It’s All About the Travel – Cost to Equip a Rig

It would seem to be common sense that one should know there are additional costs beyond just buying a trailer and truck as part of a new full time RV lifestyle. I had not actually written down a specific list of additional equipment costs until now. A long time ago I simply came up with a budget based on how much of our net worth we would be willing to spend on a rig, guessing we might use it for six years. That became the budget.

I had little to no real idea which trailer and truck we wanted and therefore what the true cost would be. Heck, I didn’t learn what the dealerships were referring to as a “price point” until well into my research. Of course, the “budget” should have quickly become more of a limiting and necessary factor as Karen and I began to tour trailers and learned what the anticipated discount off the listed price might be.

I should go ahead and apologize for the sarcasm that you are about to read. It has a point in that it demonstrates how I can become ridiculous in my quest to find a simple trailer and truck.  I’m also not intending to criticize anyone that has the means to purchase whatever rig they want. And hope I don’t loose any readers over this one as I depend upon your comments and suggestions. I am hoping this post helps others in a similar position come closer to selecting their own rig.

Luckily it did not take but a few hours at an RV show to know a big Newmar diesel pusher was not in our future. Internet searches taught me there were specific categories of fifth wheel trailers lumped together within any one manufacturers list of products. In our case this category was the luxury full profile trailers. Simply put, these are the ones that are nearly 13′ tall in the front. Examples being perhaps the Heartland series to include the Big Country, Bighorn and Landmark.  Or the Keystone Montana and Alpine. The choices for a new trailer are overwhelming. Especially if one throws in the idea used trailers from several higher price points might be within a budget. So I kept them on one large list within this blog site thinking I’d eventually know the pros and cons of each trailer.

For some sadistic reason, I also decided to learn about all the nice options one could add to a trailer, pushing the base model into a higher price point.  I had to go out and read a dozen blogs about what others had added to their campers, sometimes a short time after buying the trailer. Such as a MorRyde independent suspension, heavier axles, H rated tires, full body paint jobs and disc brakes. What to do? I guessed just check them all out and see how much the stuff, I mean excellent equipment, costs added at the time of initial purchase. And then dream as if the budget could be increased to a magical level. As if my pension and savings would grow to the necessary level by the time I retired six years early.  Hmm – that seems reasonable…. for about 10 minutes when you think about it.  At least that mindset took less time to flush out of the decision process compared to the “let’s spend more of our savings now on a depreciating asset and buy a shed to live in later.”

Then a voice came out of heaven (actually from a blog follower’s comment). That comment was “it’s all about the travel” and not the trailer. Thanks Ingrid! I have thought about that comment for many months and it truly helped. I should have included the concept from day one when the initial budget was created.  To me “it’s all about the travel” includes a long definition. Among which at the very least might be the trailer and truck get you from point A to point B so you can enjoy the scenery. Intuitively we all know a new car, boat and RV will someday loose its luster and become just another object to get rid of or replace. Just like the homes many of us are now downsizing and selling off.

All this being said, for us we still don’t want to take the fun out of travel by moving into a new home we will not enjoy. Or worst yet, perhaps be the deciding factor why we give up the lifestyle. I’ve owned a popup camper and there is no way that would work for us. Nor do I have any dreams of quickly mastering backing into a spot with a 45’ trailer towed by a Volvo semi truck after avoiding the trees, vehicles and other objects next to the campground roadway.

I was thinking it would someday be nice to go back to a few ideas mentioned in prior blog posts and let the reader know if the idea or plan worked once we had been on the road for a period of time. I think I can attempt that now even without having spent a day in our future fifth wheel. At least when it comes to developing a truck and trailer budget. And I might add I am taking to heart and very much appreciate all the great advice I’ve learned from experienced travelers . There are so many ways to travel in an RV and all methods offer great points of reference.

I think I did it right in September of 2014 when I dusted off the old financial plan for retirement and brought it up to date. Also later when I took an inventory of financial assets at the time and future in the case of investments. I’ve got a fairly good idea of what will be our net worth at the time of retirement. Karen and I have discussed ad nauseam what our expectations will be for purchasing a home once we come off the road and how much cash to hold back for that. It’s not fun for Karen but is amusing to me that some of the conversations include her telling me we already talked about that three times. Someday I’ll be able to tell her “don’t you remember we talked about that three times” should there be a flaw in the plan. I do like it when she suggests we may not need to worry about a new place to live beyond buying a new trailer to continue the journey. I however like plan B’s that allow us to change course 180 degrees if necessary.

