Costs of living full time

My wife and I will be retiring in a few years. We currently rent and will need to move out of our home at that time because it's employer provided. We are looking at a slightly used (3-4 years old) good quality Class A to live in when we retire or even sooner. We have excellent credit and it looks like my credit union will loan us $100,000 at 3.99% for 180 months (15 years) on a 2011 or newer model RV. Our monthly payback would be $739.19/month. This plus insurance plus RV park fees ($400-$600/month?) would put these expenses at around $1,500 per month max which is very doable for us. In addition there will be our usual living expenses of course plus the extra expenses of RV maintenance and fuel. We are expecting about $6,500/mo in income (before tax) when we retire. Any insights on this scenario? If it wise to borrow this much money for a high end Class A? We have children and family in about 3-4 areas of the USA and we would spend 3-4 months here and there in the RV. We would stay away from cold weather areas in the winter time.

I would urge you to not start out spending that much on an RV since you have no RV experience. You really should buy something around $20,000 and use it for a year and then see if you want to invest that much money in an RV. Very few people get their first RV purchase correct. You need time in one to find out exactly what you want. If you start out with a $100k unit and find it is not the right one or that you do not enjoy RV living then you will be stuck with a very large payment and if you resell it you will take a massive loss. I suggest starting with something like this to limit your losses if it doesn't work out:

https://www.pplmotorhomes.com/used-rvs-for-sale/class-a/2004-gulf-stream-ultra-supreme_rv-36180

Tom is giving you the correct advice.  Buy a $20 or $30K bus first.  Use it for one year and make a list of likes and dislikes.  Floor plan is going to be one of the most important aspects of your final purchase.  You will likely be able to sell it for what you bought it for so you will be out nothing but an entire year wiser and experienced.

My story:

Prior to retirement (2014) we purchased a 2000 Itasca Sunrise $22K.  Used it for 1 year, removed the old brass bling and replaced it with nickle finishes, changed both TV's from Tube to flat screen, changed out the old grandma valances - I retired in 2015 and we bought a 2015 Itasca Suncruiser $98K - sold the 2000 Sunrise for $24K (about even after updating expenses).  Kept the 2015 Suncruiser for 1 year and traded it in on a 2015 Itasca Meridian - traded the Suncruiser for $105K - yup $15K more than we paid for it and we had used it for a year.  After two years of experience we knew what floor plan, what finishes, what platform, what chassis (diesel w/ air brakes and air ride) etc... we wanted.  The 2 years of experience came at no cost but was absolutely priceless. Wade in the water before you dive in, it will be a lot better experience all the way around.

The Gulf Stream Tom listed is as close to our 1st Sunrise as I have seen.  That or one very similar is exactly what you should buy, and buy it now not after you retire.  Also your monthly insurance you listed you will find to be extremely high.  We pay $800 per year but we have full coverage on a 2015 Itasca Meridian.  A 2004 Gulf Stream will be dramatically lower and when you go newer you could expect around what we pay.

Flat out motor homes are the absolute most expensive way to RV there is.  Add the fact that when there is a break down you will be stuck in a motel until its fixed, they simply make no sense for lots of folks.  For 50K you for example could buy my low miles dually truck and loqded 36 foot fifth wheel. 
Used is by far the way to go, but spending that much is not a smart move.  If you were to spend that 100K on that MH and next year realized the mistake, selling it you could loose thousands of dollars.  Can you aford that?

I guess I should also answer your basic question.  2K a month is not unreasonable.  As is 5K a month.  It depends on a lot of factors.  Insurance, both vehicle and health, food, clothes, fuel, maintenance, upkeep, parking fees, whether you volunteer camp host or how long you sit in one place.  Nightly fees can eat you alive.  But monthly fees in the same park usually are far cheaper.  There simply are too many variables to give you a definitive answer.  But it will never be cheaper than living permanent in one place unless you look at some larger metropolitan areas where no one but thw rich can aford to love.

Do not leap into that deep end of the pool until you know if you can swim, and like it. Rent, buy cheap and old, whatever you must do, because even if you absolutely love it, 6 months in you will know what you WISH you had done.

You should be just fine retiring with a $6500/month income. Many do it on far less. Without knowing if you have camped much before or ever had a small TT or MH, it might be a good idea to rent one and head out on a two week trip. My wife and I did pretty much the same thing in 2014...loved the two weeks and decided to go FT and have never regretted the decision.

Paying cash for a coach is always the best. Financing a coach at 3.99 is not a bad idea especially if you have investments earning more. But moving from one rig to another frequently is not normally a good idea. I think if you approach your acquisition correctly and walk through a ton of coaches and utilize the various forums available for helpful information, you should be able to purchase a coach which checks off all your boxes and at a price you are comfortable with. And then...well just enjoy the journey!

