Category Archives: Retirement

Electric Cars update

We love our Tesla S. We have driven to San Diego and back twice now. The car is so quiet and smooth, it is like taking a trip in a music room.The car can be setup to charge late at night when electric rates are lowest. We find we do not charge the car but a few times a week if that.

After getting the Tesla, we hardly ever drove our Subaru, which was our workhorse. We decided to replace the WRX with another electric car, clearly not a 2nd Tesla (waaaay to expensive), but rather considered a Fiat 600e. They are a cute small car for zipping around town, or so I thought. The test drive was a big disappointment. Coming from solidly built moderately fast cars, the 600e felt like a tin can with a undersided motor attached. It did nothing particularly well. Acceleration, handling, braking were all fair. There happened to be a Nissan dealer just down the street from the Fiat dealer and we test drove a Leaf. What a difference. The leaf is a real car, acceleration and braking are good (though the car’s torque steer on hard acceleration was a surprise), handling is better than average. After crunching the numbers, we found the leaf is actually affordable.

Perhaps many people do not know about the incentives available for electric car purchases. Until California discontinues the program, the state will mail a check for $2,500.00 to anyone who purchases an electric vehicle. The federal government provides a $7,500.00 tax credit for the purchase of an electric car. Being a tax credit favors those who owe over $7,500 in taxes, not the best plan to further electric car adoption nor is it equitable. Still that is $10,000.00 back from the government against the purcahse price of the car. Then the manufacturer provided a $2,500.00 rebate AND the dealer whacked another $4,000.00 off the price of the car. Sooooo, a $34,000.00 new automobile’s price came down to $17,500.00. The 2002 Subaru sold for $7,500.00, which results in a net cost of $10,000.00 for a brand new car. To top it off, the dealerl provided financing at ZERO PERCENT! No cost to borrow the money. And the kicker?? It’s an electric car that can use the HOV lanes in California. There’s nothing quite like zipping past traffic in the HOV lane. As more people car pool and more EVs come on the road, the HOV lane will eventually be just like any other lane, but that’s a good thing for progress/the environment.

The leaf is not a Tesla. It has an 80mi range, which can be extended by driving slowly. It works well for short trips and with the availability of fast chargers, the car can be recharged in less than an hour when necessary. There have been a few instances where the car could not make it home without a charge. Finding chargers in the greater bay area is no problem, though it does require planning ahead to be sure you can actually get to the charger.

I’ve recently put roof racks on the Leaf to carry kayaks for touring local waterways. We’ll see how having limited range and added wind resistance works with kayak trips.

 

Ron

Many Moons Pass

Our retirement plans are moving along quite well.

We sold our house and moved a few months ago. We both had mixed feelings selling. Our house was “perfect”, with a designer gourmet kitchen, a newly remodelled bathroom, and lots of french doors and windows. We were within walking distance of two small downtown areas with fantastic restaurants, an exercise facility nearby, and had good access to SFO and SJC. We had hoped to sell to a family who would enjoy our home as we had. We did have a number of qualified families present offers, but an investor’s all cash offer trumped everyone.

We are settling into the North Bay; and finding good restaurants and shops locally. Few are within walking distance. We do have an exercise failitity near by.

We are now planning two trips to Europe next year. I succumbed to Seabourn’s marketing onslaught and contacted a travel agent who books Seabourn cruises. We will take a cruise from Istanbul to Venice by way of a few Greek isnands next spring.

The Itinerary is facniating

0 Istanbul, Turkey VX 04:00 PM
1 Myrina, Nisos Limnos, Greece TR 10:00 AM 05:00 PM
2 Mykonos, Greece 08:00 AM 06:00 PM
3 Kusadasi (Ephesus), Turkey 07:00 AM 11:00 PM
4 Patmos, Greece 08:00 AM 06:00 PM
5 Rhodes, Greece 08:00 AM 06:00 PM
6 Thira (Santorini), Greece TR 08:00 AM 05:00 PM
7 Piraeus (Athens), Greece 07:00 AM 04:00 PM
8 Monemvasia, Greece TR 08:00 AM 05:00 PM
9 Katakolon, Greece 08:00 AM 06:00 PM
10 Nydri, Nisos Lefkada, Greece TR 08:00 AM 05:00 PM
11 Kerkira, Corfu, Greece 08:00 AM 05:00 PM
12 Dubrovnik, Croatia TR 08:00 AM 06:00 PM
13 Triluke Bay, Croatia TR 08:00 AM 05:00 PM
14 Venice, Italy 07:00 AM

