Three Years in retirement, Should have done it sooner

[Senator]

I recently passed three years in retirement, and I thought I would give an update. Several people have wondered where I have been. I travel extensively now even with my 24 renters. I try not to see any snow, except on the news.

I sold a rental house in St. Paul and did a 1031 Exchange to a place in Kissimmee, FL. I purchased the St Paul place for $38K and sold it 30 months later for $175K, after renting it for 18 months or so.

The Kissimmee, FL place I use for a mostly “hands off” Vacation rental. It is rented out quite a bit, and is a great investment only a mile from the Disney World exit. I stay there periodically to get repairs done (and get a tax deduction) and see a few sights.

Purchased a place in Florida on 4-acres, where I homestead and claim residence. The DGF remains a resident in MN, and homesteads the place in MN. The net tax savings should be over $5K annually. I am already away from MN more than 6-months of the year anyway, there is no sense me giving them any more money than they already have.

Visited Churchill, Manitoba and saw a ton of wild polar bears. I spend four days and three nights there. It’s a bit eerie walking in downtown Churchill, at night, knowing that a polar bear could come at you. And it was only about a 3-block walk. They did have to run-off a polar bear outside our hotel while we were there.

Saw sunrise on Mount Haleakala, and did the 26-mile bike ride down the mountain to the ocean. Whale watching of Lahina, Maui. Saw sunset on Mauna Kea (13.8K elevation) in Volcanoes National Park, and did a bit of stargazing while up there. I scattered my mothers’ ashes in the waters off Diamondhead, at Waikiki from an outrigger canoe, as she wanted. And we surfed a wave in the canoe on the way in. Something that should have been done 20 years previously. We did a lot of hiking on Lanai.

We went to Monowi, NE for a burger lunch. Monowi is the smallest town in the Northern Hemisphere. Population 1. We met Elsie Eiler. She is 85 years old and runs the Monowi Tavern and is very active and quite a lively character. She works 12-hours a day, 6 days a week. By herself mostly. The tavern has dirty plywood floors and a real outhouse for facilities. You may have seen her on many different TV commercials or highlights. Arby’s, Prudential Financial, and several others. Here is the link to the Prudential commercial. Sort of retirement advice too.
https://www.ispot.tv/ad/drgH/prudential-the-state-of-us-monowi-ne


We have a goal of visiting every national park. So far, we have seen many since we retired, and have a bunch more to see.

Out healthcare is still free and working great. The NW is up over $1M since retirement. No complaints, the plan is working.

 

[Scout]

Wow!! Thanks for the update. You’re living the kind of retirement many of us hope to have. Keep us posted!!

 

[pacergal]

thanks for the update--I was thinking about you a few months ago! I followed your planning as I was also retiring in 2016. It sounds like all of your rentals and investments are continuing to work for you. Great pictures.
Sorry to hear of your mothers passing.

 

[UnrealizedPotential]

Senator,
I was wondering what happened to you. Sounds like you are busy living life. I also am now retired for 3 years. It's gone by quickly.

 

[Jerry1]

Wow. Great three years. Hoping for many more like that for you. I’m getting close to the three year mark, but have done nothing like you have. Need to up my game a bit. Okay, a lot.

 

[Senator]

Wow. Great three years. Hoping for many more like that for you. I’m getting close to the three year mark, but have done nothing like you have. Need to up my game a bit. Okay, a lot.

Thank you everyone for the kind words.

I try to go somewhere every month. I just posted some highlights over the past year. Sometimes it's a close destination, sometimes a bit further. Always in the USA or Canada.

October it's the Balloon Festiva, November it's Christmas at Branson, MO. December it's back to FL. We will do a lot of sight seeing there too. I would like to catch a wild monkey there for a pet.

 

[Retch The Grate]

great update, nice to see you post again.

 

[kcowan]

Hi Senator
It is nice to see you working your plan. I had wondered where you went.

Would you mind commenting on how your actual compares to what your plan was?
e.g. was the dual homestead part of the original plan?

 

[NgineER]

Good to hear from you Senator - sounds like you are enjoying retirement!

 

[ExFlyBoy5]

Glad to hear the update...I too had wondered where you had gone. When it comes to retirement, you are certainly doing it right!