What part of the country are you in?  If your winters include snow and sub-freezing temperatures, you won't be happy living in an RV through them if you're forced to stay there until you retire.

Are your job(s) something you could convert to telecommuting?  Internet access is close to ubiquitous and there are many people successfully working on the road.  Maybe you could make the transition now instead of waiting until retirement?

I agree with previous comments about buying something less expensive initially.  First, if you've never RV'd then you really don't know what you want or need.  It requires living in one for a while to get a sense of what you like and/or dislike.  Meanwhile, do lots of looking and make notes about what you think you'll like/want/need and what you don't like/want/need.  Lists are your friend when RV shopping and they might change as you progress from one stage to the next.

Second, it's better to have minimal debt as you enter your retirement years.  We've seen some unfortunate examples where people bought a really nice motorhome, lived in it a few years and then something happened, either financially (like a 401K dropping in value) or a health issue (stroke, heart).  Some of these people struggled because they could no longer use their  motorhome which was "underwater" - they owed more than the amount the could get selling it or the bank wouldn't take it back.  For this reason, I always recommend paying as little as possible and getting something affordable until you have a better idea of what you need and can afford.

By the way, if you decide to get one before retiring, make sure you have a place to park it until you're ready to move into it full time.  Many communities have parking ordinances or CC&Rs that prohibit certain types of parking, whether on the street for a limited time or behind a fence to "hide" it from neighbor views.

ArdraF

Good comments by Ardra, although we don't subscribe to the "buy a cheap one, then upgrade to something you really need" advice of several folks. We shopped hard before buying each of our two motorhomes new. In each case, after sufficient looking, we had a pretty good idea of what we needed (down to make/model/floorplan/options). We kept the first motorhome 15 years, and our current one 14 years, with no intent to replace any time soon.

Our experience might have been different if we were fulltiming, although we spend several months at a time in our current coach. The only "mistake" we made, if you wish to call it that, was that we really wanted a vanity/sink in the bedroom of our current coach, and that's what we bought. It turned out that we've never used that vanity, and my other half was using the sink as a storage area. So, I bought some Corian to match other countertops, removed the faucets, and covered the sink so it looks and acts like a countertop. We've never felt the need to change our current coach because of that small vanity.

Being debt-free at retirement was a good strategy for us. We were fortunate to have paid cash for our high-$$$ possessions. This is not possible for everyone, and some/many folks have to deal with debts. Over the years, we've seen many forum members retire, sell their stick & brick house, and put all their equity into a new/expensive motorhome. Somewhere down the road, one of the partners became seriously ill or, worse, passed away.

We went fulltime a year before I retired from the AF. Didn't really think about it much, just did it. The government was demolishing our onbase house so we just found a CG off base and moved. We had a 37' triple slide 5 th wheel. After retiring we went to Florida and parked in the inlaws  driveway a few weeks until I started training for a job out of Antlanta, GA. Job took us to middle TN and after 6 months decided I didn't like that so we picked up and moved to Gainesville, FL where I became a fulltime student. We fulltimed for 5 years and enjoyed every minute of it. Traded that lifestyle of one working for the Federal Government and traveling even more than we did when I was active duty. We never really planned much for any of endeavors. My wife didn't know I joined the AF until I came home one day and said I was going to basic. That lasted 24 years. We didn't plan on fulltiming but circumstances dictated it. We just threw our clothes in and headed out. We are not planners. We like to do things spur of the moment.

24 years isn.t exactly "spur of the moment".>>>D

Utclmjmpr said:

24 years isn.t exactly "spur of the moment".>>>D

Click to expand...

Yeah, the 24 years wasn't but the decision to join was. Never really thought about it, just did it. Like when I worked for the DoD I got a call or email don't remember,  asking if I wanted to work in England. Called the wife and she said "Yeah"". So we moved to the U.K. For 5 years.

To the OP- you say your monthly income will be $6500/month? Please keep in mind many here don't make 1/2 that while they're working. $6500/month would be like being a millionaire to a lot of people. Please don't think I'm faulting you in any way, I'm just saying people can get by with a lot less. It all depends on lifestyle. Once I retire, DW and I are selling the house. The profits go into an "emergency" fund. We will be able to live very comfortably on $2000/month, but we don't drink alcohol, I'm pretty much done smoking, we don't do movies, we don't have to have two unlimited phones, and an unlimited hot spot, satellite television, not making payments on something we don't need just to impress people we don't like, etc. Nothing wrong for folks that do, it just takes money. Your budget is essentially what choices you make.

