How much to spend on retirement boat

[MurrayM]

I should probably add...another reason for the earlier rant (and giving out a 'wee bit more' financial info than I probably should have) is that people accuse me of making a lot of money and tell me that I will get a big pension. I don't think so. Then they think their taxes pay my salary and pension. Rubs a guy the wrong way after a while.

Not complaining about our situation (just other peoples misconception of it) as we chose Happy & Humble a looong time ago, and have lived within our means while saving at the same time to give us a chance to retire early if possible

 

[SteveK]

Murray, ask a mod to delete post 51.
I know my taxes don't pay your wages but with all the stamps I have used you should have more in the bank.

 

[smitty477]

I listen to what politicians promise their constituents. The future begins November 4th about 10 weeks from now. If I wasn't writing a check, I'd wait the ten weeks to see what might or might not happen.

Glad my financial planner is more conservative than.....

Ted

Please provide a name and contact number for your financial plannner - I will give him/her a call.

 

[Simi 60]

If you're at retirement, don't finance it, write a check for it. If you can't afford to do that, you're spending too much.

Ted

Shhhh, some of us like roosters being turned into feather dusters, its how we get our pretty things cheap.

 

[smitty477]

I had considered changing my residency to FL. All I need to do is stand up and say, "I am now a resident of FL." Then get a FL drivers license.
Even 20% is too high. SIGH

Yes - 20% one shot would be too high , and in some cases there would be state and IIRMA taxes added on to that. Since loan rates are available under 5% with no prepayment penalties the math is the key in the decision which varies case by case.

 

[Seevee]

Just logged on ad was surprised to see how many passionate responses this thread has received. No offense, but the most interesting reply was the one that said I asked for advice. I don't think I was actually asking for advice, I was just explaining my circumstance and thought process. For what it's worth, I'm 60 years young and have been socking away $3500 a month toward my retirement account and also have a small 401K with my employer. My wife also has a building retirement pension account - so even at this stage of my life, if I wanted to retire, I have the luxury of being able to pay cash for a $500K+ boat and still have an income stream for a very comfortable lifestyle. When I actually reach retirement age, I anticipate the $$$ for a boat will be even greater than what I know I could afford today. So would I just pay all cash like OC suggests or finance some of it just to keep more COH? Still undecided but truly appreciate all the suggestions and comments. Keep it going, this is fun....

Jim,


Well, advise you get... that's just the way these forums are.


I'm in a similar boat to you (pun intended), so I can relate. Sounds like you'll do fine, the goal being to spend your dollars, enjoy the boat and drop dead broke. Well, a bit hard to time that and we really don't want to run out.


the $3500 a month isn't bad, especially if you've been doing it for 10 years and could compound your dollars with a reasonable return of 8 to 10%. At that rate, it could pay more than double your payment back to you and never touch the principle.



HOWEVER, that's not inflation proof, and I could argue to do "some" kind of investment that IS inflation proof.



If you retire at 60 and are fortunate to live another 30 years until 90 that $3 loaf of bread will now cost close to $10. And figure on everything else tripling. Your $100 an hour maintenance guy is not $300 and the $3 fuel is $10.


As for financing a toy, I could argue either side of that, but clearly there's a LOT more risk in putting debt on a toy. Put the debt on an investment (that pays for the toy) and deduct the interest, etc., and enjoy the inflation of your investment that will hopefully carry you well into your 90s.


With that half million, I could argue to conservatively get a $250K boat and invest the rest for the rainy day. There's a likely chance you'll spend a bunch of the extra money on improvements. However, that does depend a bit on your income a bit. If the income is inflation proof (not fixed) that makes a HUGE difference. Fixed becomes worth less and less and at some time won't pay for the loaf of bread.


Now, congrats on getting into the retirement years! Enjoy and get that boat.
(I retired just prior to 60 and no regrets).

 

[smitty477]

Jim,


Well, advise you get... that's just the way these forums are.


I'm in a similar boat to you (pun intended), so I can relate. Sounds like you'll do fine, the goal being to spend your dollars, enjoy the boat and drop dead broke. Well, a bit hard to time that and we really don't want to run out.


the $3500 a month isn't bad, especially if you've been doing it for 10 years and could compound your dollars with a reasonable return of 8 to 10%. At that rate, it could pay more than double your payment back to you and never touch the principle.



HOWEVER, that's not inflation proof, and I could argue to do "some" kind of investment that IS inflation proof.



If you retire at 60 and are fortunate to live another 30 years until 90 that $3 loaf of bread will now cost close to $10. And figure on everything else tripling. Your $100 an hour maintenance guy is not $300 and the $3 fuel is $10.


