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Retiring on a Sailboat A discussion

Thoughts, advice, and encouragement: retiring on a sailboat (Garry)
I’m asking for your thoughts, advice, or encouragement about retiring on a sailboat. For various reasons, my retirement funds are very limited. My early dissatisfaction with the 40 hour engineering career led to a period of bumming around out West in my pickup. I went back to work as a contract engineer and decided to save toward a cruising boat. Eventually, I completed Rosebud (28’) from a hull and deck kit. I lived and cruised on her for three years (1985 to 1988) in the Keys and Bahamas before running out of money.
Returning to the engineering world, I sold Rosebud with the goal of getting a larger boat. A decision to start a remodeling business, however, kept me sidetracked for ten years of unprofitable struggle. Having again returned to engineering, I recently purchased a solid Allied Princess 36, renamed ‘Rosita’. I hope to have her paid off, fixed up, and save a small cruising kitty within the next few years. My goal is to cruise the Caribbean and Gulf of Mexico.
I am 54 years old and have always had excellent health. However, when I notice occasional aching joints or back-pain, it reinforces my desire to get cruising soon. With no family except two distant brothers, I am willing to accept the risk of going without insurance. I have about $50,000 in IRAs which I would try to keep in reserve. And there will hopefully be a little something coming from Social Security. With technical skills and working toward a six-pack license, I will be able to pick up occasional work to help feed the cruising kitty.
I know there are some big “what ifs” that I am ignoring. What if I get sick or injured? What if I lose the boat or have some other financial setback? I will probably be able to come back to engineering again if necessary. As a contract engineer in the nuclear power field, I should remain employable because there is a limited pool of experienced people in this field. Otherwise, I am not willing to spend much more time in harness to satisfy the “what ifs”. I am willing to take what comes “out there.”
I welcome your thoughts. What are your plans?
Thanks, Garry

I think it depends on what you "need" (Jeff G.)
As long as your needs are simple, you should be able to get by on very little money. If you plan on spending your nights tied to a dock, you will need a lot of money. I think much of it is a mental state. If you don't have a lot of money and it's always on your mind you will not be happy. If it doesn't bother you not having money you should be fine--as long as the needs of the boat have been covered.

Would you do it again? (AlanB)
Sounds like the financial ride has been pretty bumpy for the past 20 years or so. Lots of people get frustrated with their primary careers. Of these, only a few actually do anything about it. The rest just hang on and get their fun when work allows.
Looking back, was it worth it? Or have the financial difficulties been more of a problem than you anticipated? This is a fundamental issue for many who dream of going cruising. I'm sure we would be interested in how it is on the outside of the corporate "8-5" world. (Notice the hours are in quotes).

Budget your operating costs 9Russell)
Many sailors hide from themselves the actual costs of operating a sailboat, as a recent thread here demonstrates. More generally, people hide from themselves what their actual ongoing expenses are. If you hope to go some period of time without a cash crunch, nothing substitutes for making a good budget of your operating costs. That is the essential first step.
Make sure to include, for the boat, slip and anchorage fees, bottom paint, rigging renewal, fuel and oil, engine repair, sail repair or replacement, outboard repair or replacement, monthly estimate for small items like soap, tape, twine, bulbs, batteries, and wire, propane or other cooking fuel, pumpouts and water (which are free some places, but not others), charts, pilots, and books, etc. Make sure to include for yourself not just regular expenses like groceries, clothing, entertainment, liquor, medicines, and household items, but also some allowance for occassional expenses, such as eyeglasses, plane fares, and wedding gifts.
Put this all into a spreadsheet. Tally up the total, on a monthly basis. Amortize your kitty, with a reasonable interest rate, against this monthly expense. Then you'll know how long you can go.
Basic engineering, right?

