If you’re over 55 years old, you’re facing retirement and likely trying to calculate how to fund the lifestyle you want. Studies show that almost a third of Baby Boomers have no savings to supplement their social security income in retirement.
With the average social security monthly benefit amount around $1,300, it’s easy to see that there’s an alarming shortfall if you’re not sitting on a paid-off mortgage or considerable home equity. With around 10,000 boomers reaching retirement age daily, there are significant financial challenges for many.
A Vagabond Lifestyle on a Social Security Income
If you are sitting on a lot of home equity, you can take the reverse mortgage route, but if you wanted to travel or not remain in your home, that would not work for you. If you aren’t sitting on a ton of equity, or if you sell and put that equity into savings for retirement, you aren’t going to see a huge monthly income boost with interest rates under 4%.
Even if you sell your home, you’ll also have rent or another mortgage because you have to live somewhere. How about a lifestyle that allows you to travel a lot, stay when and where you want for as long as you want, and not have property taxes or landscape maintenance costs? Many are choosing to RV fulltime rather than subject themselves to the overwhelming cost of renting or home ownership.
The RV Lifestyle
Consider using some of your home’s equity to buy a recreational vehicle or put a significant down payment on one for your future home on wheels. The choices and price ranges are enormous, and a couple can spend anywhere from $40,000 to a half-million dollars or more on a towable or motorized RV.
Buying used is a wise choice, as the drive-away depreciation in value is considerable. Often you can do much better buying a two to five-year-old RV, and you can get financing if you need it.
What about that vagabond lifestyle? You can be in a warm climate in the winter, a cold climate in the summer, and generally, always be in a place of natural beauty and great activities.
According to the RV Industry Association, in 2018, between 750,000 and 1 million retired people lived full time in RVs. Many do so because it can be less expensive than the cost of homeownership, but just as likely, they love the freedom of the RV lifestyle.
One common thread when interviewing full-time retired RV owners is that they like the fact that your neighbors have different perspectives on interaction. They aren’t really concerned with who you’ve been or what you’ve done in life. They’re more interested in discussing where you’ve been recently and where you’re planning on going next. Often you can make friends and set up annual meetups in favorite seasonal RV parks.
How Much Does It Cost?
The full-time RV lifestyle can be as inexpensive as under $1,000/month if you own the RV outright, or costly with RV payments and expensive choices for RV parks. One thing that can dramatically reduce the monthly cost is not moving around as much. Daily and weekly RV park space rates are much higher than monthly rates. Some retirees are only moving two or three times each year, paying monthly rates and enjoying an area for a full season.
With some RV spaces as inexpensive as $275/month plus electricity, there are mountain getaways, some with natural hot springs nearby. On the other end, a waterside space in Florida in the winter can easily be more than $1,000/month plus electricity for that 40 x 60 space.
The most common price range for a monthly space in nice areas seasonally is between $450 and $650 per month plus electricity. Propane for heating and cooking is your cost as well. However, water and sewer, as well as WiFi, are included in many parks. Nicer parks often have swimming pools, fishing piers, activity buildings, and events.
It is often expensive to relocate, as RV fuel expense is high, whether towing or driving a motorhome. Breakdowns can be costly unless you purchase coverage from one of several specialty RV travel insurers.
They cover towing, flat repairs, and even replacement lodging during repairs in some cases. Adding all of this up, it would be tough to say that you can enjoy the fulltime RV retirement lifestyle for less than owning a home or renting. It isn’t impossible, but it takes planning and care.
If you want to be hiking fresh mountain trails in the summer, and enjoying a southern lake or the beach in the winter, it’s possible to do so for the same monthly cost as rent if you plan well. There are even 55+ RV communities dedicated to enhancing the retirement lifestyle. Check out the “Texas Riviera” on the Gulf Coast for a lower-cost alternative to Florida in the winter. It’s warm, and there are retirement RV communities all along the coast.