As for financing a toy, I could argue either side of that, but clearly there's a LOT more risk in putting debt on a toy. Put the debt on an investment (that pays for the toy) and deduct the interest, etc., and enjoy the inflation of your investment that will hopefully carry you well into your 90s.


With that half million, I could argue to conservatively get a $250K boat and invest the rest for the rainy day. There's a likely chance you'll spend a bunch of the extra money on improvements. However, that does depend a bit on your income a bit. If the income is inflation proof (not fixed) that makes a HUGE difference. Fixed becomes worth less and less and at some time won't pay for the loaf of bread.


Now, congrats on getting into the retirement years! Enjoy and get that boat.
(I retired just prior to 60 and no regrets).

"If you retire at 60 and are fortunate to live another 30 years until 90 that $3 loaf of bread will now cost close to $10."

FWIW - in the past 30 years that loaf of bread would have gone from about $3 to $6.

 

[JLD]

<<<<<< Originally Posted by O C Diver
If you're at retirement, don't finance it, write a check for it. If you can't afford to do that, you're spending too much.

Ted>>>>>>>>




I could argue STRONGLY for Ted's statement. Retirement or not, there's rarely a good reason for financing toys. I know one could argue this, but makes no sense. If you need money for toys, invest your down payment in something income producing, and when you save up enough, sell the asset and buy your toy.


And ~20% of retirement income.... hell no! Perhaps 2%, if any at all.

I would offer than generalities are of limited value. What is the retirement income 20K or 200K? Are we talking about a 30K loan or a 300K loan? Financing for 5 years or 20 years? Tiny down payment or larger down payment? Does the retiree have a dirt home? If so, is there a mortgage payment or is the home owned outright. If a large portion of the retirement income is disposable income (not tied to corporate pensions or the stock market) then general advice that someone can't afford to finance ANY depreciable asset speaks towards the mindset of the person (and that's okay as well), not financial risk of the decision. There are just too many variables to tell a person they can or can't afford to buy, or finance, a boat.

Having a guaranteed income stream (baring the collapse of the U.S. Government) I am not worried about financing depreciating assets into retirement. Have monies aside for the retirement house, I can finance a boat using 6 - 7% of my retirement income for the next 5 years. It would be silly for anyone to say that I can't afford to finance a boat and should give up 5 years of boating to pay cash outright for the boat.

Interestingly, I bet that if I asked if I was 60 years old, should I buy a boat (with cash) now and continue paying a mortgage on my house for the next 5 years, I bet the replies would be do it now and buy the boat.

I ask, though, what is the difference?

Jim

 

[Fletcher500]

Generally speaking, I don’t think financing things in retirement is a good idea, but as others have noted, there are a lot of variables to everyone’s situation so it could work for them. I think it’s interesting that some people who responded, well one in particular, had multiple posts against it. Move on, it’s other people’s money, they earned it, and can do whatever the heck they want with it.

 

[Codger2]

Considering he triggered 3 pages of responses, the OP is strangely silent. Maybe yez all told him something he didn't want to hear, or you answered ALL his questions already..?

My money is on the bold print above.

 

[KnotYet]

My money is on the bold print above.

Just logged on ad was surprised to see how many passionate responses this thread has received. No offense, but the most interesting reply was the one that said I asked for advice. I don't think I was actually asking for advice, I was just explaining my circumstance and thought process. For what it's worth, I'm 60 years young and have been socking away $3500 a month toward my retirement account and also have a small 401K with my employer. My wife also has a building retirement pension account - so even at this stage of my life, if I wanted to retire, I have the luxury of being able to pay cash for a $500K+ boat and still have an income stream for a very comfortable lifestyle. When I actually reach retirement age, I anticipate the $$$ for a boat will be even greater than what I know I could afford today. So would I just pay all cash like OC suggests or finance some of it just to keep more COH? Still undecided but truly appreciate all the suggestions and comments. Keep it going, this is fun....

Uhh...

 

[boathealer]

Just because you finance a boat doesn't mean you can't afford it.

A wise man with enough money to pay cash may finance a boat at x% and keep the cash working for him at (x+n)%.

One just has to know what he CAN afford and not get over-extended.

 

[Art]

Pleasure Boat - not used for business nor as a live aboard:

Boat is a bad investment for dollar value appreciation

Boat is a vehicle that in many ways eat$ $$$ throughout every year owned

Boat use can be dangerous and has many ways for injury or even death

Boat usually takes effort from the owner to keep it viable during ownership

HOWEVER!!!! AND, IN REALITY!!!!

Ya only have a certain amount of years to enjoy life. Pleasure boating offers huge enjoyments

Any type of life enjoyment-endeavor costs money $$$. Spending $$$ on pleasure boating can provide great, great enjoyments

IMO, and in the opinion of many others... there is nothing better [more enjoyable] than pleasure boating!