Go For it (ncdd)
It sounds like a solid plan. Your conditions match mine pretty close. About the same age and plans. Except we will be on a catamaran and I am married. I have been told and read that it takes approx. 1k per month on average to live on a boat. That would be a comfortable budget. Some people say less some people say more. Maybe we will get some input from the liveaboards and cruisers as to what there sailing budget consists of! I can relate to the aches and pains and needing to get out of corporate America

Speaking from experience, I can tell you the "aching joints or back-pain" are not going to get better with time (Duane - Cat's Meow)

Personally I think you can live on a lot les than many people say... (Todd D)
It just takes simple tastes. However, until social security kicks in it seems to me you are going to be either working or living on capital. The current low interest rate fiscal policy is playing havoc with lots of people's retirement plans and incomes. It will get better, but not for a few years. Right now 4% is a pretty good return. Unfortunately you currently need about $300K to generate that $1,000 per month income level you mentioned. Working a bit now and then will certainly help, particularly if you can command a better hourly rate than is typically available to transients.
The above said, I quit my job 3 years ago and don't really miss it. We are now getting by quite comfortably on a lot less that we did when we were both working. You just have to cut out the expensive frills that may have been in your life style. The most important thing to do is eliminate all debt. Payments of any kind will really hurt if you are on a limited budget.

Yes. I can't imagine myself working a "career" (Garry)
My biggest regret is falling for the "entrepreneur, owning my own business" line. Sure, you hear about the successful ones. I managed to struggle on with no major problems but no significant savings either. I could have been cruising comfortably by now if I had stayed with a job.
Fortunately, I work as a contract engineer in the nuclear power field. Kind of like a hired gunslinger. So, it’s less like a corporate career. Also, there has been fairly consistent work, unlike the contract engineers in the digital fields.

Budgets and Pied Piper III (Garry)
You are right. Budgeting and planning make sense. And I will probably try to do that. But I seem to be more of a Go For It type that doesn't want to think about the consequences.
I built a Pied Piper 28 Mk III from Liberty Yachts just outside of Wilmington, NC (not the Liberty Yachts from Florida). Great boat. A lot like the Cape Dory 28. I also had a hand in the design of the deck for the MK III version.
Had a great experience finishing Rosebud out and would love to do it again. But the time and expense can't compete with what is available on the used market.

Do like Butch and Sundance... (Anonymous Coward)
... head for República de Bolivia:
Temperatures in Bolivia range from the mid 60s to the low 80s, with the average being in the mid 70s. Even the hottest days are always tempered by cooling breezes.
Bolivia is a republic with a presidential system of government. Its fully democratic, American style system retains the respect of individual rights and freedoms.
Bolivia enjoys a remarkably low crime rate, with violent crime being virtually unknown and theft not commonplace.
A 2-bedroom, brand new handicap-accessible (those aching joints and back) home in a charming expatriate development with a private pond and palm tress for only $28,000. Groceries are up to 70% cheaper than in the United States or Europe. A routine trip to a good English-speaking doctor will set you back no more than $20. You can take in an American movie for only $2 or get a taxi across town for as little as 80 cents. And you're certainly not going to have high utility bills: Electricity and heating costs average $15 a month.
Become fluent in spanish and with a practical engineering background, you'd have a good chance of picking up work in Santa Cruz.

Only problem is it's landlocked :.( (Miles)

Maybe I'm just conservative, but... (Julio)
I applaud your thinking about going while you can, but it seems like you are close to the edge on the financial side.
Call me a stick in the mud... While I think you could live simply and be OK if you plan properly, I would be concerned about having enough available savings for "un-planned" expenses.
You mentioned that you would forgo having boat insurance, but do you have medical insurance? While you are pretty healthy so far, you have recognized that you are getting older and may need more medical services than you did 10 years earlier. Heck, today even a simple doctor or dentist's visit would be a big expense on a limited budget.
I'm not saying you shouldn't do go cruising, but you might consider doing some limited coastal cruising while working a just little longer to add some contingency funds to your cruising kitty. The experience gained coastal cruising would also help you find out what changes you need to make to the boat prior to your extended cruising.
Fair Winds,

what ifs (Jerry Levy)
"of all the sad words of tongue and pen, the saddest of these is 'it could have been'." "What if" you don't go and later in life are unable to go and, on your nursing home bed, remember the above quote? You have the experience, a boat, and some savings -- what the x$%& more do you need?


