Sinking Funds

[Mysto]

Just bought a new (for me) condo in FL. We've always kept a sinking fund for household/vehicle repairs but we've added a lot of new (possible) expenses. Golf cart (our first) garage door (always had car ports) much more expensive windows (Hurricanes) etc.

My question is how do all of you determine your fund size? What kind of thinking do you use for exposure to failures? We've only been retired for about four years, so some of you may have some secrets you've learned. All thoughts are appreaciated.

[chinaco]

Oh. I thought you were going to discuss 401ks.

Is this a vacation home? Will it be used by just you or others (renters)? Renters are likely to take less care with your belongings than you might... (premature breakage).


Assuming you have insurance to repair/replace the items if damaged or destroyed....

How long do you intend to own the condo? That may sound peculiar... but, if it is 10 years some things may not wear out in that period (maybe minor repairs)... where are 30 or 40 years... you are likely to confront full replacement of a number of things including furniture.

[Mysto]

This will be our (hopefully) final home. If it goes as planned - the next step will be the drool factory or peaceful valley. We are older than some of the group here so we are planning an additional 25 years tops.

The place is 25 years old with most appliances-windows-etc original. Fridge/microwave is newer. All appliances are covered by (yearly fee) condo warranty which states they will try to fix but if they can't then it's yours (exception - central air they will replace - we will continue the warranty as I feel it's cheap insurance on repair and replace HVAC for $250 year). We also have a 4 year old car (have a 9 year replacement fund but that doesn't cover repairs)

As I said we've always had a sinking fund but I'm trying to get my head around how big it should really be.

[chinaco]

I am not sure there is a rule of thumb for that sort of thing.

You can take an inventory of known items that will require replacement someday and do the math in current $.