Washing Our Coach

Lorraine knows this better than anyone.

I like things neat and tidy.

Whenever we travel, whether it is in the car or in the coach, clean is good. Especially the windshield. But preferably the entire vehicle.

And I am also fussy — in case that wasn’t clear yet — about the products I use on the finish of either the car or the coach. I hate scratches and swirls in the finish. I want to keep the finish looking like new.

Relatively easy to do with a car.

Very difficult to do with a coach.

Unlike the picture above, not every place we take our coach has a resident detailing service.

But I have found something that I hope Lorraine might add to the Christmas list this year. Something that we can use to make the task of keeping our coach clean much easier.

I already have the tools I need to wash the coach. The big challenge is how to dry the coach. Particularly if it is outside in the sun.

David Bott of Outside Our Bubble fame, put together this video on how to keep a motorhome clean using the CR Spotless water system.

The products are available in Canada through one of my favourite online detailing retailers, autoobsessed, right here.

CR Spotless offers a couple of packages specifically for motorhomes including this luxury package:

Don’t panic Lorraine. There is a basic version for about $500.

RV Parks Attract Criminals?

I guess it depends on whether you think the people in the RV park are criminals or whether the type of RV park, such as the one pictured above, might attract criminals to commit a break and enter in such an upscale setting.

I came across this article on the web where a proposal for an RV park met with substantial resistance from the community of Kyle, Texas near Austin. The developer claimed that the RV park would consist of 50 to 55 sites for upscale coaches that start in the $300,000 range and that the park was targeting vacationing families and retirees.

Here are some of the more interesting comments made in the article:

…residents from the Kensington Trails subdivision spoke during the item’s public hearing period, with many suggesting that the park would attract crime into the area.

…those who live in RV parks typically don’t “connect” with the city they’re living in.

…a 13-year police officer, said RV parks see a higher number of transients, sex offenders and those who can’t otherwise find housing and this increases the likelihood of crime-related incidents these areas.

The zoning was denied.

Twice.

I wonder if the developer showed photos of upscale motorcoaches like the one pictured below?

I suspect Kyle’s Planning and Zoning Commission was thinking that an upscale RV might look more like this one:

The Retirement Puzzle

Someone asked me how I felt when I handed in my retirement notice.

Well, it felt a lot like I was quitting.

I suppose putting in a retirement notice is similar to quitting. Except that there is no next job on the horizon. And, because I presently serve as a senior executive in an Insurance company, I can’t just give a couple of weeks notice. In my case, I have provided 9 months notice to allow the CEO time for an orderly transition.

So, although my intentions are clear, I still have a few months left before I am officially retired.

We have been planning for retirement for years now, and yet there are a few questions that continue to worry me:

  • Will we have enough money?
  • Will we be happy?
  • Will we stay healthy?

Being a numbers guy, I have been preoccupied with the first question. This is probably the most common question that people have when they think about retirement: how much money will I need to retire well?

Keep in mind that I am offering a Canadian perspective. The U.S. is a very different country in terms of asset and income variance. To enter the top 1 percent of income in Canada is roughly $225,000 a year. In the U.S. the entry point is almost $600,000 Canadian a year. And in Canada, there are only about 300,000 tax filers in this category.

A recent poll issued by BMO Harris Private Banking, claims that people with at least $1 million of investable assets think they need $2.3 million to retire well. Canadians with at least $1 million of investable assets reflect only 1 percent of the population. Most Canadians will never be able to accumulate that much money for retirement.

Ask most Canadians the same question, and they might say $1 million. Or less. Or more. Very few have a clear idea of what is needed.

My approach was very straightforward. I tracked all of my expenses and I categorized them. I had two columns: one for my expenses while working and one for expenses that we would carry on into retirement. I then looked at contributions from pensions and identified the gap. That gap represented the target retirement savings that I thought I should have before I could call a retirement date. And, of course, there could be no outstanding debt carried into retirement.

Let’s take an example.

We will assume a household with only one income earner and let’s assume that single income earner is doing okay. Much better than the average.

In my province of Ontario, income at the 50th percentile — the median where half make less and half make more — is just under $40,000. Yes, you read that correctly, $40,000. Income at the 75th percentile is $72,000 and at the 90th percentile it is $110,000.

Let’s use that number.

Our single income earner, roughly 10 years from retirement, will pay about $30,000 in taxes on $110,000 of income. That leaves him with $80,000 to spend.

He holds a mortgage which costs him $18,000 a year. This assumes that he put 20% down on an average house and he carries the balance as a mortgage that is paid down over 25 years. The house would be worth about $400,000.