 

[Winemaker]

Good for you, sir! May you continue your escapades for many years in good health!

October will bring my 5th year, and this retirement thing is great. I never thought that I would be this busy having fun, to my schedule.

 

[jazz4cash]

I’m glad you are enjoying your retirement. Every time a real estate thread pops up, I always think “what would Senator say?”

 

[NW-Bound]

Good to hear from you.

Visited Churchill, Manitoba and saw a ton of wild polar bears...

Hey, given how much a polar bear weighs, that's only 2 bears.

Still, that's 2 more polar bears than what I have seen myself.

 

[audreyh1]

Terrific, congrats! Glad you are having such a great time!

 

[dm]

Congrats, my father said the same thing about wishing he had done it sooner. He was 57 when he quit working, he never claimed he retired. That was back in 1991.

I took his advise and quit at 50. That was 12 years ago and I sure haven’t regretted it either.

Now that I’m the ripe old age of 62 im also thinking of seeing some of the national parks while I can still get around ok. I need to get the park pass.

 

[Senator]

Hi Senator
It is nice to see you working your plan. I had wondered where you went.

Would you mind commenting on how your actual compares to what your plan was?
e.g. was the dual homestead part of the original plan?

The dual homestead thing happened by accident. I was going to follow the weather in my fifth wheel, and decided it was cheaper to buy a place. My annual expenses for the Florida place is under $2,500. A 2-month stint in an RV 'Resort" was more than that. I am going to use the Fall as RV traveling time, and the winter as car traveling in FL. Summers will be partially spent in MN.

I made a verbal private offer on one place (and hired an inspector), and just by chance looked at the MLS at the same time. I saw a HUD home that was newer (2007) and larger (1512 sq ft), and $10K cheaper with the bids coming to a close at the same time. So I made an offer on that one as well, thinking it would not be accepted. I dropped the first place when it got accepted. It was only $50K cash, no payments.

Once I had a property, and after I thought about it and talked to accountants, it made sense to "sell" my place to my DGF of 29 years, $0 down, $0 payments, 3-year balloon and change my residency to FL. I get a $250K homestead exclusion and we can both homestead properties.

Since I have more income, it should mean less taxes. She gets free healthcare (Healthcare, dental, vision, pharmacy, etc.) here in MN, so needs a MN residence. We are away from MN more than 6 months already. Once I am a FL resident, my trips to MN to manage rentals will be tax deductible (mileage, meals, lodging, etc.).

I keep spending more every year. Trying to decide what to do to have fun. Planning trips to see 'stuff'. I have been hiring out many rental functions too, rather then doing it myself or letting it go.

Much of my larger spending items are from buying assets like the Kissimmee vacation rental. It costs about $45K over what the 'old' property was sold for. I had to pay commissions, buyers closing costs, $30K in furniture, etc. It makes travel to FL a tax deductible trip, as long as I document at least 4-hours of maintenance a day while I am still a MN resident.

Now that I’m the ripe old age of 62 im also thinking of seeing some of the national parks while I can still get around ok. I need to get the park pass.

I am a disabled vet. The access pass is free. State parks are free in MN and FL for disabled Vets.

 

[Senator]

Good to hear from you.

Hey, given how much a polar bear weighs, that's only 2 bears.

Still, that's 2 more polar bears than what I have seen myself.

yep, maybe even only one... We did see the bears constantly, probably 15 different wild bears in total. Some close (20 yds), some far (200+ yds). You drive for a 10-15 minutes and see one for 15-20 minutes. Then drive and see another. Then stop and eat lunch on the tundra buggy. Seeing bears on the way out and in. Sometimes the same bear in the same place, sometimes not. And it was like that for two days.

They would probably see a bunch more bears if they threw a few baby seals off the tundra buggy's every time they went out. Full grown seals would be too heavy. I made that suggestion, but for some reason they thought it may be illegal.

The Winnipeg zoo is actually the best place to see polar bears. They have a bunch of bears, maybe 12-15, and even a walking tube under the bear pool. It's not the same as seeing them in the wild though.

 

[Scuba]

Great update, Senator! Congratulations on living your retirement life your way!!

