Health Care

It’s interesting that some people I talk to would never even think of cruising because of the “health care” issue. They feel they’ll need the 500k to 1 million in their future IRA accounts just for the multi-K a month health care insurance and costs. Sailing a boat before that having all that paid in advance would be fool-hardy, they believe

Meanwhile, successful cruisers seem to find alternatives, either in catastropic coverage, and simply “payiing cash” as they need health care as they go. However, there might be “disaster stories” concerning lack of coverage of cruisers that we never hear about.

All of it is worthy of concern, but I’d like to think there’s a solution for someone who wants to start cruising in their mid-fifties instead of mid-sixties.

Saving for Sailing

My wife and I were impressed by two things about a year ago:

1) Our kid’s Coverdell college accounts were growing nicely with their monthly installments into a class “Z” no load fund. We were at the $2000 annual limit for putting money into them.

2) We decided that if we wanted to do real cruising before our 401K accounts could be accessed, we needed an account that could be used when we were younger than 59.5 years.

Thus, we opened two Roth IRA accounts for ourselves, and pretended that they were like “college accounts for cruising.” We lucked out and were able to contribute into the same class Z no load fund that we had started a couple of years earlier for the kids.

If I understand it correctly, we can withdrawl our contributions to this fund without penalty at any time, but not the interest growth until we are 59.5. If we had “converted funds” from a traditional IRA, the money would have to be in the account for five years before we could withdraw without penalty.

At this point, we can put up to $4k (I believe) into each of our accounts a year, and we have the option of pulling funds out earlier for cruising. If everything worked perfectly, we might use these accounts to fund one or two smaller boats as we age, and then a larger boat when we are in our mid fifties to cruise full time on. We would “bank” on pulling the interest on the account at age 59.5 to help fund our cruising until we start tapping into our main 401ks when were in our mid-sixties.

Are others using approaches like this? Any recommendations for better plans? We don’t want to wait to cruse until our mid-sixties, and we still have the “health care” issue to resolve while we cruise, but we are happy that our “reduce monthly expenses” campaign has helped us acculumate over $4k into each of our Roth accounts so far. If we could do this for around 14 more years, and then cash out the house, we might be in good shape for cruising. It’s possible we could configure something to make the plans work sooner, but we have to keep the kids’ needs in mind as well.

Cal 20 Restoration 7

I just posted our final set of Cal 20 restoration photos at

http://www.sailingvoyage.com/photos/index.php/Cal-20-Restoration

This set shows the original ’67 Evinrude we used to motor from Schooner Creek Boat Works to McCuddy’s Moorage (barely), some final deck hardware bedding, our new Mercury 4 hp 4 stroke, and then some pics from our maiden sail this evening on the Columbia River (in very light winds).

Thanks to everyone who helped out with advice, parts, and general encouragement. Special thanks to Kevin C for lending us his trailer for three months. The project was enormously rewarding, and my brother actually misses having the boat in his driveway (nothing to stare at in the evenings). Luckily, I’ve located a Pearson 26 that only needs a little…

Project costs: $600 for the boat, sails, and original motor. Then about $2000 in paints, materials, wood, stainless fittings, almost new jib from North sails, running rigging, new rub rail, etc. Then about $1215 for the motor, and $600 for the first year of fleet moorage. Oh, and about 3 months of thinking about working on it, and actually working on it during evenings and weekends.

Main achievement: learning the process and procedures of dealing with repairs and refinishing. And, happy wife and kids on boat.

Lucky factors: being able to borrow a trailer, share the work between two of us, share the costs between two of us, and having a deadline to finish the project so we could return the trailer.