We will explore Venice for three or four days then take a train to Florence for four of five days.
Cruises are not my preferred method of travel because you are forced to conform to the ship’s itinerary and come and go based on the ship’s arrival and departure at port. We enjoy finding those special places off the beaten path and spending more time there and less at tourist traps. Still there is no better way to get the flavor of coastal ports, to see a number of diverse destinations, and find some special places, than on a cruise. Seabourn is an all inclusive cruise line; there will be no unexpected additional fees for drinks on the cruise though Seabourn shore excursions are extra. My reading suggests that Seabourn’s shore excursions are typical and no better than you can book ashore (but ahead of time) and can be more expensive.

I will use VRBO or homeAway to book lodging in Venice and Florence.

I was planning an additional four weeks in Italy taking the train from Florence to Cinque Terre, renting a car in La SPezia and driving through Tuscany (Sienna, San Gimignano, Piza), checking out Monte Argentario, and on to Rome. My wife thought it better to do this trip in September to avoid the heat and crowds. As it turns out, she is correct and I’ve dropped this leg of our spring trip. More about this in a later post.
We will arrive in Istanbul a few days ahead of embarking on our cruise. Istanbul (Constantinople) is at the crossroads of East and West; Europe and Asia, the Black Sea and the Mediterranean Sea. It is one of the most historic cities on the planet and one of the most diverse I expect. We plan to walk the city and visit Istanbul’s bazaars.

I am researching the cruise destinations and shore excursions: where would it make sense to hire a local driver, where is it best to rent bicycles or a car, where is a day hike a good idea, what local foods are not to be missed. There are a host of things to know about before we leave. We do have plenty of time to learn, perhaps even to learn some Greek and Croatian phrases.

Let the adventure(s) begin, but sadly not this year; not yet.

Plans Accelerating

I’ve been “away” for some time.

We took delivery of our Tesla Model S in February and took an electric road trip to Southern California hopping from supercharger to supercharger. The trip was uneventful. Our car is so comfortable that the trip went by very quickly and the stops were at interesting places or outlet shops. The Tesla is our pre-retirement gift to eachother. The Model S is expensive and not for everyone. It is an amazing car for the first bottom up design coming from Tesla.

There is nothing quite like plugging your car in in the evening and having a full charge in the morning. No more stops at gas stations. No more smell of oil and/or gasoline. There is no noise as the car accelerates (practically none) and with regenerative breaking I hardly ever use the breaks to stop. Well done Tesla! There are other electric cars “out there”. I think the Fiat 500e is a good choice for around town, though it lacks the Model S’s range, power, speed, or stunning lines. Still I am so taken by the electric “revolution” that I may just look at a Fiat to replace my other car. Waiting for Tesla’s E3 is another option though.

Local financial circumstances are conspiring to accelerate our retirement plans. My wife will quit work this year and I won’t be that far behind. Once we actually dial back work, our travel plans will ramp up. That’s when our website and blog will become interesting and informative. I plan to share our plans here and critique our experiences as they happen and/or after the fact.

I believe relatively inexpensive travel to and withing Europe, Asia, and South and Central America can done without sacrifice. Sure we will not be staying at five star hotels, but that is the point. We will rent an apartment or a home and live as a native for a few months and soak in the culture, restaurants, and sights slowly. Taking our time to get to know some locals and to truely experience what it means to live “there”, and not just visit.

Check out “Home Sweet Anywhere” by Lynne Martin that just came out. Lynne and her husband, Tim, sold “everything they owned” and travelled. Unfortunately Tim did most of the planning and that part of their journey is noticeably missing. The book is a fun light-hearted read. They also posted on a blog during their journey, which I have not read. I do recommend the book. I’ve read about half of the book and I’ve learned three things that make the book worthwhile for me.

I expect our blog, “elder gypsies”, will provide a similar dialog for our travels, but it will include our planning and execution as well as anecdotes along the way. We are so close to leaving our day-to-day responsibilities behind and “sailing off into the sunset”.

Follow your dreams wherever they lead you. Know the difference between your dreams and your reality (aka be aware of your surroundings).

 

Ron

Retirement Phase 3 revisited

We have finalized our order for a Tesla Motors Model S

MyTeslaDesign 01-04-2014-1

Green with tan leather interior, panoramic roof, tech package, air suspension, parking assist, std wheels, 60 kWh battery, supercharger enabled. I could not justify getting the 80 kWh battery, the performance option, or 20″ wheels, though they are dramatic.