I’ll get to the point now.  And that is I should have taken the time to come up with a close list of extra costs to equip a trailer and truck rather than just assuming it would fit in the budget. Because that would have helped narrow the selection of a rig even further. Admittedly, much of these costs would be learned perhaps after finding them on someone’s blog, an article or through my own study. Others appeared to have figured out the real costs rather quickly, having bought their rig in a matter of months.

I’ve been compiling lists on pages in this blog as I learned about equipment others are purchasing for their trucks and trailers over years of travel. I’ll never have those lists complete with every possible item to choose from. In about four hours I wrapped that research up using a large Camping World catalog. And had fun dreaming about all the cool junk, I mean important equipment, one might need that was not already on the list.  I then took 30 minutes to go to my States Department of Motor Vehicles website to get an idea on what the taxes and fees would be to register a new to us rig.

I don’t have this perfectly worked out and don’t intend to even attempt that. But I’m assuming we will spend 5.25% for State and local taxes on the truck and trailer purchase which could be in the neighborhood of $5,400.

For equipping the new truck and the trailer that could start out as low as maybe $2,517 to drive it off the lot and plug it into full hookups at a campsite. This includes a fancy fifth wheel hitch. But more likely we will want to spend about $6,367 on new equipment initially to include more costly items Karen and I have talked about, apparently during at least three individual conversations.

Yup, I did a spreadsheet with all those items listed using the catalog price, my notes or taking an educated guess.  If I’ve linked it correctly you can look at it here: Items to Purchase

I went a step further and ranked each item in order of priority based on what we might purchase at the start and at various increments.  In total that list came out to $25,308 if one was to add all the previous mentioned upgrades, solar, built-in surge protection, a truck bed cover and much less expensive items.  You can look at the list for ideas. I could see us spending up to $9,775 in the first year or two of ownership to equip the trailer and truck on top of the $5,400 to license it. That’s a $15,000 bite out of what we have decided to be our rig budget. That pushes several trailers out of our budget by price point.  To include many if bought used that I’d want to own.

I do want to make one very important point that I learned from those more experienced than myself.  For the most part, we will do our best not to purchase any of these non-essential items until we have lived in our trailer for a period of time. Yes, we did buy an inflatable boat and use it now. Karen has an Instant Pot and uses it now. I guess I must also admit we bought a $15 grill top and a new light on a camping trip. But I did pass on the 50% off Weber Q 1200 grill at Walmart.  Bet I’ll regret that one.

It has been fun researching and dreaming because I had the past three years to do it. Kind of my right now RV fix I suppose. But realistically, deep down it surely must become all about the travel rather than the junk we will someday want to sell off. Especially for most of us who are on a budget. And for those who are not on a budget, it might be safe to assume they already bought their rig and spent the $25,000 for extra stuff. And it’s all been parked in their driveway at home for at least the past six months. For me, I’ve been there, done that and have a motorcycle to sell to prove it.

Thanks for reading and commenting. I hope you found this post amusing yet beneficial.

 

R.I.P Officer Gary Michael of the Clinton Missouri Police. Last call August 6, 2017.

Additional Health Care Planning

This will be the last of three blog posts concerning health care. I just completed truck research and will get that posted soon.  I’ve come up with a short list of trucks I’m interested in as well as an idea of how we intend to purchase one and when. 

On the home front, Karen now has an Instant Pot and loves it.  Three people at work also bought one and we all plan to share recipes. Karen made the best spaghetti she has ever made, browning the meat, putting in the sauce and noodles without dirtying any other dishes. And the chicken wings she cooked up were as good as any restaurant. 

 

Now on to health care.  I want to mention a few notes about legislature that’s in the works as well as a seldom known way to fund a Health Savings Account if you have a high deductible health insurance plan.

In an earlier post I mentioned how a co-worker uses a doctor who does not except insurance. His doctor is following this blog. On Dr. Rigg’s website there is a link to the Primary Care Enhancement Act of 2017 as well as a host of information concerning health care reform.

