In 2011, 70-year-old Lynn Martin and her 66-year-old husband, Tim, tired of a conventional retirement. "We were doing what people do in retirement and we decided it wasn't enough," Lynn Martin says.
So they sold their home in the San Francisco Bay area and for the past three years, they've been traveling the world, living off their Social Security, a pension of a few hundred dollars a month, and the returns from their retirement portfolio of less than $2 million. During their three years on the road, they've rented short-term apartments in London, Paris and Florence, Italy, and have plans later this year to visit Portugal, Russia and Mexico. They've also seen the world from the decks of low-cost cruises.
They're having a ball -- and their financial adviser has assured them that they can keep doing this until they are about 85. Then they may have to settle down somewhere and live more conservatively. "We're not going to suffer, but later on there will be less," Tim Martin says.
Right now, they are taking more than the recommended 4 percent from their retirement nest egg. Tim Martin says they are prudent, but the annual total withdrawal is closer to 6 percent. They pay for Part B Medicare, as well as Plan J supplements, which cover doctor and other health care costs outside of the U.S. They don't own a car, but they rent vehicles when necessary. They've discovered that renting apartments in suburbia is cheaper than renting in cities, even when you factor in the cost of a car.
Selling their home eliminated California property taxes, but they still pay federal and state income taxes, even though they are out of the U.S. most of the time. They rent a 12-by-15-foot storage unit in California for their belongings. Otherwise, everything they own fits into small, rolling duffels. Lynn Martin says that one of the unexpected costs was the impact of frequent laundering on the life of their small wardrobes. They wear their clothes until they are ready to be thrown away, and then they buy more.
"Living off Social Security, a small pension, plus 5 or 6 percent of savings is really possible," Tim Martin says. "We have had a lot of people come to us and say, 'How did you work this out?' They try to make it more complicated than it is. It's just arithmetic."
Lynn Martin has written a book about their retirementplanning experiences: "Home Sweet Anywhere." Much of it is based on her blog, www.homefreeadventures.com. If this kind of retirement appeals to you, these resources are a good place to find practical advice.