What's Your Financial Breakpoint In a Balcony?

[DCGuy64]

30 minutes ago, slidemaster5 said:

 

That's good. Actually, the key thing you said is that you have been using him for decades. By now you would have enough history to understand his investment strategy and he would understand your retirement goals and your risk profile.  

 

My biggest beef is that many planners solely stress maximizing the financial aspects and not the entire retirement experience. In a down market it is easy to tell the client "you get the better answer by delaying social security until 70" while the client gets stressed by watching their portfolio shrink because they need to drain it until 70. The client then doesn't spend and loses experiences over the prime years of their retirement. 

 

When people retire, they may not be looking for the best mathematical plan but something they can live with so there needs to be a balancing act with a retirement plan.  As the great sage Mike Tyson stated, "everyone has a plan until they get punched in the mouth". 

Yes, I work at a credit union and have done for over 27 years. My guy has been our in-house financial advisor for most of that time. Early on, I stuck to riskier (but more lucrative), mostly foreign stocks, which has worked out nicely. I've gradually transitioned to bonds and some cash, but still a lot of stocks. I don't believe in putting all of my eggs in one basket, so I own several properties and I have some inheritance money waiting in the wings. I plan to retire at 65 but not take SS until 67. The main thing for me is that I love traveling, so the retirement plan my advisor worked out is heavy on taking trips and living part-time in Europe. The closer it gets, the more excited I am. I've been doing property research in Italy for several years now in anticipation. I also want to do a really long cruise, like 30-65 days some time.

[slidemaster5]

45 minutes ago, RocketMan275 said:

So much of the financial retirement advice is written around the persons who must rely upon social security for their retirement.  

BTW, I read one financial advisor who talked about the balancing act.  He said all too often, advice ignores a persons need to enjoy retirement.  He said he would regret facing a retiree who admitted they had a wonderful portfolio but wanted to know why he never got to have any fun.

 

 

Unfortunately, social security as a primary source of retirement is too common as we have transitioned from defined benefit to defined contribution plans (pensions to 401k). 

 

The advisor you cite sounds refreshing. Also, the scare tactics annoy me. If I had a nickel for every article that quoted the Fidelity "a 65-year-old couple needs $315,000 for healthcare" our staterooms would easily be paid for. 

[RocketMan275]

1 minute ago, slidemaster5 said:

 

Unfortunately, social security as a primary source of retirement is too common as we have transitioned from defined benefit to defined contribution plans (pensions to 401k). 

 

The advisor you cite sounds refreshing. Also, the scare tactics annoy me. If I had a nickel for every article that quoted the Fidelity "a 65-year-old couple needs $315,000 for healthcare" our staterooms would easily be paid for. 

 

I recognize that SS is a primary source for many. 

But how about some articles where SS isn't the primary source?  I really don't need another article about maximizing SS by working till 70+.

 

Prior planning avoids most of those pitfalls.  I've two different defined benefit plans in addition to SS and my IRA.  One of the best retirement decisions I made was the decision to join the National Guard after I left active duty.  That's one of my defined benefit programs.  It also resulted in Tricare for Life which pays 100% of what medicare doesn't.  I had hand surgery.  I saw one bill for over $20K.  Between medicare and tri-care I only paid $5 for some pain killers.  Filing for reimbursement was worth the effort.

[slidemaster5]

45 minutes ago, DCGuy64 said:

Yes, I work at a credit union and have done for over 27 years. My guy has been our in-house financial advisor for most of that time. Early on, I stuck to riskier (but more lucrative), mostly foreign stocks, which has worked out nicely. I've gradually transitioned to bonds and some cash, but still a lot of stocks. I don't believe in putting all of my eggs in one basket, so I own several properties and I have some inheritance money waiting in the wings. I plan to retire at 65 but not take SS until 67. The main thing for me is that I love traveling, so the retirement plan my advisor worked out is heavy on taking trips and living part-time in Europe. The closer it gets, the more excited I am. I've been doing property research in Italy for several years now in anticipation. I also want to do a really long cruise, like 30-65 days some time.

 

A friend of mine bought a place in Spain and spends the summers there so good luck with Italy. One thing I do agree with the planners on is the so called go-go, slow-go, no-go spending habits so you want to tailor your plan as needed. 

[slidemaster5]

3 minutes ago, RocketMan275 said:

 

I recognize that SS is a primary source for many. 

But how about some articles where SS isn't the primary source?  I really don't need another article about maximizing SS by working till 70+.

 

Prior planning avoids most of those pitfalls.  I've two different defined benefit plans in addition to SS and my IRA.  One of the best retirement decisions I made was the decision to join the National Guard after I left active duty.  That's one of my defined benefit programs.  It also resulted in Tricare for Life which pays 100% of what medicare doesn't.  I had hand surgery.  I saw one bill for over $20K.  Between medicare and tri-care I only paid $5 for some pain killers.  Filing for reimbursement was worth the effort.