Per congress.gov  “this bill will permit an individual to pay primary care service arrangement costs from a health savings account; and allow an eligible taxpayer enrolled in a high-deductible health plan to take a tax deduction for cash paid into a health savings account, even if the taxpayer is simultaneously enrolled in a primary care service arrangement. Under a primary care service arrangement, an individual is provided coverage restricted to primary care services in exchange for a fixed periodic fee or payment for such services. For the purposes of certain tax-deductible expenses for medical care, the bill expands the definition of “medical care” to include periodic provider fees, including: (1) periodic fees paid to a primary care physician for a defined set of medical services or the right to receive medical services on an as-needed basis; and (2) pre-paid primary care services designed to screen for, diagnose, cure, mitigate, treat, or prevent disease and promote wellness.”

If I understand it correctly, this would allow an individual to pay a monthly fee to their doctor who provides primary care services for basic medical needs. And one could make the payments from a tax-exempt Health Savings Account (HSA) which might be a reason it is contested. In other words, this would become a form of health insurance whereby the darn insurance company (and their profits) are taken out of the equation.

Regarding funding a Health Savings Account (HSA): Karen and I are doing this through a plan at work whereby my employer also contributes money. At retirement, I hope to have built the account up. I’ll turn 55 years of age next year and will take advantage of the catch-up rule where I can contribute an additional $1,000 on top of the maximum allowed for a family. I just found out the law allows a once in a lifetime contribution to an HSA from an IRA.  I think this one-time transfer would be rarely used but might be a way to fund an HSA if one does not have the cash during a given year to make a contribution to an HSA. Here are my notes:

One time transfer of IRA money to a HSA account. The once-in-a-lifetime transfer from an IRA to an HSA does not increase the maximum you can transfer is your normal HSA contribution limit. In other words it’s not on top of your normal contribution limit. If you do the transfer, it reduces dollar-for-dollar the amount you can contribute in other ways, either directly or through your employer. The transfer from your IRA to your HSA is not taxable, but you also lose the tax deduction you otherwise would get if you contribute normally. If you do the transfer you must also commit to staying with an HSA-eligible high deductible health plan for 12 months. If you fail the commitment, the transfer becomes taxable and you’d have to pay a 10% penalty. The benefit is that the transferred funds and all earnings thereon could eventually come out tax-free, provided they are used for medical expenses. A qualified transfer from an IRA to HSA once you are on Medicare is not allowed.

• As a side note, government rules allow an investor to distribute IRA funds to pay for medical expenses. The 10% early distribution penalty may be avoided if proceeds are distribution prior to 59½. So you don’t need to move money from an IRA to an HSA to use it for medical expense. However there are special rules such as if you spend out of the IRA that years medical expenses must be at least 10% of your adjusted gross income.
• For 2017 the IRS defined “high deductible” as any deductible higher than $1,300 for an individual or $2,600 for a family, so your health insurance plan has to meet that threshold for you to qualfy for an HSA.
• My HSA has investment options so I would not be losing what the IRA savings would have earned through investment. 

Do your own homework before you decide to transfer money to an HSA from an IRA.

 Here is an interesting web site: Travel Tax.com – from Camper Cornicles blog.

Health Care Research – Direct Medical Care

Just a quick follow up to my last post regarding health care planning. I had mentioned a coworker uses his health savings account (HSA) to pay for medical care with his family of four. His doctor charges a set fee which is believed to be about what an insurance company would have paid the doctor or less.  I met with him briefly for more details.

The doctor’s web page is directmedicalcare.net.  There are two levels of payment depending if your family is a “member” or not. An annual fee is $800 for a couple or $1,200 for a family. Basic doctor’s visits, annual physicals and more are free for members. For non-members a doctor’s visit is $70 for example. And the doctor offers on-line medical care they call “virtual care” at $50 during office hours or $60 after hours. Also, the doctor will met him at the office after hours for care such as if he need stiches at a cost generally lower than an urgent care facility.