Recent experience (Jerald King)
I retired from the systems management consulting field in Jun 2000, age 52, and have been cruising full time, mostly in Western Mexico since July 2001.
We live a very comfortable lifestyle on less than $2000 per month. About $300 of that is boat and health insurance and about $300 is boat maintenance (bottom paint, new batteries, repairs, etc). We have to spend $171 a month on a large storage unit in the States for the stuff we just couldn't get rid of.
So our operating expenses are less than $1200 per month for two of us, including trips back to the US.
Other folks in the Sea of Cortez cruise on way less than $1000 a month, but it is hard to tell because you don't know what they include in their budgets. I keep very detailed records.
I could NEVER go back to work on a regular basis. Once you get into the rhythm of cruising and retirement you'll find that you never really knew how to relax until you got out on the water full time with no work-a-day worries.
However, you have to adopt an attitude that is basically "I will enjoy this life and I will deal with problems as they come along, I will not worry about the future I can not control, and I will live for the moment."
Write me directly if you want to talk more - I went thru the same doubts and concerns in the years just before I retired.
My WEB pages contain many articles about what it took to adjust to the retire cruising life.

If you don't mind my asking, Jerald... (Gail)
Where can you get health insurance for $300/month? Are you lucky enough to get that through a former employer, working spouse, retired military? High deductible catastrophic policy? Or is there some great deal out there?
I really want to retire while I'm still young enough to enjoy it, but health insurance is the one uncertainty I have not been able to get my arms around.

Health Insurance (Jan)
I have health insurance for less than $300/month. It's through Blue Cross/Anthem & it's an individual policy because I'm self employed.
The policy isn't great, but it covers my 20 year old student daughter & me. It's got a deductible of $2,500 per person & out of pocket limit of $4,500 per person. It also has Physician Office visits for $25, RX for $15-$30 in network. My two docs are in the network. I guess it could be classified as somewhat catastrophic.... but it works for us.
Traveling out of the country will be a different situation & we haven't gotten that far in our research ... yet.
Fair winds -- Jan

Bonds yield 5-6.75% (Jack)

Think of what you want and need! (kirk)
If just sailing and relaxing is your goal then pass up hanging around $$$ resorts or bare-boat areas. You will be surprised as to how little you need if you are in the 'right' spot and doing what you like! There are a grat many good places to live on your boat and lay back! Cartagena, Colombia is one of them! Luck! Kirk

Retiring - put cash in an envelop each month (Mike McN)
We left at age 55 (me) and 52 (admiral). Stayed out 2 years until 1st grandchild ruined plans. I have a military retirement. We are boomerang parents. We live with the kids. I am an aerospace consultant and got rehired by my old company. The admiral became a full time granny nanny. We leave again in fall 2004 (unless another grandchild pops out). Some thoughts The Budget - $1000 a month, cash, put in envelope. This was for food, fuel, minor repairs, mooring or dock fees, entertainment, clothes, car rental, laundry, etc. What was left over went into FUN Envelope. We barely drink alcohol and don't smoke. Most months we had extra cash. We did not use credit cards. We cruised from the Bahamas to Canada. We could have lived on less (admiral still likes to shop). Budget did not include major repairs (had none), insurance (health/boat), trips home. Have no debts. HEALTH - you never know what will happen. I developed a minor heart problem at 54. Health Care - the Bahamas (Abacos) were reasonable. I had to have some weekly blood work for a month. DENTAL - if you have dental insurance now, consult with your dentist. Fix anything and everything before you go. We didn't see a dentist for 2 years and when we came back didn't have more than a cleaning. We had a five year plan with our dentist (2 crowns a year). Good luck. Selling the house and the cars and disappearing was the greatest decision we ever made. Coming home to the Granchild is also neat but the water still calls.

are you his enemy? (D. Pons)
Bolivia is the only country in America(*) without access to the sea :-) I don't thing sailing Lake Titicaca will make out for it.
Besides, is not as peaceful as you suggest: not too long ago there was big confrontation between coca growers (a traditional crop there, not always for drugs) and the police/army.
(*) America is a continent, for the geography-deficient.