So, he is now left with $62,000 to spend after taxes and mortgage. Out of that amount, he has a number of expenses to cover: cars, food, entertainment, raising kids, saving for retirement. Which, if we look at the average household expenditure after tax, means he has very little, if anything, left over.

But, what might his expenses look like after retirement?

His mortgage would be gone. Saving for retirement would be done. Money spent on raising the kids would be done (hopefully).

In all likelihood, he would be able to live to the same standard in retirement at roughly 60% of his pre-retirement income. Indeed, Sun Life completed a report where they found that the average retired Canadian was living quite well on 62% of what they earned before leaving work. That ratio goes down as income goes up. One of the few benefits of a highly progressive taxation system in Canada is that high income earners can likely live quite well on much less, say 35 to 50% of their pre-retirement income.

So let’s see where our single income earner might stand.

This is what he can count on in retirement. Assuming that he intends to maintain his standard of living, he would need to achieve about $68,200 per year. Based on averages, he might see the following:

CPP: $8,000
OAS: $14,000 (for both himself and his spouse)
Pension: $45,000

Well, lucky fellow! He is almost there at $67,000. His gap is really only a few thousand. Let’s say he needs $10,000 more per year, a total of $77,000 to fill the gap and provide some buffer. A simple way to calculate his target retirement savings is to multiply $10,000 by 25: $250,000. If invested appropriately, he should be able to take out 4% in the first year and then increase his withdrawal by the inflation rate in subsequent years.

If our single income earner did not have a great pension, let’s say only $25,000 then his gap would be $30,000 which would mean a target retirement savings of $750,000. That amount of savings is a pretty big number for most Canadians. Let’s hope he understood the need to put money aside during his working career! Although, as some financial planners would say, you will have whatever you have when retirement comes along. If you are within a few years, there is not much you can do except try to work longer and accept a lower standard of living whenever retirement happens.

The most recent data from Statistics Canada shows families whose highest income earner was 65 or older, had a median after-tax income of $57,500 in 2015. Our single income earner in our example will be taking in more than that in retirement and he will likely enjoy more discretionary spending now that the kids have gone and the house has been paid off.

Every person will have a unique situation in terms of how much is enough money for retirement. From all of the reading and research I have done in this area, I have reached a few basic conclusions:

We will live on much less in retirement because our income taxes will be substantially lower. We can easily live to the same standard on an after-tax basis with an income replacement ratio of 45%.

Thank heavens I set money aside when I was younger. That is the only reason why I can retire earlier at 61 as opposed to 65. Fortunately I have always worked for companies with defined benefit pension plans. Although not indexed for inflation, they are worth a lot of money to me in retirement. To get a rough idea, I took the annual income stream from my pensions, multiplied it by 25 years — I hope to live that much longer! — and gained a deep appreciation for 35 years of pension contributions. I also set a lot of money aside in my 40s which gave time for my investments to grow over the following two decades. That combination of company pension plans and personal investments provides the foundation for financial independence.

Having enough is a very personal matter and in the long run doesn’t mean very much. Having enough to not worry about money is probably the best perspective. As I have done my own research, most people in retirement do not consume like they did in their younger years. They value time and relationships. They find purpose differently from when they were working.

Lorraine keeps telling me not to worry about the numbers.

We have enough.

So. Will we be happy? Will we be healthy?

More on those two questions later.

Done Working (Almost)

I have a shirt that I purchased from this store, dunworkin, in 2016.

I’ve never worn the shirt as my family told me that I can only wear this shirt once I am done working and retired.

That time will be soon.

A few days ago, I told my CEO that I would be retiring within nine months. In my current role as a senior executive, I need to provide sufficient time to help the company with my leadership transition.

And so it is done.

We have been busily planning this part of our lives for over two years now. The usual concerns creep into play. Have we saved enough? Will we have enough money to last our retirement? Will I get through the next nine months?

There is a bit of fear. And a bit of excitement as well.

Someone told me that when they retired, they had mixed emotions: joy and happiness.

Right now, I have fear and excitement!

Crunch time as we get ourselves ready for our first extended sojourn in our coach in October of 2018. We will take the coach out a few times before then and I am glad that we have had a couple of years under our belt with the motorhome. I think we have a much better idea as to how we will enjoy that part of our retirement.

9 months and change.

285 days.

But then, who’s counting?

Hearthside Grove Sites

I wanted to post some of my images of the sites at Hearthside Grove. Not all of the sites look like these ones, but most of them do. In a way, it reminds me of how Disney might choose to design a luxury motorcoach resort. Everything here was just so, well, perfect!