 

Thank you for your service. My son is wrapping up his 20 years so he will start his pension at 38 and continue Tricare benefits as he starts the next phase of his work life. 

 

Yes, draw SS at 70, 4% rule, monte carlo simulations. Everyone went to the Acme school of financial planning.

[DCGuy64]

37 minutes ago, slidemaster5 said:

 

A friend of mine bought a place in Spain and spends the summers there so good luck with Italy. One thing I do agree with the planners on is the so called go-go, slow-go, no-go spending habits so you want to tailor your plan as needed. 

I started researching Italian properties in 2013. I have several locations mapped out (in central Italy), and several Italian friends who live there. They've been really helpful in terms of being my eyes and ears. The planning part is actually a lot of fun for me. Real estate there is surprisingly affordable compared to DC, where I live.

[RocketMan275]

41 minutes ago, slidemaster5 said:

 

Thank you for your service. My son is wrapping up his 20 years so he will start his pension at 38 and continue Tricare benefits as he starts the next phase of his work life. 

 

Yes, draw SS at 70, 4% rule, monte carlo simulations. Everyone went to the Acme school of financial planning.

Good for you son.  I retired from the National Guard so my pension and Tricare didn't start until I turned 60.

[carohs]

Oooh before we change the channel to retirement savings, here's my two cents. I mostly have a hard time justifying the upgrade to balcony. On NCL specifically, when I'm looking at sailings I'm interested in they seem to be 2x or more of the cost of an inside. When there's no difference to amenities included in the cruise, and the only thing that changes is a little square footage, I'm not seeing the value of the upgrade. But the more we cruise, the more I've decided that not having a bunk bed directly over my head is worth an added cost. I've yet to find exactly what that number is per night or per person. On the POA I wanna say it was $75/pppd and that was a hard no. The next cruise we have on the books the cost difference ended up about $65 pppd; because of the itinerary, time of year, and availability of vacation time, we decided it'd be worth it this time. We'll see if we use it as much as we think we will. 

[ChiefMateJRK]

21 minutes ago, carohs said:

But the more we cruise, the more I've decided that not having a bunk bed directly over my head is worth an added cost.

If you book early, you can book an inside that doesn't have pullman beds hanging off the wall.  Otherwise, just have the steward separate the beds.

[carohs]

31 minutes ago, ChiefMateJRK said:

If you book early, you can book an inside that doesn't have pullman beds hanging off the wall.  Otherwise, just have the steward separate the beds.

Thanks, but there's four of us. It's the bed when it's pulled down that tends to be problematic. And only because I'm a total klutz that will manage to forget at least once a day and boink my head. 

[slidemaster5]

8 hours ago, carohs said:

Oooh before we change the channel to retirement savings, here's my two cents. I mostly have a hard time justifying the upgrade to balcony. On NCL specifically, when I'm looking at sailings I'm interested in they seem to be 2x or more of the cost of an inside. When there's no difference to amenities included in the cruise, and the only thing that changes is a little square footage, I'm not seeing the value of the upgrade. But the more we cruise, the more I've decided that not having a bunk bed directly over my head is worth an added cost. I've yet to find exactly what that number is per night or per person. On the POA I wanna say it was $75/pppd and that was a hard no. The next cruise we have on the books the cost difference ended up about $65 pppd; because of the itinerary, time of year, and availability of vacation time, we decided it'd be worth it this time. We'll see if we use it as much as we think we will. 

 

Guilty as charged on the PSA on getting a good financial advisor.

 

When OP posed the question, I found it interesting since it all depends on your point of view and where you are in life:

 

(1) We are in our 60s and plan on doing 2 cruises a year. For us life is now more of a sprint than a marathon, so we don't need to pace our spending per se. Our priorities are to gain experiences on cruises and spend time with family the other 50 weeks of the year. In our 30s we had a fantastic family cruise while in an inside cabin. However, the vacation budget now is higher than net worth back then so now price is less of an issue.

(2) We enjoy the journey as much as the destination. We view the room as part of the trip. Having meals served in the room, spending time just sitting on the balcony.

(3) Interesting that OP mentions that they only cruise Caribbean.  Again, personal preference - I don't need to see a half dozen Diamond Internationals or Six Flags (Coco Cay). 

(4) I would throw money overboard before spending it on the spa or casino.

 

Like I mentioned in the car analogy, spend where and when you want if you have the means. 

 

[MiniJeffrey]

Well as I'm mostly single traveler, the ridiculous upcharge for a balcony is not worth it. All I do in my cabin is sleep and take a shower. For the rest I'm enjoying the in- and outdoors of the ship so it's a waste of money for me to be in a balcony. I rather use that money for spa access etc.

