Irresponsible? Silly? Stupid?

Littlewillow

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Having worked all my life I blindly put away a few bob each week into AVCs and eventually ended up out of work at 58 because of redundancy. Now I work part time and earn about 300 each week. My partner is a sole trader and earns about €300 each week. On this money we seem to have a nice although simple lifestyle and manage a few holidays each year as well as a few meals out and a few concerts over the year.

Over the years I saw a number of former colleagues reach retirement and fall into ill health soon after. Some friends too met the same fate. Some others passed away. I'm now 60 have no debts, no mortgage and a smallish pension pot of 320k sitting in a BOB with Irish Life in a lifestyle strategy pension fund. We own our home. My partner and I have about €35k emergency fund which we can access any time.

I'm in good health and was thinking of cashing in my chips - taking about 80k as a tax-free lump sum and putting the rest in an ARF or some other investment vehicle and touring Europe in a motorhome for a year or two with my partner. We intend to rent our house during that time and expect an income of about €1200-1400 a month. I'm no financial wiz but believe the rental income, topped up by another €500 to 600 a month (drip fed monthly from either the tax free €80k or a combination from the ARF) is more than adequate for our needs while living in the motorhome.

We also discussed downsizing and at a guess would have another 80-100k left over at some point after the sale of our current home which may or may not be sold before we go away.

So if we leave in 2020 on returning I think we'll need an income near to 26k from 2022 (we will then be 62 and about 5 years from state pension which we both qualify for). We think we may not have the same level of outgoings because our house will be cheaper to run and we intend to use only one car as opposed to two. We also expect to get rid of our landline and broadband fees as our phones can fulfil the need for email, streaming, etc.

We are not too concerned about leaving anything - other than our home - by way of inheritance to our two adult children.

What do people think? Are these the dreams of a delusional dimwit or is it doable?
 

moneymakeover

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585
Makes sense

And if you rent out your house at least it will be lived in (and looked after)

If you sell, and buy on return, that seems bit stressful ie where prices will be
 

Leo

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We intend to rent our house during that time and expect an income of about €1200-1400 a month.
That after tax take along with the costs of appointing an agent to manage in your absence, RTB, etc.? Make sure you get up to speed on notice periods that will be required in advance of moving back into the property.
 

elcato

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Sounds like a great plan. Be aware that there will be some tax implications on the rental income but should keep you in the lower 20% rate. Also I would do the downsize in one go or as little a timeframe differance as you can. You don't need the hassle of worrying about house price fluctuation in between buying and selling.
 

Gordon Gekko

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At age 65, there is a 50% chance that at least one spouse will live at least 25 years.

Worth considering for all the talk of premature death.
 

so-crates

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Sounds like a good plan to me. Very jealous :) Do your homework first but by the looks of things you already are. As for your pension fund, most people in this country will have considerably less in their fund at retirement.
 

lledlledlled

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319
Sounds like a class idea. The very best of luck with it.
Be sure to check in with us on your travels and let us know how the plan is going.
 

NoRegretsCoyote

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Beware notice periods on the new tenancy laws.

It may be more effective for you to airbnb your property than formally let it.

Two years sleeping in a van is a very long time.
 

Tintagel

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Touring Europe in a motorhome could be a nightmare. A lot different to a week away in the sun and could prove a very expensive option. You could head down to Portugal and rent somewhere cheap. Use it as a base to visit other places. Flights are cheaper than petrol and toll roads. Also up to 40% discount on rail travel when you are 60 years of age.
 

Cervelo

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482
One thing that stands out for me is the €2k a month traveling budget
That works out at about €65 a day which to me seems to low
I haven't had any experience of touring in a motor home but have done a lot of road trips in Europe and USA and a rough budget for the two of us per day when you factor in everything is around €250 per day
I know traveling in a motor home will cut out some of the costs that I would have but have you factored in everything
Can you give us a breakdown of your budget ??
 

Littlewillow

Registered User
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15
Yes we have looked at that and are aware a couple can get by in Ireland on both pensions assuming a 'simple' lifestyle but on one state pension this is far more unlikely. As I've said this is a plan we've arrived at while observing how retirement plans have been scuppered because life got in the way. It's a big gamble, so Gorden Gekko, you reckon it is irresponsible, silly and stupid?

One thing that stands out for me is the €2k a month traveling budget
That works out at about €65 a day which to me seems to low
I haven't had any experience of touring in a motor home but have done a lot of road trips in Europe and USA and a rough budget for the two of us per day when you factor in everything is around €250 per day
I know traveling in a motor home will cut out some of the costs that I would have but have you factored in everything
Can you give us a breakdown of your budget ??
I've been doing a fair bit of research by following blogs of those who are travelling around Europe in a motorhome. They all seem to agree on a budget of similar amounts. Most of these however, don't stay on campsites too often and opt for Aires and wild camping. Do you also think the plan is silly and not 'doable'?
Touring Europe in a motorhome could be a nightmare. A lot different to a week away in the sun and could prove a very expensive option. You could head down to Portugal and rent somewhere cheap. Use it as a base to visit other places. Flights are cheaper than petrol and toll roads. Also up to 40% discount on rail travel when you are 60 years of age.
Thanks Tintagel. The point is to travel around in a MH rather than renting a house or apartment. That for us is the appeal.



Sounds like a great plan. Be aware that there will be some tax implications on the rental income but should keep you in the lower 20% rate. Also I would do the downsize in one go or as little a timeframe differance as you can. You don't need the hassle of worrying about house price fluctuation in between buying and selling.
Beware notice periods on the new tenancy laws.

It may be more effective for you to airbnb your property than formally let it.
Yes we will brush up on tenancy laws and will also see a financial adviser before we commit.