I asked my co-worker when he might use his insurance coverage and he said only for major medical issues such as for hospitalizations or referral to a specialist. Under the direct medical care service the doctor’s office does not file insurance claims. You must do that on your own, however the doctor’s office will provide you with the appropriate codes to submit to the insurance company.  I also asked how this affects meeting his annual insurance deductible. He has a high deductible plan and does not worry about it because he does not ever meet the deductible unless his family has a major-medical issue. I’d want to check with the insurance company to see if I could maintain records to show how much I had spent out of pocket or how they are handling services from doctors who except cash payment. Luckily, Karen knows how to file accurate insurance claims.

I could see doing more research in finding a doctor who does not take insurance but charges a lower fee such as this. Perhaps we might find a service in whatever state we decide to domicile in or spend our winters. Then have all the records sent to the new doctor. Or another option might be to switch to a doctor who is near our current home where we intend to later visit family for longer periods. I really am interested in the “virtual visit” portion of the plan. Not only would we not have to subscribe to another service while on the road but our established doctor would have a better idea of our issues before we hit the road, such as the need for prescription medications and more.

I wonder if having an established doctor in the state we select as a domicile will make a difference in establishing a “legal” domicile or not?

This is the first I have ever heard of such as service.  Once I started surfing the internet I found it to be more common than expected. Click on the link for direct medical care and have a look.

Health Care Planning

Thought I would post a few notes about our planning for health care costs.  I also want to say thank you to all the new readers who have signed up to follow this blog lately. It’s good to have you and your ideas so feel free to comment even within the older posts.

Like so many others, I follow Nina’s blog over at Wheelingit. Nina does an amazing job of summarizing current health care options so I’ll leave that to her. We all await future attempts by the US Congress at passing new health care laws. I don’t intend to make political statement so I’ll leave that alone other than to say it does seem reasonable the actual costs associated with health care services must be addressed to get at one root of the problem.  For now, I suppose we must take matters into our own hands based on whatever is available at the time.  So, to that end, I’ll post what I’ve been planning.

Karen and my situation factor in a few “what-ifs” although I don’t like using that phrase when problem solving.

• We plan to move to fulltime RV living when I’m 56 years old. Karen will be a year from Medicare eligibility. She spent most of her career in medical billing which included helping folks out at hospice to figure out insurance options. I’m lucky to have her around to bounce ideas off.  She also has firsthand experience regarding how health care insurance companies handle claims.
• Without re-entering the workforce later with health care benefits, I’ll be paying for my own for a good nine years. Our budget will have to include a plan with both of us for the first year. After that there could be supplemental Medicare insurance for Karen. Regarding this, Karen says we have to look at her options in terms of do I keep her on my insurance as a secondary insurance rather than having a supplemental Medicare policy. We will look at that in 2020 when the time arrives.
• She agrees and I’ve experienced in the past that using COBRA after I leave fulltime employment is about the most expensive option out there. I met with our Human Resources person at work and confirmed its way expensive, even if I’m the only one on the plan. I would have 90 days after leaving a job to decide to file for COBRA which is good for 18 months.
• In related topics, I’ve done very little research regarding long-term care insurance other than knowing neither of us want the other to ever be in a nursing home. I add this only because it’s health care related and a budget consideration.  Life insurance is in the same category.  At the advice of an experienced friend, I’m to look at the cost difference between taking a reduced pension with survivor benefits verses the cost of life insurance should we decide we even need it.
• Karen added if she ever had to go in a nursing home she would file for Medicaid and make use of spousal protection clauses to separate our income and assets. She said she would not worry much about only being left with $80 a month from her social security check because she would not live long in a nursing home.
• All this has to fit in an annual income budgeted at $3,375 a month after taxes and including inflation in 2019 when I plan to leave my job. If you’re interested there is a good thread at the Escapees forum regarding fulltime RV budgets beginning November 2015.
• I’m always on the hunt for new ways to tax defer income as we have very few deductions to take on our annual taxes.

