FIREside Chats

hugheskevi

Exciting day yesterday, as I made my first booking for a long trip that will be the start of our retirement

I've long planned to do an extended overland trip through the Americas, harking back to 20 years ago when I had a great time on overland trips through Africa and Asia. Those were on big trucks, mostly wild camping and covering huge distances in a group of about 20 people all doing the same trip.

Myself and my wife will travel the Americas independently this time, but I was struggling with the journey between Anchorage and Vancouver. There really were no good overland options, with the State ferry being hugely expensive and pretty terrible in terms of accommodation and food. Bus travel was close to non-existent, and one-way car hire would either be unavailable or prohibitively expensive. Hence I'd resigned myself to flying.

Then I idly chanced upon the big cruise liners that travel around Alaska. I'd normally not pay them any attention, but I idly looked at how much they would cost, and they are surprisingly cheap - plenty of add-ons where the lines make their profit, but they can be avoided. So as of yesterday I finally made the first booking of the trip which we had planned to leave a year ago to do but got put back due to COVID,  an 8 night cruise between Anchorage and Vancouver. It will be my first (and probably last) ever trip on a big cruise liner, I've only ever taken a Hurtigruten cruise around Norway previously to see the far north and the Northern Lights.

 If all goes as planned, the trip will be overland from Fairbanks, Alaska, down to Tierra del Fuego in Argentina departing in September and lasting about a year to 18 months. The distance is 9,260 miles as the crow flies, but much, much longer as we will travel it. The trip will start with a week of independent travel, flying into Anchorage and driving up through Denali National Park to Fairbanks and back to Anchorage. Then we hop onto the cruise for 8 days down to Vancouver, go to see Jasper and Banff National Parks, back to Vancouver and then a couple of months driving down the west coast of USA and on to Mexico.

Lots of preparation needed - we are going to rent our house out whilst we are away rather than sell it, as a hedge against house price change whilst we are away. Both my wife and I should be able to take unpaid leave from work for 2 years, and the plan is to come back after 2 years and briefly return to work whilst arranging a move to a new house in Wales for our retirement. That will enable us to earn anything extra we might want, and also to get a mortgage if necessary to effectively tap into future pension income (ie mortgage could be repaid from pension once we reach minimum pension age) to smooth future income - perhaps odd given the thread that this would make me a mortgage-wannabe I guess. We should have enough without having to work more or get a mortgage though, but a lot could happen in terms of house prices, investment returns, inflation, cost of our travels, and so forth so I'm keen to keep options open and stay flexible.

Very  much looking forward to what is now a 6 month countdown to retirement (if you can call it that given the plan to briefly return to work in a few years, but I think it counts!)

becky_rtw

That sounds amazing Hugh! I've an old friend who lives on Vancouver Island and raves about it. 

How do visas work for such a long trip? Or does the country limits come into play so you dont need them?

hugheskevi

becky_rtw said:

How do visas work for such a long trip? Or does the country limits come into play so you dont need them?

Pick them up as you go. Countries where you cannot obtain visas online or at the border are more problematic, necessitating embassy visits but tends to be more of an issue in Africa and Asia than the Americas. Even then, as long as you can get the visa in one visit it is all straightforward, it is frustrating when you have to leave passport there - especially in countries which require tourists to always carry their passport...

You do need a lot of free passport pages and a large passport though. COVID rules will also be frustrating, but that is just something to deal with - the Americas looks far less restrictive in this regard than Asian countries fortunately.

The USA is a bit of a pain, as their ESTA is only for 3 months and annoyingly includes time spent in Canada, Mexico and the Caribbean. Three months is not long to see an entire continent! Fortunately that should be sufficient for what we want to do, although because of the restriction I did decide to just go to western USA and come back to see the east another time. Getting a visa for longer would be possible, but is additional cost and phaff (visiting USA embassy for interview, etc) so easier just to do it in separate visits. The USA also prevents visitors from getting an ESTA if they have visited certain countries, including Sudan which I very much want to go to and did consider going there before the USA, but due to the restriction it is easier to go there afterwards.

savingholmes

Sounds a fantastic trip Hugh. Not one for the faint hearted

powerspowers

That sounds amazing, I’ve looked at something similar before but didn’t have the means to do it before settling down with a man with kids! Maybe one day. 

Do you mind me asking your overall budget? 

LadyGnome

Wow! that sounds amazing hugh.  What a fabulous plan.  Travel is something I am looking forward to as well.  I spent several months backpacking when I was a student but it's impossible when you have a family and work commitments.  Being able to travel more slowly is a real luxury.

hugheskevi

powerspowers said:

That sounds amazing, I’ve looked at something similar before but didn’t have the means to do it before settling down with a man with kids! Maybe one day. 

Do you mind me asking your overall budget? 

It is extremely hard to estimate expenditure, not least as I only have a detailed plan for the first month. I have a broad outline plan for most of our travels, but this will only get firmed up as we travel so as to remain flexible and there are many options about the order in which we do things.

Traveling through Canada and the States will be expensive - not just because they are expensive places, but that gives you an incentive not to hang around relaxing and not doing much, which in turn increases average daily expenditure as you are constantly doing a lot. Once we get to Mexico the pace and expenditure will fall significantly. There will be some entire weeks spent in the same place just relaxing and running, hiking, etc, where we won't spend more than a few hundred pounds.

Having monitored expenditure from previous travel along with research of others who have done similar trips, my expectation is for expenditure of about £50,000 p/a, possibly £60,000 but I'd be very surprised to exceed £70,000. Whilst that might sound a lot for a holiday, it should be remembered that we would spend about £25,000 - £30,000 per year living in the UK and we will also have rental income from our house, so expenditure traveling compared to living in UK may well all be quite similar overall.

I've calculated that our first two weeks in Alaska should cost around £2,500 (excluding the flight there as that is a one-off), and that should be one of the most expensive periods of the entire trip. Annualised, that only comes to £60,000 so I think £50-£60k should be fine as a target.

There isn't really a budget as such. My wife and I are both aged 44, and the plan is that our house in London will be sold and the proceeds used to buy and furnish a new house for retirement over in Wales. We have pensions that we plan to commence from age 55 (protected minimum pension age), so our non-pension savings and investments will need to fund the period between when leave and reach age 55, which is slightly over 10 years. If expenditure is in line with expectations then we should be able to return and comfortably retire. If not, we can briefly return to work and either earn more and/or get a mortgage on our next place to be paid off with pension resources.

It should be a good position to be in, keeping as many options open as possible but I'm sure there will be some unforeseen problems to deal with. Whatever happens, we have a mortgage-free London house and fully-indexed DB pensions with more than we will need from age 55 and DC pensions from 57 as even more back-up. So I only really need to be concerned with the period between now and age 55, and given we will both be on unpaid leave the worst case scenario would be coming back to London and maybe working for another year or so.

Cheery_Daff

What a fantastic plan! Lovely to see everything come to fruition and you be able to make such a trip. Send us a postcard to keep us encouraged and on the right path!

Bluegreen143

Just delurking to say that sounds amazing! What a wonderful way to kickstart retirement. 

Suffolk_lass

One other question @hugheskevi
I wondered if you intended keeping up with your national insurance contributions to ensure you have access to state benefits after you retire? - pension being the obvious one but the possibility that the government might limit benefits to pre-SPA non-contributors (not something they have mooted but I have thought it is another area where "Daily Mail fairness" exponents might take us)