Bonds (ncdd)
If you are getting that kind of return now you are doing REAL good

This is similar to what I will be getting when we leave. (staceyneil)
Neil and Olivia will carry the much cheaper "major medical" type travellors insurance, but I have my breast cancer history so I can't get covered with that. My policy is also with Anthem BC/BS and it'll be about $400 per month. I need regular mammograms and checkups with oncologists so I need a bit more coverage. I will have to come back to the States if I want to be covered to the fullest degree. We have budgeted a "medical travel" portion to cover this.
Still, it is the largest single item in our cruising budget!!

...nothing so liberalizes a man and expands the kindly instincts that nature put in him as travel and contact with many(ncdd)

My grandfather-in-law retired and took his retirement in a lump sum... (Dave Gibson)
instead of in payments for the rest of his life. He gambled that he wouldn't live that long, and he lost. I don't know what the size of his nest egg was, but he didn't factor in inflation, and the poor guy lived to be 89.
Those of us with our own 401k retirement plans and such have to be concerned with increasing the value of the plan for the lenth of the rest of our lives. We may live another 30 or 40 years after we stop earning wages.
With the economy the way it is, I'll probably have to work until I die, and with my luck I'll live to be 100. :o>

Sure, junk bonds, not anything with a guarantee (Todd D)
I like an investment where I can't lose. You sure aren't going to get 6.75% on that kind of investment now.

I have Anthem (RebinVa)
at work, I believe they have a provision for out of country coverage.

(Bret King)
If you want that stick with Government bonds. I went with junk bonds and stock and am able to make it. No way with Govt. bonds.

Health Insurance was $175 per month (Jerald King)
thru Blue Water Insurance. The policy name was Optimus (I think). That was a very complete policy that included no limit air-evac insurance back to Florida for both my wife and I, no matter who was hurt. It included a month of hotel rooms for the non-injured spouse while the hospitalized spouse was being treated.
We did have a $5,000 deductible but the upper limits were several million for each of us.
When we got the policy in Oct '01 I was 54 / non-smoker / no health problems and my wife was 46 / non-smoker no health problems.
We had to be OUTSIDE the US for six months a year to qualify for the policy. But, it did provide coverage while in the US.
The boat insurance was about $150 per month for coverage from Acapulco to Neah Bay Washington, no more than 100 miles offshore.

Go! Now! Do you hear that ?...tick,....tick.....tick. That's time (PaulM)
passing. You will NOT get healthier. You will NOT get richer. Your boat is NOT improving with age.
If you've already cruised for three years in the Keys and Bahamas, you already know those costs. Down island is much cheaper living.
I say go,go,go!

Dependents, or lack thereof (Padeen)
With no dependents, it seems unreasonable to limit your dreams, assuming you are willing to take the risks, i.e., limited health, boat, life, or nursing home insurance. You lose, and you're back where you would be anyway; on medicare in a "home". Or you fall overboard. You win, and you have what (you think) you want!
With dependent(s) you're still ahead if you develop the lifestyle of your dreams. You provide the space for them to understand that life is more than 40 hr. work weeks and mortgage payments; commuter traffic and other people's expectations. Bring them aboard and show them what life is like without TV, dress codes and MacDonalds. Of course they'll likely mutiny, but you've done your job: providing them with a picture of your highest aspirations. They'll always remember that, and may likely return when you're gone.
Of course, there's the inevitability of age, when you're too stiff, sore, lame, out of breath, weak, helpless, or infirm to run your boat. I don't have an answer for this, except maybe to jump overboard, rather than except the confinement of land and loss of independence.
May we never admit the obvious.
Padeen, who has a 24 yo who he's dying to introduce to a cruising life.