 

[FI_by_2023]

Thanks for the update, Senator. I often wondered how things were going as I followed your posts before you pulled the ripcord. I had assumed things were going well, which sounds like is the case.

In another recent post, you mentioned that you likely went too early. Sounds like all has been good. Do you mind expanding on whether your timing was right? Thank you.

 

[Senator]

Thanks for the update, Senator. I often wondered how things were going as I followed your posts before you pulled the ripcord. I had assumed things were going well, which sounds like is the case.

In another recent post, you mentioned that you likely went too early. Sounds like all has been good. Do you mind expanding on whether your timing was right? Thank you.

When I left work, I wanted it to be a one-way ticket. I could have easily come back, and probably still could to my previous boss. To me, that is a failed project.

I wanted to reach age 55 so hopefully SS would not change on me. It would also allow some one-time pulling from retirement accounts to be available easily without penalty if I needed it. healthcare was a concern, however I secured lifetime healthcare shortly before that, so that helped. The DGF got it free too, based on our non-marital status.

I likely went too early, but it was nice to have a few insurance dollars just in case. So in retrospect, financially I could have left earlier. For peace of mind, I left at the right time. My first year, I took it pretty easy. I completed a few projects and did a lot of travel planning and small trips.

Based on my spending since I retired, and not yet dipping into my investments or future income sources, I could have went earlier. My liquid NW has increased by ~$700K since I left work. If I count NW increase, it's quite a bit more.

I still have SS at some point (~$1,800 @ 62), a pension ($1,262 @ 65), and I continue to I reinvest dividends ~$3K a month. That's another $6K a month, more of I delay SS. And I can take a bit more than the dividends and sell rentals. I am going to hire out more rental tasks as I go, and have been.

Money has not been an issue in retirement. I spend a lot at restaurants, and travel. I may buy a couple of horses soon, that will take up the slack...

I have been purchasing some big ticket items, all paid for.

Truck $75K
5th Wheel $38K
Independent suspension and disc breaks on 5er - $7,800
Second home in FL $50K
Vacation Rental additional investment $35K
Additional 3 acres next door $21K
Polar Bear Trip $10K
2 week, 4-island Hawaii Trip $10K
Tax certificates $15K

Plus some other major rental expenses, like a $30K flat roof, $7,200 in garage aprons, flooring in vacation rental $7,800, Shed $5K, decks $5K, plus a lot more that I can't even think of.

 

[kgtest]

Livin the Dream Senetor! Keep on, keepin on! I think everyone around here values any input on the RE side of the house...I know I do.

One of my stretch goals is to eventually buy enough rentals to produce an income for "the family" where my son and daughter can just come into the RE office for work.

I feel like we will eventually have a property portfolio big enough to accomplish this. Was that 1031 from MN to FL more difficult across state lines? Surely something I can google, but I'm guessing it's just a matter of filing the taxes properly.

 

[Mdlerth]

Shameless plagiarism or learning from success? You decide

I remember eagerly following your ER countdown three years ago. It convinced me to stop lurking and join the forum.

Now that I've modeled many aspects of my own glide path on yours, I'm delighted to see that your plan is working out so well.

 

[Senator]

I feel like we will eventually have a property portfolio big enough to accomplish this. Was that 1031 from MN to FL more difficult across state lines?

It made no difference switching states. Except the transportation, which was then added to the basis of the property. I left about two hours after the closing. I had some title issues on my property, and we scrambled to get them fixed the day of close.

The only thing that could have happened on the 1031 is that the initial purchase falls through. Then you are limited in time, and a distance away.

Next time, maybe a reverse 1031. Buy first, then sell.

 

[Senator]

I remember eagerly following your ER countdown three years ago. It convinced me to stop lurking and join the forum.

Now that I've modeled many aspects of my own glide path on yours, I'm delighted to see that your plan is working out so well.

Thank you!

My exit date was planned pretty good I thought. Maximizing the W2 wages. I often have a different way of looking at things, and think more outside the box. Especially in real estate and tax issues. It generally works, although not always.

 

[FI_by_2023]

Thanks for the insight. I appreciate it very much and glad to see you posting an update.