As mentioned in Small Plans Become Big Plans, it was in 2019 that Jimmy and I had decided we want to move forward with full time cruising before we reached age 62, and preferably in five years. Seems like a simple concept until you spend a whole two minutes thinking about it. Then it can feel overwhelming to figure out what needs to be done.
Our major concerns dealt with finances and our household items. Then there were questions regarding health insurance, what about our families, do we keep our home or buy a smaller one, what boat do we cruise on, and what do we need to learn to make this successful?
We spent some time discussing and debating these and many more questions. Eventually we flushed out our “Five-year Plan” based on addressing some major milestones. Our plan helped us manage the larger pieces of the puzzle and involved four major components:
Check Finances
Sell Existing Sailboat
Purchase New Boat
Sell House
We took these components and figured out a timeline for them that appeared to fit into a five-year timeframe. Briefly, here is how we broke it down.
Step 1: Check Finances
Goal: to complete first check within one year, during 2019 & 2020
Actual: first serious look took nearly a year, and we regularly check back with this step
This is really a very important step in the process, although not very exciting. We spent at least six months working on this step of the plan before we would even consider any other actions. Key steps included
· evaluating our employer’s retirement plan,
· meeting(s) with our financial advisor and
· setting up an annual budget for the five-year plan and for post-retirement.
If we were to put off cruising until after we retired, the finances portion of sailing preparation may have been easier to figure out. Since we wanted to stop working before reaching our employer’s retirement age of 62, we knew that we would be reducing our retirement income. Our options were to 1) quit our jobs, not withdraw any retirement funds until age 62, or 2) to retire now to begin drawing retirement funds with an early retirement penalty.
To help us with that decision, we met with our financial advisor, whom we have been working with for 20 years. I should mention that Jimmy and I are fortunate to have had the income of two engineers, which is pretty good, even working for a municipality. We are also rather frugal in nature and have the ability to save money if we really pay attention to our spending. This and the wisdom of our financial advisor has allowed us to make the decision not to draw our retirement funds until we reach age 62. Instead, we plan to save as much money as possible to attempt to bridge the gap between age 55 and 62 while our financial advisor is helping us place our savings into accounts that can be accessed with varying levels of ease.
How much to save depends on the lifestyle we want to lead while cruising. This is where being frugal in nature will help us out. In doing research of other cruisers, it appears that you can be super-duper frugal and live on $1,500 a month, and some live with more luxuries, spending as much as $10,000 a month. We are aiming for one the more common ranges, spending between $3,000 and $5,000. These costs include everything from food to fixing the boat. Here is a link to one website that gives a decent breakdown of costs that I will not go into today: https://thehomethatroams.com/blog/cost-of-living-on-a-sailboat/.
If we run low on funds, we can lean on some skills to find work. On the low commitment, low tech side, there is bartending. Then on the other end of the scale, we can look for remote part-time engineering work. In fact, I am thinking of registering as an engineering firm before we leave so that we’ll have that option for income before we run into financial troubles (or if it just interests me).
We have also set up a detailed annual budget that will help us better manage expenses now and to help us determine what a future cruising budget might need to be. Jimmy and I keep close track of everything we spend money on. Each month we review it together and discuss ways to further reduce our spending and is something we plan to continue once we have started cruising.
Step 2: Sell Existing Sailboat
Goal: List in 2021 to sell by 2023
Actual: Listed in August 2020, and sold February 2021
During those discussions and debates, Jimmy and I had decided that our existing boat About Time, a 32’ Sabre was not the right boat for us and our large cat to go full time cruising on. Now, if we could not afford a larger boat and did not have Baxter, About Time would have been fine for cruising to many destinations. We both agreed to look for something larger but did not want to own two sailboats and a house at the same time, therefore felt it was prudent to sell the 32’ Sabre before purchasing another boat.
Originally, we thought we would list the Sabre for sale in 2021, allowing two years for it to sell with a “By Owner” listing (selling a sailboat of this cost range in the big bend of Florida makes for a slow market). Yet, in early 2020 we just completed several upgrades to About Time and realized that it may be best to put her up for sale now instead of later. The boat was advertised in late summer of 2020 and the new owner took possession of her in February 2021, well ahead of our original schedule. Note that the day you sell your boat is not always a happy day. Jimmy and I loved that boat and were sad to see her go.
Step 3: Purchase New boat
Goal: Shop in 2022, purchase by Spring 2023
Actual: Serious shopping began Spring 2021, purchase completed Summer 2021
At least the melancholy of seeing About Time sail off to Mississippi was eased with the freedom to begin our next-boat shopping. The original five-year plan had us purchasing the new boat before Spring 2023, and now we found ourselves without a boat in the Spring of 2021; plenty of time to finish this step.
At first, we thought that with so much time available in our five-year-plan schedule we would take our time, looking far and wide for “The Boat”, however it did not take long for us to get the itch move this step along a little faster. It turns out that when we began shopping in earnest, there was a shortage of boats on the market due to a sailboat buying spree caused by COVID-19 pandemic. This shortage did not exist back in early 2020 when we first began to prepare for the sale of About Time and had started to look at potential sailboats. We quickly discovered that there were not that many boats available that met our desired specifications.
Our luck changed when a certain Caliber 40 LRC popped up on Yacht World that spring. The boat was slightly out of our desired price range, but impatience, our strong feeling for this boat, and due to another oddity to our five-year-plan schedule, I gave in, agreeing with Jimmy that perhaps we could go ahead and pull the trigger on Utopia.
Step 4: Sell House
Goal: List by October 2022, to sell by October 2023
Actual: Never listed, but received first offer in September 2020, final offer in March 2021, closing in January 2022
The oddity that helped us feel more comfortable with purchasing Utopia was the pending sell of our house. Our original plan was to list the house somewhere between May and October of 2022, and hopefully sell the house by October 2023. However, due to what could be a long story, our early home selling came as a surprise to us.
To keep this story short, I’ll just say that a friend of friend of ours was interested in the house. Listing About Time was a major flag that we were working our five-year plan, which included selling our house, so she decided to begin a conversation about buying it from us. At first it caught us off guard and we were nowhere prepared to move yet, so we countered with a higher price that was not accepted.
Six months later we were more mentally prepared to sell the house, and the housing market was hot with home prices rising like crazy. It has occurred to me that the “high” price we countered with before would be too low now.
A couple of weeks after About Time left our dock, the buyer approached us again, agreeing to the price that we had countered with back in September, and gave us a year to close the deal. Jimmy and I felt that perhaps this offer was the right path for us. Even though we may have sold the house at a higher price on the open market, this deal provided a better idea of when we would be moving, we would not have to show the house (with a cat inside), and we would have time to start downsizing.
The remainder of the Five-Year Plan
Goal: Live onboard in 2024 at Marsh Harbor in Shell Point, slipping the lines October 2024
Actual: Live in an apartment in 2022 and 2023, slipping the lines October 2023
Knowing that the house was sold when we looked at Utopia, is what helped us agree to purchase a boat slightly outside of the price range we had agreed to. Selling the house so early did catch us off guard, and we pivoted in our plans a bit. Instead of living onboard in Shell Point, we decided to move into a small apartment in downtown Tallahassee. Also, with the accelerated steps in our plan and mainly due to our continual re-check of Step 1, we determined that we could afford to turn our five-year plan into a four-year plan.
We are now about four months away from completing this plan, and I feel there is a lot of work to be done, which we plan to share as the weeks tick by.
23-23
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