“When I retire, I’m gonna buy an RV and travel the country”.
This may be great and all, but the year you turn 65 (or retire, pardon if I offend those who retire at 45 or 70) $60-80 thousand dollars could be a bit much.
I’m going to show you why buying an RV in retirement is a poor choice for most people.
Let Me Explain
Most motor homes people purchase cost somewhere between $50,000 and $300,000. This cost can be significant especially to the future value of your money. This graph is an example.
This is using a low-end camper probably used at about $60,000 dollars. ( https://www.rvtrader.com/dealers/American-River-RV—Sacramento-3018028/listing/2017-Coachmen-Freelander-26RS-119765660 ) over 30 years of retirement, that money can become quite substantial.
Now, Let’s consider vacations. Using “Get Away Guru’s” and other exciting promotionals. It’s not hard to find vacations. If you could budget $10-15,000 in travel a year during retirement that would be great! Maybe your goals are higher, but here’s the deal. In retirement you can travel a lot easier and on a moment’s notice. If you suddenly leave for 2 weeks in the middle of January to the southern hemisphere for warmer weather on a jungle safari, or to travel New Zealand, it won’t be as big of an issue as a family with kids going to school.
The mobility of being retired makes it easier to find travel opportunities at discounted prices.
Figure out what you want to do with retirement. Are you going to do several week-end trips, or do you want to do a 2-week expedition every year? How about several 4 day weekends at national parks around the country? There are so many options. Remember to consider that most people in retirement have a little bit less energy than a 30-year-old.
This is only assuming $80,000 of an investment in an RV type home. If you’re dropping $200,000 on an RV the numbers will only be bigger. With $200,000 the income at 6% being $12,000 a year.
How much vacation and travel can you get out of $5000 a year?
Remember, owning an RV doesn’t mean costs are gone, that’s just the cost of buying it. You’re still spending other money from retirement on gas, maintenance, RV parking, licencing, registration, and more.
Here are three articles that give some awesome consideration to costs, and lifestyle of owning an RV.
Consider the Costs of an RV- https://www.budgetsimple.com/blog/rvs-timeshares-and-vacation-homes-a-good-idea/
More thoughts on the expenses behind an RV – http://livingstingy.blogspot.com/2011/05/future-of-rving.html
Is an RV lifestyle right for you? – http://wheelingit.us/2012/10/17/the-darker-side-of-fulltime-rving-5-thoughts-to-ponder-before-making-the-leap/
My advice is If you are going to buy an RV in retirement to take trips in multiple times a year, save the money instead and use it on hotels and airfare. The bang for your buck is much stronger there, plus you aren’t putting your limited retirement savings into one of the fastest depreciating things you can. AAANND lets be honest, if you want to take an RV out for a couple of days, go rent one for one of those trips.
Ultimately it comes down to this: Keep it invested, the investment return is your play money in retirement.