bill is paid by the veterans. Even with veterans help its expensive

Its not a fancy place but its one of the better places for assisted living in our area.

 

[RetiringAt55]

We don't hurt for money but will have 1/2 his income when he retires.

What concerns me is that you say you don't hurt for money and believe you can live on half his current income in retirement, but you haven't been saving all these years. If your living expenses are really so low, you should have a lot more in the 401k plan or other investments. What is the debt you referred to? The tow vehicle and RV? They are not going to last forever and you will have to budget in repairs and replacement costs.

Please do a detailed analysis of what you have actually been spending to get a good idea of what your living expenses will be. I am afraid that your living expenses are actually a lot higher than you believe since you have taken on debt and not been saving. Don't forget to count taxes in your estimate. Is there a survivor benefit on his pension or do you have life insurance on him? Will either of you get social security? Also, keep in mind that when one of you passes your tax bracket will go up and you will be paying more in taxes at that time.

 

[livelaughlovejs]

Our debt is from when we owned a home. We kept going into debt to pay for a 15 year mortgage payment we couldn't afford.

For repairs and replacement cost we are buying a service contract that covers the RV. Plus putting money away from his pension for the minor repairs. (from listening to RV message boards & blogs I have found out how much I would need to put away for minor repairs each year).

The used Class A diesel motorhome payment should be lower than our rent. (the ones we look at)

My husband has a survivor benefit on his pension from my understand it says... If one of us pass away the survivor still gets the same amount of money each month.

Taxes--I make South Dakota my domicile state so taxes are lower. The RV community has a mail service that helps fulltime RVer's with this.

Social Securityy: we have never put in enough for it so.. NO

Tax Bracket: If this happens the survivors lifestyle would defiantly change

Well, I have to go over our budget and see if I missed anything (might save me some problems later). Thanks

 

[RetiringAt55]

My DH and I also like to RV. We bought a trailer and tow vehicle this year and joined Good Sam. We hope to make it a big part of our retirement although we don't plan to full time. In researching camping, I saw they have some good books on full time rving. You may want to pick one up to help you get a better idea on budget and lifestyle considerations.

I have been working out detailed budgets lately as part of our retirement planning. I took numbers from Quicken for the last year to get very hard estimates of what our current spending is and then adjusted them accordingly. I made several budgets based on the different time periods of retirement. Although you want to full time rv short term, this may not be realistic long term when it may just be you. It may be too difficult to rv alone. You need to plan out those stages of retirement too.

I made estimated budgets assuming different scenarios. For example, one during early retirement with both of us and one during later retirement with just one of us.

Here are the categories I used:

Housing: Mortgage,Home Insurance,Real Estate Taxes,Utilities,House Repairs,Cell Phone,Internet
Transportation: Car Insurance & fees, Gas, Vehicle Replacement, Maintenance
Food: Groceries, Dining out
Medical: Premiums, Prescription, Long-term care insurance
Family: Life Insurance, Gifts, Clothing, Personal Items, Hobbies, Grooming, Pets, Household
Entertainment: Vacations, Movies/Theater, Other
Miscellaneous
Charity

I am concerned that you have no safety net. RVs, especially used ones, can have very expensive repair costs and insurance. Class A motorhomes depreciate very quickly. What if one of you got sick when you are on the road? You need a safety net to cover emergencies. If you post your budget numbers, we can tell you if it seems realistic.

 

[Midpack]

Others have commented on your $ situation. There are some accomplished RVers here, hopefully they'll come along in the next day or two.

Welcome aboard...

 

[Mulligan]

COLA-Yes

Healthcare premiums I have accounted for PPO with blue shield for two people unless things change with his company in three years.

We should have the debt paid off this year and pray we never go there again.

We paid on a house with a 15 year loan and lost it so all we have is the pension and the 401K. We rent now.

My daughters schooling should be paid in the next two years.

I admire the people that "woke up" sooner than us to plan for retirement.

A few more thoughts..have you budgeted for deductible costs in medical care in addition to premium? Dental care? Unless you are of one to pull them all and get dentures, you need to be cognizant of this as one ages. Dental care can be very expensive, along with eye care. The good news is your monthly costs will go down when schooling obligations end.
I cannot over emphasize the need for you to know your annual expenditures and how close they butt up to your pension income. I retired with very little in asset base like you, three years ago. But I made very sure that I had a 20% buffer between monthly income and ACTUAL expenditures. Plus, being a little on over cautious side, I have had a part time job the last three years, to help greatly increase my safety net.
This is only my opinion and I could be very wrong, but I am worried all your budgeting plans are not fully recognized yet. Most successful ER people here have had at least 3 years of detailed budgeting along with establishing contingency funds for various possible expenses down the road. I was very cognizant of my budget, but plan to use the extra leftover monthly income as my contingency fund.

 

[livelaughlovejs]

Budget

This is my budget. I have no long term care insurance but both DH and I are veterans.(if that matters)

RV Payment 700
RVService Plan 250
Campground 800 or Boondocking Mostly 400
Maintenance RV 100
Maintenance Car 25
RV Insurance & Car 300
Gasoline Non travel 400 Travel 1,000
Propane & Hook Up 40
Communication Internet 60
Satellite 100
Cell Phone 200
Health blue shield PPO 200
Dental insurance 100
Optical insurance 50
Recreation Hobbies 50
Laundry 30
Timeshare 50
Entertainment 150
Storage 60
Food 600
Household Stuff 30
Restaurants 100
Clothing & Hair Care &Skin 50
Postage 25
Parent Plus Loan-might have this debt 100
Camping Club Yearly Fee 20
Vacation 50
Sewage Fee 20

Total Monthly

What did I miss?
Do the numbers look realistic?