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hemorrhoids12-Oct-2015 03:32
I love your story

Michael 07-Jul-2008 09:15
Wow. You guys talking investments really ought to consider talking to a competent financial advisor. You CAN get that kind of interest in investment grade bonds (not junk). All bonds generally have guaranteed interest and guaranteed return of principal, but the quality of the guarantee is key. Also, even with guarantees, market conditions may make a bond worth more or less than what you paid for it.
Tom Allen 09-Jul-2006 15:02
Gary, I lived on my sailboat for three years in Samana, Dominican Republic at the age of 50. It dawned on me after constantly doing repairs, having things stolen from time to time and worrying about leaving the boat for a few weeks to return to the US that what I really wanted was just to live simply. For less money and far more fun I could have just rented a little place in this beautiful small town and just "hung out" applying my energy into more artistic endeavors. Escaping from the rat race and living simply is definately the thing to do but you still get hampered from really being free by a possesion (a boat). I am now 63 and with a $1500 social security income I am going somewhere, not sure where yet, and just live the life. If I really need to sail there are all sorts of cruisers coming in and out looking for temporary crew. Just a thought...I understand about the love of boats however and will be a little sad when I sell my 44' Cheoy Lee. Happy trails and do not worry too much.
ERS 26-Jul-2005 01:46
Kudos and well done. Maybe I'm niave, but few people I know are so willing to strike out as you have. I mean strike out (no pun intended) in the sense that you are eager to experience life rather than settle to make it through. You know my situation, I've got a wife and two girls who have no concept of the life you speak of living. Although tempting, it would be almost inconceivable to incite a rational discussion with them about the merits of considering a life on a boat. Having worked with you for three years, my gut tells me that your gut knows the answer. Take a couple few years at DC and hit the waves. Just be sure to keep in touch so the wife and kids and I can meet you for a day sail.
Garry21-Jul-2005 15:59
Wow! Sounds like you have got it together. Makes me a little sad for myself. But then, I just have to start from where I am. Good luck to you, Garry
JPH NP 18-Jun-2005 11:22
Plan for us: We are two NP's (Nurse Practitioners) so, luckily, obtaining employment is not an issue for the last mate (frau) and me. I am 41, she 46. I seem to be the antithesis of Garry and pray that we will get to go before some illness befalls us (go to the funeral of a 53 year old friend this morning). I am the delayed-gratification poster child. I have been doing nothing but work (longest time off from work since age 15 was 19 days). I am NOT a workaholic and I do not derive my identity from my work. What I have done is save money like a miserly pack rat. I have saved and invested 25% of everything I have ever earned in my entire life. This has meant going without sometimes, but I invested in myself with advanced degree, progression of improving jobs, worked two jobs for about 10 years, to continue to save for a self-funded early retirement. I get no pension. No retirement pay from anyone. I am almost there. In retrospect it would have been smarter to work for the public sector, done 30 years, and earned a government retirement because of the offset of pay would have been less than 25% over all those years.
We have figured a 3,000/month extremely detailed budget that we think is real and right. Would be much less in Bolivia, more in the Med. Health and boat insurance are big ticket items, but if Anthem/BCBS is as cheap as some of the posts suggest, that will free up a lot of budget.
Basic plan is to accept a 3 month contract, put ALL those earnings from two of us into deferred comp., take a month off to see family, do another 3 months to stock the kitty, then go cruising for 5 months. We plan to stick to this cycle for 10 years, on the boat, or flying to the boat as case may be. Then at age 55 (wife 60) we can go full time, indexed for inflation, from the yield of conservative investments, inpertuity.
We are now shopping for the boat. We could afford a new Island Packet, but then we couldn't go cruising, so like everything else, I am being a conservative shopper and am looking for a solid fiberglass, already equipped boat for less than $100K. We've been to RI, CA, and MD twice looking for said boat without pulling the trigger yet.
Guest 10-May-2005 06:58
Hope you are in good health, doing well, and still sailing. Enjoyed your website. Found it researching Pied Piper sailboat