Q&A from a Reader
Hello Billy and Akaisha,
My husband and I are both 56 years old, and have been planning that we’d spend our retirement in a similar way to you.
We figured that by the time we were 60 we would be able to afford to do it quite comfortably, but yesterday my husband came home with the news that he’s about to be laid off, and we immediately began to wonder whether we could afford to retire now.
We have a daughter getting married in July, and have already committed financially to that, so we’re already a bit behind! I guess we’re just very nervous, and a bit panicked at the moment about the idea of “giving it all up.” We have homes in California (we still have a mortgage on), and Scotland (we’re from Scotland), which our oldest daughter rents from us, and of course we have some investments, but I think more than anything it’s the decision to jump!!
We haven’t looked in depth about how to begin or where to go. I do have your book, and it’s certainly helped, but you are seasoned travelers now, you make it look easy! We also own a cat and a dog which may not help when it comes to traveling?
I guess I’m just looking for advice on where to begin? A simple question which could help us to change our lives.
Wow! a lot going on for you and your husband. Thank you for taking the time to write and for sharing your story with us.
Probably the first thing to do is to take a deeeep breath and relax so that your minds can clear. When things are swirling around inside your head it’s harder to see what’s available or where to go first.
Do you know your Average Cost per Day or your Average yearly spending? These are good places to start from the point of view that this will tell you what amount you need to cover for your annual expenses from your investments and — if the number is “too high” — where to start to cut back or replace with another option.
I guess the next place to go would be to look at your housing costs. (Remember, the highest financial output in any household is housing, transportation, taxes and food.) Do you want to keep two homes? Do you want to rent out the one in California while you travel? You might need to have a manager to run your property in case something comes up that needs to be repaired or replaced. If you can afford to live in your California home and keep up the mortgage, you might consider joining a house sitting service and have a house and pet sitter stay in your place while you travel and/or utilize another house sit for the lodging expenses when you yourselves travel to another location. In this way you could keep your pets and know they are being cared for while you are gone and you won’t have kennel expenses.
Or you could choose to rent a room out in your home with the understanding that this renter would watch over your pets and keep the house together while you are gone.
Or you could downsize… Or move to an Active Adult Community where the lifestyle fees cover most everything you might need – Not your utilities and internet of course, but you would have entertainment, a social life, and the cost of maintaining a home in one of these places is far more affordable than owning a brick and mortar home and having to take care of all the maintenance yourself and pay property taxes. Insurance is more affordable as well.
Take a look at our Housing Alternative page which could give you some ideas. There are walkable cities and places where you could go car-free, for instance, cutting back on the 2nd highest expense in a household. Or you might pare down to owning only one car — unless you travel as a lifestyle, then you wouldn’t need a car at all. Let me know if you would like some ideas about being car free.
Have you considered what sort of lifestyle you might like in retirement? You mentioned a traveling lifestyle — would that be “full time” or coming and going, having an apartment or smaller home to return to?
We know of people who rent a studio apartment type of home base from which they travel half of the year. We also know of people who have a manufactured home or park model where the housing costs are very affordable, and it is from there that they travel. If you are traveling as a lifestyle, you might consider a combination of house sitting and renting an apartment or living out of a nice apart hotel.
It is our experience in many foreign countries that public transport is very available and there isn’t the need for a car. If you live out in the country, perhaps a motor bike might suffice, or call a taxi – which again is very affordable in countries such as Thailand, Mexico, and Guatemala.
I would imagine that if you start here in the places I have suggested, that there would be another set of questions that could come up and we could go from there. Also, if you clarified these places in your retirement plan, you would get a handle on where you might want to go from there.
Please feel free to write again if you have other questions.
Life can shake us up sometimes and it can be unsettling. However, you have succeeded in your life up to this point, have faith that you can manage this change as well.
Wishing you all the best for a wonderful future.