Sooo - When you purchase a boat, simply make sure you can afford it. And, expect to loose value on your investment as well as to spend much money on your investment during ownership. - But, who cares?? After all - it is - PLEASURE BOATING!!

 

[Seevee]

Good points on financing a boat (toy). I could still argue against it regardless if you just got out of school or you're headed into retirement.


Financing toys has never really been a good idea. Just too many down sides. Depreciating asset, what happens if things go wrong with the boat or the investment you're financing the boat with or just your situation.



Now, one could argue, I want it now, and I can invest my money and get xxx but only pay x for the boat... It's a good argument, but doesn't hold water, for the most part, IMHO.



I'd bet that most of us here don't finance their toys. But the ones that do, well.... it's your money.

 

[mahal]

For those opposed to financing a toy - if you were to get a toy car, say a Jaguar F-type for some spirited weekend driving, and they are being offered at 0% interest for 5-years (this deal actually exists now), would you still buy outright?

A quick calculation tells me that if you're getting a 5% return on your money, you would be ahead around $20k if you financed the toy and left your cash alone.

BTW, I paid cash for my boat because the numbers favored doing it that way.

 

[O C Diver]

For those opposed to financing a toy - if you were to get a toy car, say a Jaguar F-type for some spirited weekend driving, and they are being offered at 0% interest for 5-years (this deal actually exists now), would you still buy outright?

A quick calculation tells me that if you're getting a 5% return on your money, you would be ahead around $20k if you financed the toy and left your cash alone.

BTW, I paid cash for my boat because the numbers favored doing it that way.

While this isn't the answer to your question, somethings are better to rent than to own.

Ted

 

[smitty477]

While this isn't the answer to your question, somethings are better to rent than to own.

Ted

We will be mostly in florida next year so please provide a name and contact number for your financial plannner - I will give him/her a call.

 

[O C Diver]

We will be mostly in florida next year so please provide a name and contact number for your financial plannner - I will give him/her a call.

My financial planner is a retired family member. He still advises me as a family courtesy.

Ted

 

[smitty477]

My financial planner is a retired family member. He still advises me as a family courtesy.

Ted

Could you/he give a good referrel to whomever took over his book of business?

 

[O C Diver]

Could you/he give a good referrel to whomever took over his book of business?

I can ask, but doubt he will respond with the name of the group he worked for. He is a very cautious person. You wouldn't find him on a public forum like this or social media site.

Ted

 

[smitty477]

I can ask, but doubt he will respond with the name of the group he worked for. He is a very cautious person. You wouldn't find him on a public forum like this or social media site.

Ted

Do they have a website? Maybe a business name? Can I use your name (Ted) when I call?

 

[O C Diver]

Do they have a website? Maybe a business name? Can I use your name (Ted) when I call?

Ok, this has gotten really weird. I don't know you. And I'm not going to let you use my name for any reason.

We're done.

Ted

 

[smitty477]

Ok, this has gotten really weird. I don't know you. And I'm not going to let you use my name for any reason.

We're done.

Ted

There are plenty of folks on this board that refer brokers, insurance agents, surveyors mechanics and the like.
They refer these business's because they know they have performed comnendably for them in the past and want to help both the business and propective clients. It is very common thing to do with any business when they have a good to great service and/or product.

Earlier on you stated that you had a good financial planner that you listen to for your goals.
What is really wierd is that this planner is retired, a family member, and does not currently have any business contacts that can be referred.

 

[OldDan1943]

My financial planner is a retired family member. He still advises me as a family courtesy.

Ted

Family member?
This family member knows all about your finances? I hope he's on your side should be there be a divorce. LOL
Next you will tell us, your wife goes to a family member who is a retire GYN

LOL Just pay some working professional. LOL

 

[OldDan1943]

To be honest, I have increased my net worth almost 4 times (in less than 10 years) while sitting on my hands and I didn't have to pay an advisor. I had one stock broker drop me because I was not making him any money.
What we should consider is, the advisor 'doesn't have a dog in the fight.' You could take his advice and end up totally broke. Yes, it has happened and meanwhile your advisor is living the good life.
Unless he is covering your losses, based upon his advice, I would be very careful following his advice.
Some stock market reporting firms, gives a yearly projected stock worth but, one must accept it is s dynamic projection of the price. No one is hanging his hat on that projection.

Back in the early 70s, when I was going to college, my economics professor said, 'the stock market will climb to 300 points and then fall into a black hole.' So much for his good financial advice.

 

[O C Diver]

There are plenty of folks on this board that refer brokers, insurance agents, surveyors mechanics and the like.
They refer these business's because they know they have performed comnendably for them in the past and want to help both the business and propective clients. It is very common thing to do with any business when they have a good to great service and/or product.