We retired in similar circumstances and borrowed even more than that for a luxury class motorhome.  You seem to have managed your financial life well, so I see no issues with what you propose.  There are always risks with a large debt, but if you have contingency plans for unexpected health problems or an early death, you should be fine. As part of that, give some thought to an "exit plan", how you will eventually get out of the RV when you can can or want to make it your home. Just parking it and keep on living in it is one option but may not be practical if your personal mobility suffers.

As for buying in cheap and upgrading, that works best for those who do not think through their wants & needs well in advance.  Newcomers to RVs are prone to underestimating their need for living space, bathroom convenience, storage, etc., but if you go for a larger and nicer coach to begin with, those risks get much smaller.  A mid-tier diesel pusher would be well-equipped and reasonably roomy, with decent storage inside and out. and would drive comfortably wherever you want to go.  I'm thinking that $100k for a 2011 is a little light for that, though.  If the $100k is paramount, I think you need to be looking at 2005-2009. If 2011 is the oldest, than a budget more like 125k-150k would get you into a rig that is likely to be suitable for your lifestyle.  That's all inference based on your income, though.

Unlike many, I'm with Gary on this. New or higher end used can, for some folks, be the best route -- the advice isn't necessarily "one size fits all." But research carefully (including reading the opinions in many, many posts about the subject on this site), rent a time or three, visit all the RV dealers and/or shows that you can before deciding.

You ARE talking used.  VERY SMART!  However, as Gary said get a mid grade RV, not an entry level, less expensive, less quality components.  Even if the price is similar, an 8 year old Lexus or Mercedes is usually a better long term buy then a 4 year old Ford or Buick.

For a $100,000 budget, I'd be looking at a slightly used 1 ton pickup like an F-350 diesel and a nice 5th wheel that was a few years old.  That would eliminate the need to tow a car and keep the maintenence down to one drive train.  You could probably get a pretty nice setup for around 80-90K.

Your plan sounds doable to me.  Find something your DW and you like it.

We're probably similar in circumstance to you. We are in our thid rv and have been for nearly five years. You could probably find a comparable unit for around $100k but I don't recommend it. We have been satisfied with both of our full time motor homes, but we learned a lot about the small things that matter  in our first one; the importance of counter space and closets, and tv location for example. That one was bought three years old for $45k and traded at a similar value when we bought our current rig.

We spend around $6, 500 a month but could easily reduce that by enough to make payments at the level you plan if necessary (we paid cash). I will caution that expenses are not level. One stop at a Freightliner servic center (Gaffney SC -highly recommended) resulted in a $$3, 500 bill for example and a set of tires was nearly $3, 000. These have been our only exceptional expenses over 5 plus years and are reflected in our monthly costs. You should easily be able to manage on your budget especially if you have a reasonable emergency fund (hopefully not in the form of credit cards).

Good luck,

Ernie

I am not going to commment on the "Initial Investment" but will on the recuring costs
This is based on being "John FROM Detroit"
Both my House (Most recent appraisal before I moved out) and my motor home the "Sticker Price" was dang near identical.. (Within 10%)

THe house I paid over 3,000 a year in taxes.. The Motor home less than 500
The house I paid 200/month or more in Gas and ELectric.. The motor home.. Read on
I paid about 100+_ for telephone/internet (Still do only it's cellular now)
I paid about 50/month for water and sewer

The RV.. I have two campground memberships so for six months (Summer) I switch back and forth every 2 weeks, keeps engine lubed, exercise for me,  and pay less than 100/month for "Rent" includes Water, Sewer and Electric.. I do buy propane.. if I use any.

WInter.. I still payu the same 95/month for the memberhsips but 104 to 150 for my "Week out" (2 in one out) as only one of the parks exists here in SC. Still most "Week out" months I"m only about what I used to pay for gas and electric, add in water and sewer (Included in site rental of course) I'm saving money, EVERY MONTH.

FOlks talk about how much gasoline this House on weels eat.. Well 2500 tax savings buys a LOT of gasoline. That's all I can say.. Plus I have friends all over the place. and I get to see things I could not, and.. One more thing.

THe neighborhood I moved into in 1978.. Nice, good neighbors (Well one was a deadbeat but the rest were good. .. He got replaced by a fireman)  But over the years I lived there it kind of went to... My next door neighbor I turned into Narcotics division, Re-bagging Marajuana from bulk to "Dime" bags wile I stood there watching, wearing a State Police varsity jacket, waiting for the Shuttle driver to take me to the dealership to pick up my car.

Just before I left the house got shot up (neighbor's house that is) and firebombed after I left.. Let's just say I was happy to get outta there

With the RV I get in a neighborhood like that.. I just keep on truckin.