I remember reading a piece here on AAM a few years ago by Bronco Lane who coined the phrase "living off the spray" and it stuck with me. I wonder do the numbers add up for us (€320k next egg plus a possible €100k gain from the sale of our house to a smaller house) and how long we could keep going after we come home - bearing in mind we will then have about 5 years to our state pensions?
 

Gordon Gekko

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What about unforeseen medical expenses or nursing home expenses down the line?

And what about inflation, i.e. the risk that your income doesn’t enable you to even maintain your standard of living?
 

Littlewillow

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What about unforeseen medical expenses or nursing home expenses down the line?

And what about inflation, i.e. the risk that your income doesn’t enable you to even maintain your standard of living?
We will always pay for private med insurance but feel we can't let all unforseen events stop us. As for inflation and running out of money these are questions I don't have the expertise on and hoped posting here will lead to enlightenment. TBH I've already done my fair share of "what if..." but Gordon Gekko you're bang on - these are legitimate concerns.


Go for it, travel while you can; there's no pockets in a shroud.
Thanks Thirsty I just want to make sure I can afford the shroud
 

Feemar5

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Regarding nursing home fees if you have money and property you pay - if you don’t the state will pick up most of the cost so enjoy traveling while you can. Enjoy!
 

Saavy99

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Little willow, I think it's wonderful idea and you have done your homework. You don't need to come on here for advice because by looks of it you have always been prudent. I doubt many people live to 95 and if they do, they stuck in rocking chair and probably 'doting'. You still young and healthy and you have the money and time to embark on the adventure of a lifetimes. Enjoy and please note a huge chunk of the population wouldn't come near your nest egg on retirement. If I recall from previous threads, the average private pension in Ireland is less than a 100 euro a week! That wouldn't take you far!
 

Bronco Lane

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376
I remember reading a piece here on AAM a few years ago by Bronco Lane who coined the phrase "living off the spray" and it stuck with me.
And I still am. But with two state pensions and a small private pension. Also some savings to back me up.

I am nearing 70. I still travel quite a bit (nearly every 6 weeks or so) but only for a week or so at a time. I need to touch base back home, I like Ireland. Sometimes you can overdose on beauty and need to get back to boring and plainness and to recharge. I find I don't have the energy that I used to have, something to think about.

I like my garden. I like growing my vegetables. I don't smoke. I drink very little and I am happy with simple home cooked food. I can live on my above income. Neither myself or my wife need to spend money on clothes/new kitchens/cars/fads etc

I can also downsize if needs be but if I do this I will be just adding funds to my existing pot of money, that I am not really spending.

I have about 5 road trips planned between now and next year. I have already done two this year. France and Austria. I use public transport when travelling abroad. I have noticed that prices abroad have increased.

It's funny but we start each day by saying "Well we have €70 of our state pensions to spend today". I can assure you on our recent Austrian trip we needed this. Back home the bills are pretty relentless. You cannot get away from "fixed charges". You cannot tax your car for a month at a time, avoid the relentless health insurance increases, the cost of getting any handyman in to do a job has gone through the roof. There is also the paperwork to deal with. How will you deal with this when travelling through Slovenia? Where will this paperwork be posted to, if you rent out your home?

If you want to travel in a motorhome for two years I would go for it but I would break in to it gently. Maybe start off with the obvious France and Spain for a few weeks each time before doing the big trip.
 

Cervelo

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482
Do you also think the plan is silly and not 'doable'?
On the contrary, I think your plan is doable in fact I think its very doable, from your OP you seem to indicate that with a few little life adjustments that you can live the life you want quite comfortable on 2 state pensions and until they kick in you have savings, pension fund and a property that can be rented or downsized to provide further funding.
Whether its "silly or stupid decision is a question that really only you and time can answer, I would say go for it you've got nothing to lose except regret :)
 

Littlewillow

Registered User
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15
Little willow, I think it's wonderful idea and you have done your homework.
THanks Saavy99 but I haven't really ran the numbers - I'm pretty poor at that kind of thing.

And I still am. But with two state pensions and a small private pension. Also some savings to back me up ... If you want to travel in a motorhome for two years I would go for it but I would break in to it gently. Maybe start off with the obvious France and Spain for a few weeks each time before doing the big trip.
Glad to hear it and I imagine this is a busy time for you sowing courgettes, carrots, peas, etc. It's funny how time starts to run out in late May early June for veg growers! The "spray" I'll be living off will not be as abundant - no pensions yet. This is where I'm a little worried. From what I can gather I can manage living in the MH (motorhome) on the rent from our house and I will have a little emergency money but bridging the gap after we return to the receipt of our state pensions is a little complicated. Looks to me like I have to take 80k as tax-free lump sum. Place 63,500 in an ARF - untouched - until I'm 75 and draw a minimum of 4% from the remaining €175/180k. Back of the envelope calculations indicate we may have about 90k before we get the state pension excluding the money locked away til we are 75. And yes you make a good point re trying it out in small steps first. We plan a few "shakedown" trips to familiarise ourselves with the lifestyle and the vehicle.


Whether its "silly or stupid decision is a question that really only you and time can answer, I would say go for it you've got nothing to lose except regret :)
Yes but with the various opinions here I can make a more informed decision - I think
 

NoRegretsCoyote

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1,403
I've been doing a fair bit of research by following blogs of those who are travelling around Europe in a motorhome. They all seem to agree on a budget of similar amounts. Most of these however, don't stay on campsites too often and opt for Aires and wild camping. Do you also think the plan is silly and not 'doable'?
In the winter you have to chase the weather, so you have to go south.

Do you really think you'll enjoy spending your days at truck stops in southern Italy? It won't freeze, but when it rains and it's 8 degrees outside you will probably regret not having a home to fly home to.
 
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