So here is what I’m thinking and doing today for us. Subject to change…

• I added a Health Savings Account (HSA) plan at work. We use this to pay for our portion of medical expenses. After reaching a certain balance, the extra can be invested. I contribute the maximum amount allowed by the current tax law which is $6,750 annually. I turn 55 during 2018 when I’ll take advantage of the catch-up clause which allows us to add another $1,000 annually. At work, I enrolled in a high deductible health care insurance plan with Blue Cross and Blue Shield. My employer also contributes an amount to our HSA account as part of the annual $6,750 limit and our account is growing quickly. For those that don’t know, an HSA is not the insurance portion, it’s a savings account with a debit card used to pay for certain health care expense. Among other things, an HSA account cannot be used to pay for our current monthly health insurance premium. The money for the HSA account is deducted from my paycheck before taxes. And I’m not taxed on the money when spent! There were several points to consider before we decided to change our health care plan at work.  You must consider your own health situation before doing this.
• I’m planning to use the established HSA balance to pay for out of pocket health expenses once we hit the road. If Congress votes in an increase on the maximum contribution limit, I’ll take advantage of it at least until I retire. Then after I’ll most likely come up with a minimum amount I want to keep in the HSA account based on our health care insurance plans maximum out of pocket expenses.
• More than likely, based on today’s health care insurance availability, I’ll be going with a higher deductible plan at retirement. Some refer to this as a catastrophic plan so you don’t go broke if major medical issues arrive. Again, that’s a what if which includes Karen and I not having any huge medical issues when I retire.
• Months ago, we joined our local community fitness center which costs $50 a month for the two of us. This included three sessions with a fitness trainer. Living a healthy lifestyle is for sure a way to reduce health care costs. Our family genetics for health issues prior to age 65 are not that bad – but then again that’s a “what if.”
• I figure we will go to Mexico for eye care and dental. I’m still thinking about how to handle prescription drug cost but will certainly follow the law with whatever option we come up with. OR – research how to cut the cost of this and other health care services. Here enters the notion of finding the best care at the least cost. I found a good article here that was written in 2011 as a starting point. I have zero experience shopping around for affordable health care services. Suppose now that payment is coming out of my HSA account that’s about to change. So far, I’ve found two resources of interest which are mdsave.com and healthcarebluebook.com.
• Karen had a few comments regarding how insurance is billed. You are at the mercy of the doctor’s billing person. Sometimes they code procedures, treatments and facility fees incorrectly. She says to challenge the costs and file an appeal with the insurance company. You might even be able to talk the doctor’s billing person into refiling the claim if they agree the insurance company (or the billing person) made an error. If you don’t believe the insurance was billed correctly you can also go directly to the insurance company to discuss the issue. Of course this is presuming one is able to recognize the error or what appears to be an out of control price from the doctor’s office (see the above online resources). She added an example where the doctor’s office, who are in-network, can only be paid per the contract with the insurance company. It’s typical that Blue Cross will only pay 49% of the total billed to them by the doctor in our region for example. She says the key is if you are paying the cost out of pocket then negotiate a price which is equal to what the insurance company would have paid.
• A coworker told me his doctor knows he is paying fees out of pocket through his HSA account. He has a family of four. The doctor’s billing is setup to charge him fees that are lower, presumably closer to the rate an insurance company would have paid. He does not have to negotiate the fees at all. Nor does he get a bill later from the doctor’s office because the insurance claim was denied or not paid in full by the insurance company. I’m hoping more doctors will take this approach and I can find a good one out of the group.
• I’m also very much interested in speaking with doctors through online video services for the more basic needs. Although I’m concerned something like a chronic cough might become something worse, for example, if we don’t meet in person.  I suppose any qualified doctor or nurse online would know enough to refer us to proper medical care?
• Briefly, regarding what state and county we intend to take up residency (domicile). We all know health care insurance cost, availability and plan coverage will factor in. And of course that will be one of the considerations as to where we officially call our home.

I know enough about the topic to be dangerous. I’m trying not to put out any bad information and really appreciate your ideas, corrections and additions. PS – I don’t qualify for veterans benefits as I did not have enough combined active service when I was in the National Guard.

Life in Kansas City – Hired a Financial Planner

In September of 2014 I dusted off an old retirement plan where I had planned on retirement at age 55 which for me is in 2018. I had created that plan in my early 30’s. I’d guess the plan was similar to what many others considered retirement. Everything paid off, a monthly income through pensions and savings that equal what I anticipated would be our monthly expenses.