[ChiefMateJRK]

6 hours ago, slidemaster5 said:

Guilty as charged on the PSA on getting a good financial advisor.

There is a very well accepted saying on that major investing forum.

 

"Once you know enough to select a good financial advisor, you no longer need them"

 

This is VERY true.

[elcuchio24]

Love the balcony. Balcony everytime, doesnt matter the itin/length. #Balcony4life!

[elcuchio24]

1 hour ago, ChiefMateJRK said:

There is a very well accepted saying on that major investing forum.

 

"Once you know enough to select a good financial advisor, you no longer need them"

 

This is VERY true.

 

10000%!!! Do mine all myself and wouldnt change a thing..

[KarlK]

7 hours ago, slidemaster5 said:

Indeed, point of view and where you are in life. Early 60's with no retirement in site. Can get a week off about every year or two from work and financially a cruise can be swung every other year. Still have a pre-teen, so still need to work around school. Gain knowledge on closed loop U.S. cruises  share time with family is the key to itall.

 

"When OP posed the question, I found it interesting since it all depends on your point of view and where you are in life:

(1) We are in our 60s and plan on doing 2 cruises a year. For us life is now more of a sprint than a marathon...Our priorities are to gain experiences on cruises and spend time with family"

 

 

[shandryl]

[Bubbeh]

On 5/17/2024 at 1:35 AM, graphicguy said:

Proud of him.

And rightly so.  Kudos.

[ChiefMateJRK]

3 hours ago, elcuchio24 said:

 

10000%!!! Do mine all myself and wouldnt change a thing..

Welcome fellow boglehead.😎

[itsnotjustme]

On 5/13/2024 at 11:44 AM, Daruma said:

So, just curious, at what daily price differential do you decide that the balcony isn't worth it? 

We just went through this very dilemma.  Here's what we saw and decided:

 

Itinerary:  12-day Japan Korea in spring.

Balcony:  $4,299 Per Person (PP)

Ocean View:  $2,799 PP

Baseline Delta:  $1,500 PP, or $125 PP/Day

 

However, these factors lowered the delta:

Military Discount 10% (Makes delta $1,300 PP)

1 additional FAS Meal each (Value at $30 each; delta now $1,270 PP)

Free Gratuities from Our Travel Agent for balcony and above ($240 PP, delta now $1,030 PP)

Additional 55,000 airline miles based on both cabin level and higher fare (Value ~$750 for two - delta $655 PP)

Ability to select cabin - OV was Guarantee (Intangible) 

Final Delta:  $655 PP, or $55 PP/Day

 

For this delta, we chose the balcony.

 

[itsnotjustme]

Let me add our circumstances:

 

• It is two people, my spouse and I
• We are roughly 60 and in decent health
• One of us is the primary breadwinner, retired military, and still working full time; the other not working at all
• Primary breadwinner earns 4 weeks of vacation per year, but with use of comp time, holidays, and working long days right before/after vacations can often be on vacation 6+ weeks/year
• Split vacations between cruises, Europe land, and U.S. land
• We most often get a balcony, but have done OV, and occasionally a suite
• We most often cruise Europe, but have been branching out further lately
• Financially, we could certainly afford to always get a suite, but only choose to when it is a really good deal 

 

[N-8]

10 hours ago, ChiefMateJRK said:

Welcome fellow boglehead.😎

Boglehead here too. 

[slidemaster5]

Our return to cruising happened last fall when we were planning to go to Bermuda for our 40th anniversary. After looking at flight and hotel options we discovered (as many of you know) that we can cruise in a suite cheaper than flying and staying in a nice hotel.  For us it is balcony v suite (or mini) price point option. Inflation has made all vacationing pricey, but the cruise advantages are still there, and you make it to port in all stateroom types. 

 

I'll throw in one last financial planning comment: you Bogleheads know what you are doing.

[fredflint]

Just before COVID hit we were booked on a large inside cabin for a 7 day Mediterranean cruise we figured we would give it a shot and with the port heavy itinerary we would be using the room more like a hotel room.  

Well the cruise was cancelled due to covid and with all the different issues that can come up now that may have you in your cabin for an extended period of time we have decided that it is Balcony ony cabins. 

To me any cost difference is worth it as we have usually used our balconies quite a bit.  We enjoy just sitting there watching the waves go by and enjoying our time alone together.  Now ask me about paying 2x the cost for a Haven cabin or some other exclusive area and we will have a different conversation.

[The Traveling Man]

On 5/16/2024 at 7:13 AM, RocketMan275 said:

IOW, that 'free' upgrade is costing you $600?

Or you are giving up $600.00 OBC to get a Balcony stateroom which otherwise might have cost you several thousands of dollars more than an Inside.