Determining Your Monthly Budget
The first step in creating an accurate financial plan for retirement is constructing a spreadsheet of your current spending.
If you intend to continue living as you do in your home, then your budget will reflect that. It’s important to be honest with yourself about what your personal needs are. If you are someone who enjoys an active social life which involves regularly eating out with friends, meeting for drinks or coffee and so on, then it’s likely that you’ll continue pursuing an active social life after retirement.
Marina Costs
If you choose to keep your sailboat at a marina full time, the cost will vary from location to location, so you’ll need to research the area that you’re hoping to settle. I’ll give you a few examples of costs nationally.
For a 40ft sailboat, I found these marina costs:
- Islamorada, Florida Keys: $988/month. This price does not include water or electric, which is metered. Tax also not included.
- Hilton Head, SC: $760/month. Electric can range from $60-$260/month.
- San Francisco, CA: The cost is $463/month. Electric is metered.
- Seattle, Washington: $677.94/month. Electric is metered.
As you can see, there is a pretty fair range in costs of marinas across the country. There is often a liveaboard fee which is not included in the monthly cost, as well.
Marinas in popular areas often have waiting lists for liveaboard slips, so plan ahead and get yourself on that waitlist prior to retirement.
Additional Marina Costs
If you choose to live at a marina, it's likely that you’ll spend more beyond just the cost of the slip.
You’re more likely to own a car while living at a marina, so the cost of car maintenance and insurance needs to be factored in. Your marina may also charge you for your parking spot. You’ll likely go out to eat more and purchase more at the grocery store. (When you know you have to lug all your groceries back to your dinghy and then haul them up onto the boat while at anchor, it tends to help you be more choosy regarding large purchases.)
Costs Of Living At Anchor
Obviously living at anchor is going to cost you less than living in a marina. However, consider the non-financial costs before you make the commitment to live solely at anchor. There is an element of solitude when living at anchor that may not fit well in a social lifestyle.
Also, it is undeniably more work to live at anchor. You are at the mercy of the weather and may find yourself having to move your boat often to find shelter from weather conditions. It’s difficult to have a vehicle when living at anchor, so getting around is usually by foot or public transportation.
You will regularly likely find yourself visiting marinas even if you live at anchor full time. Getting your holding tank pumped out generally costs between $5-$10 per pump-out. Filling your water tank can be costly depending on your location. In the Bahamas we paid as much as $1.00/gallon to fill our tank. In the Florida Keys we have paid as much as $0.20/gallon . Fuel costs are also something to factor into your monthly budget.
Insurance Costs
Your health and life insurance costs may change once you retire. Just as with the rest of the items in a budget, this cost varies greatly from person to person. You need to speak with your insurance company about what sort of rate changes you may have after you retire and move aboard your boat.
Your boat will also need insurance and that cost is dependent upon the type of insurance you choose and the amount you choose to insure your vessel. Some marinas require upwards of $300,000 liability cover for liveaboard vessels, so keep that in mind when creating your retirement budget.
Owning Vs. Loaning
If you’re able to purchase your retirement boat with cash, you will have one less bill to pay after retirement. It’s not feasible for everyone, but purchasing your boat in full without needing a loan is clearly a better move if you’re trying to keep your costs down after retirement. There are many, many boats on the market currently, at a huge range of prices. If you look long enough, you will find a nice, affordable used boat that will hopefully be within a price range that will not require you to take out a loan. The less debt you’re paying after retirement, the longer your retirement money will last.
Income After Retirement
If you’re able to earn some form of income after retirement, it will have a positive impact on your budget.
Working Online
I’m not talking about a full time, or even a standard part time job. But there are many, many online work opportunities which only require a few hours a week and every dollar earned is one less spent from savings.
Online work is a great option for most boaters. Marinas usually have wifi these days, although the strength of the signal can be pretty spotty. It’s possible to get a decent wifi connection using your cellphone as a hotspot, and many companies sell mobile hotspot devices. Having any amount of supplemental income will help your retirement savings last that much longer.
Passive Income
If you’re able to create passive income prior to your retirement, you can retire earlier with greater peace of mind. There are many passive income possibilities out there which can be found through a quick google search. Renting out your current home is always a great source of passive income. Many cruisers find YouTube content creation to be a lucrative method of income. Even cryptocurrency investment can lead to income after retirement. Although it’s called ‘passive’ income, there is usually some work involved to begin seeing earnings.
How Much Money Do You Need?
There is no easy answer for how much money is needed to retire on a sailboat. It’s different for every sailor. I think it’s really important to have a clear understanding of your needs versus your wants. We all know that we need food, water, and shelter for survival. However, in order to maintain a healthy mental and physical state in life, we find there are additional needs for us to survive.
Some people need alcohol. Some people need to shop. Some people need to have dinner with friends. Be honest with yourself and recognize that the things you ‘need’ in your land based lifestyle aren’t likely to change just because you moved onto a boat. Create an honest budget for yourself.
Don’t Wait Too Long
Even though it may seem intimidating to let go of your land based lifestyle and move aboard, try not to wait too long to make the transition. Adventure is out there, but the older we get, the more difficult it becomes for us to get out there and enjoy it. Be brave. Don’t let your fear of the costs stop you.