The idea of what retirement would look like had changed considerably by 2014. I was no longer content to just have everything paid off and an income that just met my monthly bills while living in a small house, in the city, until the day someone pushed dirt over my grave. Karen and I had moved to the north side of Kansas City onto four acres with woods. We loved to garden and created our own oasis with walking trails through the trees lined with garden spots. Life was good other than having now lost both my parents, one to a heart attack and the other through cancer. I’ll not go into that other than to say both taught me a final lesson which influenced my own future.

So, dusting off the old retirement plan including a new meaning of what retirement will be for me.  I’m so lucky to have a wife who is an adventurer. I’m the planner, worrier and the type that must have a plan A,B and C before I’ll make an important move. She is the one with the survival instincts that includes faith that it will all work out even without a plan. I learn from her everyday how good life could be if one just lets it happen. Fortunately, we both like to camp, be outdoors and travel. Neither of us are afraid of big change even if we have different approaches in how we get there.

By 2014 I’d planned to move my retirement date to 2023 or age 59.5. By then there would be no need to work even part-time. We could stay on our property, in our current home and garden – until someone pushed dirt over our graves!

After thinking of the final lesson my parents taught, in 2014 I came up with the idea to travel in an RV after retirement and before we set down permanent roots. Karen was on-board after the first conversation.  Although I work in law enforcement, business was my college major. My father was a cop for over 50 years. We had a talk when I was around 17 years old. He suggested I go to college and get a business degree while working part time as a police officer. Over the years, I’ve owned my own business, worked for a corporation and handled my own financial planning. I’m the type who must have a 100% understanding of what is going on financial to feel comfortable with the plan. In other words, until recently I would not have felt comfortable with someone else investing for me or planning my financial future.

Like many others planning to fulltime in an RV, we moved our start date ahead by a few years. I adjusted the financial plan in anticipation of leaving in 2019. I call it my save and leave early plan. Late last year I took a hard look at the earnings on our retirement investments. I talked to a few people I trusted who were already or nearing retirement. At the time, most of our investments were with Waddell and Reed. I should have done it years ago, but for the first time I compared their rate of returns against just the simple index funds. Waddell and Reed had always done a little better than the “market” when things were good and a little less poorly when the market was down. That had been changing in the last few years as their returns were not up to expectations. I know exactly what our rate of return must be before and after retirement. Over the past ten years, Waddell and Reed had just been clearing that rate of return by less than half a percent. Not good when their funds are expensive to own in terms of what they charge to get into a fund and their annual expense ratio. So, I arranged a couple meetings with our account manager at Waddell and Reed who by chance was also preparing for his own retirement.

Waddell and Reed is a large financial company. They have independently owned branch offices scattered around the country who are affiliated to Waddell and Reed where they can invest in only their mutual funds. I’ve over-simplified that a bit because it’s boring to write about. Anyway, the guy who I’d worked with for years told me he was selling out to a Waddell and Reed corporate executive as part of his retirement succession plan. He wanted me to meet with him and the new owner because I’m one of his “different customers.” By that he meant he wanted the new guy to know he would have to explain every move he made to me in detail and put up with my type A personality.

Fast forward a few months to the point where I’d evaluated my Waddell and Reed account over a 10-year period. I was not satisfied and called the new guy. He asked me to come by their new office which had been moved to a more affluent area of Kansas City (Briarcliff).  I intended to tell him I was moving away from Waddell and Reed. To my amazement, he told me he was doing the same for the exact reasons I was which included Waddell and Reed mutual funds were no longer performing to expectations. Shocking news to say the least. Because the new guy has only had one job since he got out of college more than thirty years ago, and that was with Waddell and Reed where he rose through the ranks to become a devoted executive. He was moving his office to offering financial planning services with investment options to include all forms of investment rather than just Waddell and Reed funds.

I was faced with a decision that for the first time included detailing my financial condition and all investments to someone else to manage. Or simply leave and go to just another mutual fund company. I thought a small test was in order! I handed over my current retirement plan to the new guy expected the salesman side of him to shine which would include him telling me there was no way I was going to be in financial shape to meet our goal to retire early and travel. I thought he would tell me to retire later and give him more money to manage and charge for that management. Turns out he has other clients traveling in RVs. He has learned from them and was excited for us.

