The recent trip to California in the Smart car was a learning experience in several ways. First, snow storms in the Sierra Nevada in a Smart car are not particularly pleasant, but the $250 round trip fuel cost was great.
More relevantly though, we met with several other Canadian travellers in Paradise who were also considering the shape their retirement would take.
We all agreed that we had a distinct distaste for winter, but should we buy a fifth wheel, or a condo or house? And if it was the latter, where should it be? (And let’s not forget as I have cautioned here a number of times, about the pitfalls of Canadians buying U.S. real estate.) Maybe we should continue to rent hotel rooms, with our every whim attended to ... but should it be five star, or the small Inn type that we were currently experiencing?
No surprise to the reader, I’m sure, but we didn’t all come to the same conclusion, and some of us didn’t come to any conclusion at all. Bob and Linda might be on their way home from the south towing a fifth wheel as we speak. Or not. Could be that they will join us next year at the Hotel California.
We did, though, reach some conclusions that will certainly affect the financial plan for retirement. First, we are not five-star people ... much preferring the ease of making our meals in our own, or a communal kitchen facility.
Epiphany number two was that road trips, for the next eight or so years of limited vacation, are not really practical, thereby ruling out the fifth wheel or motor home. Phew, this research and financial planning stuff is exhausting.
Stay tuned in the fall for our rental condo vs. small hotel comparison. And a principle that was realized after significant wine research under the full moon one night ... capital that could be spent on a vacation home, generating five per cent interest would pay for our dream vacation every year and allow us to change our destination at will. More factors to consider.
Conclusion: financial plans are really not just about the dollars, you also need to truly understand what it is that you want before you leap into a large financial commitment.
Judy Poole is a financial advisor with Raymond James, and has spent the last 39 years involved in the financial industry. You can reach her at judy.poole@raymondjames.ca. This article is provided as a general source of information and should not be considered personal investment advice. The views expressed are those of the author and not necessarily those of Raymond James Ltd. Securities offered through Raymond James Ltd., member - Canadian Investor Protection Fund. Financial planning and insurance offered through Raymond James Financial Planning Ltd., not a member - Canadian Investor Protection Fund.