MyTeslaDesign 01-04-2014-1a

MyTeslaDesign 01-04-2014-2

We went back and forth between Blue and Green. The blue S charging outside was gorgeous. We did not want a black interior and the gray interior didn’t quite fit. Then a green S pulled in to charge up (charging is free at tesla dealers). It had the beige interior exactly what we initially wanted. That pushed us back to green with tan interior. The tan color shown on tesla’s website is not an accurate depiction of the actual color of the lelather. It is much less yellow in person.

MyTeslaDesign 01-04-2014-3

We take delivery in March at the factory; the old Numi plant in Fremont.

We will keep our two ICE cars for now.

Retirement phase 4: 20 months away and counting.

Attended a seminar last night…

We were invited to a Wells Fargo retirement seminar last night entitled, “Securing Your Retirement, Transforming Social Security into a Winning Retirement Stragety”.

Carleton Pace, our Wells Fargo advisor, suggested we attend and I am very glad we did. The free food and drink was welcome, but the seminar was outstanding. It presented an overview of the options provided by Social Security. Most people think you can take early retirement at age 62, full retirement at 66 (varies depending on birthdata), or wait until 70 when benefits max out. That is all correct.

What most people do not know about: 1. survivor benefits, 2. spousal benefits, 3. filing for SS and suspending benefits, 4. how the benefit is calculated, 5. benefit reductions.

I learned that my wife can apply for social security now and suspend benefits for a few years until I retire and we begin our adventure. For those two years her benefits increase by 8% annually (standard for over 66). When I turn 66 in a few years, I will file for SS and suspend my benefits, Ellen can then collect Spousal benefits based on my SS benefits (which would be 50% at that time). Because we both are at full retirement, any money we earn does not reduce our SS benefit.

Unless and until we need additional funds, we can hold our benefits suspended until we max out at age 70. Alternately and recognizing that women outlive men in most cases, ellen could take her SS benefits at any time while I maximize mine (waiting until 70) to provide her a somewhat larger survivor benefit.

The retirement seminar was presented by BlackRock and sponsored by Wells Fargo. If you are approaching retirement, I recommend seeking out an investment planner to create a retirement plan and understand social security. It will be there for you (and it would be solvent if our politicians had not raided the fund repeatedly over the years).

Disclaimer: I do not work for BlackRock or Wells Fargo and I have no interest in the companies aside from my own personal dealings with them. Their investment stragety is far more conservative than my own; Carleton quoted a 5% annual return year over year. In my mutual funds investments, I more typically see 8% to as high as 60% annually.

Subscribe to Morningstar (they have a web presence), pay for the premium service for a month or two, and research mutual funds. The number of specialized funds is astounding. Morningstar gives you a search tool to narrow your investment target. (again: I do not work for or represent Morningstar, they simply provide optimal information to investors).

Ron

AARP and Bonds

My wife gets AARP’s magazine. It is a mag for people at or near retirement age that has interesting and sometimes misleading articles meant to inform the graying generation. Occasionally there are articles that appear to be written by corporate interests looking to further their own ends. This month’s magazine includes an article, “Future Wealth, Why Bonds Are Still a Good Bet”.

This article suggests that if you re-invest your bond dividends in the bond market as it collapses, your money is buying into bonds that are worth more. Therefore you will do well in the long term. This is the “dollar cost averaging” theory proposed when stocks fall. By continuing to buy into a fallin market, you will eventually buy in at the bottom and make money when the market rises.

But think. If you know that a market is collapsin, why would you hold? Is it a good idea to hold and watch your position lose 30% of its value? How about selling your entire position (or half or 80%) and waiting for the market to drop and turn around. There are risks either way and you will often hear people say, “do not try to time the market”. There is no doubt that the bond market will collapse as interest rates rise which they must do.

It is smart IMO to sell you bond positions now. Move it into a money market fund, CD, or perhaps even the stock market (which should be coming off a sharp decline).

I believe AARP’s bond article is misleading. It will provide cover for the lazy or directionless “investor”; allowing them to feel good about doing nothing as interest rates rise. Me? I sold out of our bond mutual funds months ago.

If you have read through this and do not have a clue, educate yourself. The stock and bond market is the major vehicle for wealth creation in the U.S. It can also be a quick trip to the poor house without some knowledge and/or guidance.

Good Luck, we all many need it. Our government seems incapable of regulating the banks and investment houses. It was the repeal of the glass seagall regulations created in the 1930’s that led to the recent market collapse.