The new company is part of LPL Financial.  I told the new guy Karen would be coming to our second meeting because I wanted her to know everything about where our money was kept. That was in case I was hit by a bus and she needed help. I told him if that happens he should expect a call because I only wanted Karen to have to call one person to help with financial considerations in the event of my death rather than all the other account managers where our funds had been scattered to include the bank, Waddell and Reed, credit union and Fidelity Mutual Funds. And eventually the money we keep in savings after selling our home.

I walked out of that meeting with a total sense of relief and for the first time felt comfortable with someone else holding the purse strings. For a control freak like me, that was quite an accomplishment I might add. The new guy has already given me some homework which is to look at structured notes as a place he might put some of the money from the sale of our home. In this case, he would build-in protection of the principle investment. He is also considering structured notes for part of his own retirement savings. I had told him we would like access to the house money in about six years after we retired to an RV which might be a time we would either settle down or stay on the road which is somewhat of a guess. I’ve not finished my homework assignment, nor sold the house, so have not given him the go-ahead with that type of investment. The new guy has already met with the other 12 financial planners in his group to decide which mutual fund investments they are moving clients towards. As our Waddell and Reed account was converted to cash and moved to the new company, he has also yet to invest those funds. He and others think the stock market has generally run-up and may go down in value soon. He is waiting until March to dollar-cost average into the market thinking others have invested early because of expectations in market growth based on the new president’s policy. Neither of us believe in market timing where you take a guess at when the market will be low or high and invest accordingly. It’s just that for the first time in years my account is sitting with all cash needing to be invested so it’s being done wisely and at intervals.

What does all this come down to for me?  For the first time, I’ve hired someone to manage my investments and to trust their opinion. That’s costing me 1.5% of my portfolio annually. And Karen has only one person to call if that bus hits me. And, if we need the income in retirement I’ll simply have to call one person and tell him to set it up based on how much we want each month.

 

In the meantime, we continue to down-size our stuff at home. I’ve been doing a lot of research on trucks and will post about that later. And I had a few internet links of interest I wanted to share with everyone but will do that later as well.

 

Thanks for reading and commenting.

Financial Planning Update

In September of 2014 I had looked to “retire” at age 59.5 when there would be no tax penalty for early withdrawal of tax deferred savings such as traditional or simple IRA accounts. Before 2014 I had always planned to retire by age 62. The death of my parents changed my opinion. 

I hope this dump of information about our current financial considerations might help readers planning for their retirement. I suspect someone will read this blog having just made the decision to plan to live fulltime in an RV. I was there in 2014 and really appreciated all the budgeting advise I learned from others.

As a public service employee in law enforcement we have an added tax benefit. We can withdrawal from our tax deferred 451 account any time after age 50 without penalty.  Unfortunately, I believe this is because our life expectancy in retirement is less than the average.

My financial plan still considered the need to take from additional accounts that don’t have the same tax advantage such as a Simple IRA. I wrote an earlier blog post about detailed financial planning which I updated in April of this year. If you’re interested, here is a link. My own planning includes preserving the principal balances of those tax deferred accounts.

It might not be shocking that Karen and I became to excited about the prospect of traveling around the country in an RV to wait any longer than necessary. Of course, we could break camp now (sell everything), find a job that supports our additional income needs, and take off. I’m not that adventures and have to feel comfortable with a potentially disastrous decision. Many current RV fulltimers have more than joked when we met that Karen and I would advance our plans. If you keep track of our progress you know we did just that by moving the date to October of 2019 when I’m 56 and qualify for one remaining small pension plan. Had we waited until 2023 there would be no need to work. Leaving in 2019 causes us to have to make up about $500 a month in income shortage and use some cash savings for a few years. Volunteering for a camping spot, working a paid job at times and other methods would easily help make up  part of the shortfall.

To demonstrate how anal I am about finances, I figured out I had to save $21 to knock one day off our retirement date to get it down to October of 2019. That way we would have a cash account to help makeup our budget deficit for a few years in additional to taking temporary workamping jobs. I called this our Save and Leave Early Plan.

I’m overjoyed to report we should meet our savings goal by around January of 2018. There is a counter on the right side of this page counting down to the retirement date. I’m leaving it alone rather than admitting October 2019 is a go date because it encourages me to keep saving. But you can damn well expect me to change the countdown calendar to show hours left at work once 2019 gets here. However, we are planning to get our truck and fifth wheel early and use up a lot of saved vacation before then. I’ll have to work 1000 hours in 2019 per the pension folks. Maybe I can beat the October 2019 goal!