 

[aja8888]

That adds up to $4500 on a high end basis and is current day costs. What about income tax as you will have to pay on the pension income?

Also, keep in mind that service plans on vehicles have deductibles and don't pay for normal wear items such as brakes, tires, tune ups, etc.

It's not a bad plan to live as an RV'er, but if something goes haywire and you have to abandon the venture, all the costs change. I would set up a scenario where you have to give up the RV life and settle into a long term housing situation.

Hope this helps your thinking.

 

[rodi]

Regarding your veteran status and long term health care.

My FIL is a purple heart WWII vet with a 20% disability related to his service. He has not been able to find space in a Veterans home in his current state or his former state. The wait list is long, and the preference is given to those with 50% or higher disability related to service.

The Veterans retirement homes coordinate with the VA medical system, but are NOT federal programs. They are state run programs. They do not take Medicaid - but operate in a similar fashion - spend down of assets till you have nothing left, then they pick up the tab.

I've had long talks with the veterans homes outside Lexington, Kentucky and in Philadelphia.

Some of the less populated areas have shorter wait lists to get in. (There's a home in Western PA that had space, for example.)

We ended up placing him in a home that accepts medicaid and will be doing the snapshot/spend down as soon as my husband gets full guardianship of his father. (Only has emergency guardianship at this point.)

I guess I'm cautioning you to not consider the veterans homes as the complete solution to long term care. It's very much a space available for those most directly impacted by their service.

 

[RetiringAt55]

Did a quick look and here are a few things that may be missing:

If you are traveling, you may be out of network and have to pay higher medical costs. Where are prescriptions and out of pocket medical costs? When you hit 65, does your plan require you to take Medicare Part B and then it acts as secondary? If so, your medical will go way up.

Saving for replacement of your toad.
Vehicle maintenance seems low to me.
Saving for downpayment on next RV
Food and Dining may be low depending on how you live. Also travel groceries are often more expensive than what you may be used to in SD.
Clothing and grooming seem too low. Mine is more like $150/month for the two of us. (Just shoes and jeans can add up.)
Household seems too low.
Seems like you could cut down the cell phone plan to save a little money. maybe just have one phone since you will be together a lot.

I think you are too close when tax is added in.

 

[Mulligan]

I was assuming your monthly pension income was after tax, as that is all I ever concern myself with. This is a ballpark guess, but if your stated income is pretax, you will have to take somewhere around $900 a month off your monthly income total which drops you very close to expected expenses. The RV world is not an area where I can give meaning budgetary advice. All I know for certain is expenses crop up everywhere that aren't always accounted for. That is why for me, I built a triple layer of fat to survive on my monthly income. 1) made sure budget was 20% under my income 2) I have a $300 a month "unexplained expenses" category as things happen 3) A fat refund check each year.
I would be very nervous starting a young age retirement with expenses and income close together. Would you have a budget cutting mechanism in place if costs were exceeding income?

 

[broadway]

Health blue shield PPO 200
$200 for health insurance for 2 people
That seems awfully low.
Are you planning on getting free care through the VA, and this is for anything that is not covered?

 

[livelaughlovejs]

I'm not sure what my health insurance will be as a reitred person so thats what we estimated. I'm not planning on using veterans. We have a HMO now but will have a PPO Blue shield in retirement. I will look into it more. Thanks

 

[aja8888]

I'm not sure what my health insurance will be as a reitred person so thats what we estimated. I'm not planning on using veterans. We have a HMO now but will have a PPO Blue shield in retirement. I will look into it more. Thanks

If things stay the same for you up until retirement and Medicare is the option, plan on EACH of you spending at least $100/month for Part B and $35/month for a Part D drug plan.

Remember, Medicare and Part D by themselves are not great plans and there are deductibles for many things. Most folks supplement Medicare with a Medigap policy which could cost up to $200/month EACH.

I'm not sure if Medicare Advantage plans will be around years from now, but they are less costly than what I stated, but have less options when picking providers.

In any event, after 65 medical insurance costs are pretty high if you want good coverage. You probably will need good coverage getting older, though.

 

[broadway]

She said her husband was 54. That is 12 more years before Medicare for him. No information about her.

Using ehealthinsurance.com to get quotes for male 54 non-smoker and female 50 non-smoker living in Pierre, SD. The cheapest rate was $370 /month.

The budget for health insurance needs to be upped to be realistic.

 

[aja8888]

She said her husband was 54. That is 12 more years before Medicare for him. No information about her.

Using ehealthinsurance.com to get quotes for male 54 non-smoker and female 50 non-smoker living in Pierre, SD. The cheapest rate was $370 /month.

The budget for health insurance needs to be upped to be realistic.

Yeah, I stated if things stay the same until Medicare kicks in. Agreed, future health care costs will be higher for insurance, not including what they have to pay outside of the coverage.