Ron

Retirement Phase 2 continued.

We closed on our retirement home six weeks ago.

We love the San Francisco Bay area and will not move away even though we could retire today if we moved to Arizona or Florida. That we will not do. The joy of visiting the Napa and Sonoma wineries, Lake Tahoe, Yosemite Valley, Monterey, or “the city” keeps us firmly planted here.

This house has “good bones”, but lacks character. It is very bright and airy with 18 windows on the bottom floor and a small but appealing south facing back yard. With tile throughout it is “indestructible” and perfect for a rental home.

Our plan is to rent this house for a number of years before we retire, then minimally remodel and move in. This will cut our housing and tax burden by 60%.

During the past two weeks I’ve posted the house for rent on a number of websites. There has been a slow but steady trickle of lookie-loos, until last weekend. The home will be rented this weekend to a family of four who really like the house. We like them as well. Their situation is not unusual today; to assure their privacy I will not elaborate. I am taking a bit of a risk, but I think I am a good judge of character. We’ll see….

One heads up: to post a rental on Trulia, you must be registered as a landlord not just a home owner. If you are not registered as a landlord, your posting will quietly disappear.

Retirement Phase 2: completed.

Retirement Phase 3: moving to an electric car and (mostly) getting off gasoline.

Phase 4: actually retiring! That is a few years away, but the plan is in place and partially executed.

Squeezed Abroad

A friend of ours is considering retirement in the immediate future. She has come to the conclusion that she will run through her savings if she continues to live in Mountain View. She could move to Arizona or Florida, but she is adventurous and where’s the adventure there? She is considering retirement abroad, perhaps Thailand or Central America.

I’ve recommend www.escapeartist.com to her. This is a very informative and frank website that has ex-pat posts from around the world. It describes “how to” and the pitfalls in retiring in specific countries. There are wide ranging stories, from the joy of re-discovering yourself to the trials acclimating to a new culture. One story I will never forget tells of a guy who pissed-off the government while building a custom home. Construction was a long drawn out process. Shortly after moving in, government agents ransacked the home in the wee hours looking for drugs (or retribution).

I am not affiliated with escapeartist.com and have no reson to recommend them other than I enjoy the information provided. If you are considering moving to a foreign country, look into the information escape artist has available by country.

For example, Costa Rica law provides for squatter’s rights. In most instances, you will have no trouble purchasing property in Costa Rica, but…. If you do not visit your property every other month or have a reliable on site “grounds keeper”, you could lose your property to a squatter. There are even tales of real estate agents using squatter’s rights to steal back properties they just sold. I expect these are “bear stories”, there’s some truth there but not much. Still why take chances. Another example in Panama, Bocas Del Toro where a guy owned particularly nice ocean side land that a developer coveted. The owner was forced out by that developer and corrupt government official(s).

I will not retire to a foreign country, I enjoy the San Francisco Bay Area far too much to move. Also, there is the advantage of living in a country governed by laws.

 

Ron

Retirement Phase 2 update 8/4/2013

We have purchased what may become our retirement home on Richardson Bay. We will rent this home for a few years. I have rented properties in the past and have no reservation renting properties. One lucky family will have access to a very nicely constructed home in a quiet neighborhood until we retire.

On a different note: my mom passed away about a week ago at the age of 90. She lived a full life and was mentally sharp to the end. I won’t go into details; she did not suffer, though I’m certain she did not want to “go”. I will miss her, and I find myself contemplating my own mortality.

As one grows older, time becomes more precious as there is less sand left in the hourglass. The ancient Greeks believed one’s life is determined by the three fates: one weaves the fabric of your life, a second measures the fabric, and the third cuts to length. I hope my “fabric” is still being woven. More significantly, I expect to accelerate our retirement. I would much rather travel in good health now, than look back in a decade or two contemplating what I wish we had done.

And so we have completed phase 1 and 2 of our retirement goals.

My wife has long wanted an all electric automobile. There are may advantages to electric. For me, the primary advantage is NO LONGER SUPPORTING MIDDLE EAST OIL PRODUCING NATIONS. Electricity production will improve in the coming decades and will (must?) become environmentally friendly. By running an electric car I will be supporting and taking advantage of those improvements.

Retirement Phase 3: we will purchase an all electric car; a Tesla S and for my wife.

Soon our purchases will end and our “travails” will begin.

Retirement Phase 4? That’s easy: retire. That chapter is yet to be woven.