The only concern Karen and I are left with is healthcare. Although she will qualify for Medicare a year into this, I’ll have to provide my own insurance. There is no way I’m going to let that stop us. I’d rather step in front of a truck dying with cancer than to postpone real living! This year I switched our insurance at work to a health savings plan/account. This plan was available through my job and is provided by Blue Cross and Blue Shield. If things go as planned at retirement we should have built up a savings balance to hopefully get us started with whatever high deductible plan we can find when retired.

God continues to provide for us. Although I don’t feel deserving of it, I had mentioned earlier that a part-time employer of mine wants me to keep the job while on the road. Early this week he said it again. Fact is he wants me to keep the job for the next 13 years. The work requires about 10 hour of my time each week. I’m thinking about doing it because the income is greater than our budget deficit without the job. Love having a plan B! For those of you still planning you might want to consider starting a part-time job now that can be taken on the road with you. Although I had read about others taking on mobile jobs, I’d not thought of that before this opportunity came up. A few months before we leave I may start doing the part-time job as if we were already on the road. Such as working in a confined space with minimal internet connectivity and from a laptop computer.

Thanks for reading and commenting. Hope I don’t chase off any readers with my rants. 

I’m still trying to figure out one other goal. That is how to switch off a type A personality and learn to better go with the flow. Perhaps God already gave me the ability to think through that as well? I hope.

Our Day with Full-timers in Kansas City

Last Sunday Karen and I met up with John and Sharon who have been on the road fulltime for five years in their 37’ Tiffin Allegro motorhome, having retired from Texas.  I started following their blog, On the road of retirement, last October. According to my notes back then what attracted me to this blog was the writer is an over-thinker just like me. Definitely worth reading from start to finish. It’s as if I was reading about my own journey to retirement.

John and Sharon in Kansas City

 

I’ll try and not repeat anything John wrote about our meeting. If you are interested, click here for his great blog post.  In other words – I’m being lazy.

 

Just after John posted our blog lite up with hits.  They have quit a few followers! I had trouble keeping up with the comments on our own blog which I’m much thankful for.

 

Meeting full-timers has to be an excellent way to learn about life on the road. Karen and I really want to thank John and Sharon for taking time out to spend the day with us, touring the fine town of Kansas City.  I picked up on a few new vocabulary words such as “the fly-over states” which Missouri has been described as being part of.  If one spends enough time on the forums or reading blogs it becomes apparent Missouri is among the states less visited by full-timers.  I’m planning to do my part and try and change that!

I received word through their blog that John and Sharon would be heading close to Kansas City on their trek north. Sent them an email and the next thing you know we got together. 

We enjoyed the view from the Liberty Memorial – A.K.A World War One National Monument and Museum. I liked the photo of them taking photos of the cityscape!

Unlike my usual method of operation, I did not keep notes about all the advice passed along to us. I was busy just enjoying the day touring a few stops in town.  I had emailed John some suggestions and he passed along a few spots in Kansas City he might be interested in seeing. I learned it’s good to get a list of interests and maybe recommend the best example of stops similar to their interests. What also worked well was to send a text message when we arrived in the area of their first stop rather than making a bunch of phone calls.  I described what we were wearing, to include Karen’s monster black purse, and where we were standing at the City Market. Several minutes later this bubbly couple came up and asked if I was Mark.  

One piece of advice that stuck, was their method in someday deciding how to handle it if one or the other was ready to come off the road.  As John explained, every six months or so they have a talk and ask the other if they are ready to come off the road.  They previously agreed should one want to come off the road they give the other six months notice so they can make plans.  They are loving their time on the road and have no plans for it to stop!

 FYI – Those of us getting ready to go on the road are called future-timers.  John has also published an E-Book titled Budgeting for the Full Time RV’er. I was impressed that he had researched attending the World War One Museum and figured out the first weekend of each month is free for Bank of America account holders.  Apparently there are museums around the country with the same offer. Appears the same is true for Merrill Lynch credit and debit card holders.

Thanks again John and Sharon.  Travel safe!