Earlier on you stated that you had a good financial planner that you listen to for your goals.
What is really wierd is that this planner is retired, a family member, and does not currently have any business contacts that can be referred.

Oh, now I get it, you're just an Internet Troll. I had you pegged for an internet PREDATOR or one of those scumbags that tries to steal your identity or your investments.

This is a boating form. I have referred a number of members to boating related businesses that I have used. So when you posted this:

Please provide a name and contact number for your financial plannner - I will give him/her a call.

I thought how weird is this. Who asks for information about the people who handle my personal or financial affairs. I would no more give you the name of my financial planner, than my lawyer, tax preparer, personal banker, doctor, or dentist. So I ignored your post.

Apparently you didn't take the hint and posted this:

We will be mostly in florida next year so please provide a name and contact number for your financial plannner - I will give him/her a call.

So I explained to you that my financial planner is a member of my family and retired. This is completely true and anyone with honest intentions would have taken the hint and let it go.

Clearly you didn't have honest intentions and wrote this:

Could you/he give a good referrel to whomever took over his book of business?

At this point it's clear you're up to no good and try to blow you off.

I can ask, but doubt he will respond with the name of the group he worked for. He is a very cautious person. You wouldn't find him on a public forum like this or social media site.

Ted

Then you wrote this;

Do they have a website? Maybe a business name? Can I use your name (Ted) when I call?

You should consider yourself lucky. I was considering reporting you to the moderators as someone that might be up to criminal activity. But I wasn't sure, so I just cut you off.

Recieved a few PM in the last couple of hours. Apparently you're a known Internet Troll here on the forum.

Let me be clear about this, I care less than not at all whether you think I have a family member as a financial planner. The sad part is that you lack the maturity to just simply say it. Why don't you just find a bridge to play under instead.

Ted

 

[Peter B]

Just logged on ad was surprised to see how many passionate responses this thread has received. No offense, but the most interesting reply was the one that said I asked for advice. I don't think I was actually asking for advice, I was just explaining my circumstance and thought process. For what it's worth, I'm 60 years young and have been socking away $3500 a month toward my retirement account and also have a small 401K with my employer. My wife also has a building retirement pension account - so even at this stage of my life, if I wanted to retire, I have the luxury of being able to pay cash for a $500K+ boat and still have an income stream for a very comfortable lifestyle. When I actually reach retirement age, I anticipate the $$$ for a boat will be even greater than what I know I could afford today. So would I just pay all cash like OC suggests or finance some of it just to keep more COH? Still undecided but truly appreciate all the suggestions and comments. Keep it going, this is fun....

Ok, Jim. Good you got back and explained all that. However, might I respectfully point out your thread title, which did read..."How much to spend on retirement boat?".
The question mark was at least implied...

Firstly, let me say that if your finances are as you say, you are very fortunate indeed.

Secondly, let me say don't wait another minute. Just find a good boat and jump in and hang on..!

Why do I say that..? Because 18 years ago I pulled out 55k and bought a bit of a project boat, because my finances were nowhere near what yours are, but at least I owned the boat outright, and we wanted to get out there and do it while still young and fit.

I'm glad we did, because when I came to retire, (at 71) I realised we could not afford to do that and keep the boat, so reluctantly sold her, but after 16 years of enjoying the boating life, so no major regrets at all. We'd done it, and enjoyed it, and were content. Then, less than a year later, my wife developed health issues that would have precluded any further boating anyway.

What if we had delayed until all the ducks were in a row..? No-one knows what is around life corners, as covid has proven. So, my message is don't wait until you retire. Get started if at all possible. And if your work commitments are too high to allow that at 60, you need to re-examine carefully your work life balance. You may not have asked for that type of advice, but, as a retired medic, I give it for free..!

 

[SteveK]

Peter that was well said and to the point that many forget at these later years

 

[Seevee]

While this isn't the answer to your question, somethings are better to rent than to own.

Ted

Ted,


I think most of us have failed at that one!

 

[Seevee]

For those opposed to financing a toy - if you were to get a toy car, say a Jaguar F-type for some spirited weekend driving, and they are being offered at 0% interest for 5-years (this deal actually exists now), would you still buy outright?

A quick calculation tells me that if you're getting a 5% return on your money, you would be ahead around $20k if you financed the toy and left your cash alone.

BTW, I paid cash for my boat because the numbers favored doing it that way.

Mahal,


You make a good point, but some of have no desire to have a new car regardless of the gimicks. But money isn't free and I'd be surprise if there wasn't a cash discount on the table. Again, I'd never know as I buy used cars and run them til they die. I'll spend my dollars on boats, beer and wild women... the rest I'll waste.