Retiring debt free!

[dnorton50]

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.

[pb4uski]

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.

[dnorton50]

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

[pb4uski]

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 $$$$.

[heeyy_joe]

Roadtreks for Sale - Road Trek International

[dnorton50]

They do hold their value pretty well. They are just the right size for my husband and I and our two rat terriers.

[martyb]

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!

[Kimo]

Quote:

Originally Posted by dnorton50 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.....

[samclem]

Quote:

Originally Posted by dnorton50 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.

[dnorton50]

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.

[dnorton50]

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

[treeofpain]

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.

[Kimo]

Quote:

Originally Posted by treeofpain 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........

[Derslickmeister]

Quote:

Originally Posted by Kimo 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.

[Kimo]

Yep.............so many advantages.........

[W2R]

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.

[txtig]

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.

[Walt34]

Quote:

Originally Posted by txtig 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.

[samclem]

Quote:

Originally Posted by dnorton50 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.

[jim747]

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.