Mid-Life Retirements Cost But What You Learn Along The Way Is Priceless: Here Are The Final Costs O

The financial cost of a mid-life retirement has been what many people want to know.  Most people don't want to pry into money matters and dance around asking us bluntly.  "How are you doing that?" or " What is your job?" are the common questions.  I knew these questions would need answers since that is what I would want to better understand before taking such a leap.  I knew that in order to bring myself to better understand the financial impact of retirement then I would need to track it closely this year.  I have always planned and budgeted to some degree, but never have I given myself a detailed snapshot of my personal expenses like this year.  It has taught me two things.   Budgets are extremely educational and more usually than not are designed more conservatively than the final outcome. Both happened to us this year. We set out on this journey with some knowledge of the financial impact of retirement and a conservative flexible budget of $36,000 to $75,000. We thought we gave ourselves a lot of room to hit the target.  We overshot and here is the education we gained in the process. After spending the first six months staying in the RV and spending $48,028, we spent the last six months traveling abroad for half of the time period and increased our second half six-month spend to a total of $63,020.  This leaves us with a grand total spent last year at $111,048.  I conclude that a first year in retirement is no doubt a more expensive year than you plan to spend throughout retirement especially if your goals are to hit the road and travel extensively.  In my experience of financial advising that is what most new retirees dream of accomplishing.  The clarification should be made that of the grand total of $111k only $10,764 of it were fixed monthly expenses.  These were expenses like car insurance, RV Insurance and our phone bills. Anything that we had reoccuring every month regardless of what we did.  We did not have health insurance all year and all four of us have been fortunate to stay out of a hospital or Dr's office and avoid costly medical bills.  This was a good bet that we took and it saved us, by our early calculation of premium quotes, approximately $23k.  A retiree at 67 years old won't take the increase in odds of needing insurance to make that bet, so we are counting this as another great reason to take a mid-life retirement and travel extensively when you are young as opposed to traditional retirement age.  That leaves our variable expense grand total at $100,284. The variable expenses were broken down broadly but tracking them brought some themes to the surface.  One is having kids made a mid-life retirement expensive in the food category.  This is the deepest impact the kids made financially, but we would have spent close to the same money back at home regardless.  A traditional retiree won't have that expense.  We spent a total of $19,389 on food, a fifth of our variable expenses only to be outdone by Lodging which came to a total of $20,063.  Lodging would have been the same regardless of kids. Instead of a five-star hotel that we splurged on at EuroDisney, a traditional retiree would be at a five-star couple's only resort at the same price point.  The Lodging line-item total does not include our purchase of the Thousand Trails RV club membership which cost us a one time fixed expense of $2400, but it does include our annual dues of $575 a year.  The $2400 was included in the fixed expenses category. Here is a run down of the remaining variable expenses: Cash spent was $7,304.  We did not track exactly how cash was spent. It was mostly spent on foreign transactions like food, souveniers and activities because ATM transaction fees and foreign exchange fees were free for us with our bank account. Our credit card was not. People in other countries like cash so it made our bartering stronger.  In our final five weeks of travel, Erica operated in cash since all of her credit cards were stolen with her wallet. Gas was a total of $7,453.  It was much cheaper for the six months we lived on the East Coast at an average of $2.45 a gallon, but brought us back to reality on our first fill-up in California on our way home at $4.55 a gallon.  We drove 15,015 miles in the RV on that gas and another 5,230 miles in our car for a grand total of 20,245 miles racked up on our vehicles.  This mileage doesn't include our car rentals, which we had for over two months, but the gas that we purchased for car rentals is included in this line-item. Consumables totaled $12,081and included everything from clothing to toiletries and Goodwill treasures to the kid's toys for birthdays and Christmas.  Pretty much anything we spent at a thrift shop or department store went into this category.  The kids impacted this category well as they grew out of clothes fast and it is fair to say that a traditional retiree might not care to shop like we did, or they might be far worse! The biggest expense in this category was the art pieces we purchased to decorate our future home.  They took up nearly half of this expense. Propane expense was $321 and RV Maintenance expense was $4,206.  These two categories are the cost of owning a home and are comparable to the expenses one might have during an average year owning a 14 year old home.  We have maintained the RV very well and look forward to recouping some of this expense when we sell it.  A traditional retiree should expect similar home improvement expenses. $6,917 spent on souveniers is eye-opening considering a lot of what we are left with is the little magnets I collected and the patches we purchased for each of the kids.  I wish I wouldn't have started down this crazy path but once we were on it I wasn't backing off it and found myself going to the farthest reaches to score cool patches and magnets.  This expense also looks extremely high when you consider our total expense for activities was only $9,116. When you consider all that we did which included seven days at Disney theme parks, this expense stayed low due to our use of National Parks and Monuments as entertainment. In my opinion, these places are far better than any man made attraction in value and educational content. We also made great use of city passes and coupons that allowed us to create package deals to attractions. Car Rental expense came in at $2491 which was somewhat unexpected since we had a vehicle.  We decided renting a car for the month of December, after Erica was hit and our CRV totaled, for around $500 was better then purchasing a car quickly and then storing it for the three months we were abroad. Another big expense was the cost of insuring our car rental in Costa Rica.  They forced us to purchase minimum coverage for the month we were there which totaled $823. When you compare the car rental expense with our public transportation costs of $1,882, you get a since of the cost of convenience. The public transportation includes all Uber Rides, especially the entire month in Brazil and all subway commutes throughout our month in Europe.  We also used taxi and subway in New York as well. Airfare totaled $6,942 and considering how many airmiles we traveled. I should have tracked it. With four full priced tickets round-trip to Costa Rica, Brazil, France and England we feel good about this total.  Erica also took a round trip from Ft.Lauderdale to San Diego and I took a round trip from San Jose, Costa Rica to Chicago in this total. The remaining variable expenses were Parking at $358, Gifts at $369, Foreign Exchange Fees at $200, Visa's at $1029 and Postage at $162. The question I keep asking myself is; if I had another $100,000 to do anything with would I spend it on a trip like this one?  When you consider the fact that we have traveled to more places than some people go in a lifetime which includes thirty-nine U.S. states, six provinces of Canada, another five countries on three different continents and an entire year of living...the answer is yes!  Not everyone would make the same choice and that is what I have come to think differently about through this experience.  Travel affects everyone differently and I saw this play out on my three traveling companions as they at times tired of the travel much more quickly than I did.  I eventually hit that wall too though which surprised me. I have hit a lot of my bucket list along the way, all of it documented here in the blog, and I feel really satisfied and proud of this goal accomplishment.  What is less tangible than the places ventured are the people we have met along our journey and the cultures we have lived in that have educated us and brought us to better understand the world we live in.  All of that is priceless to me.  I will always have this experience to share with others to hopefully inspire them to follow their dreams. 

Peace and Love