How big should my nest egg be before hitting the road

[TheHughes731]

We are looking to hit the road in the next 6 to 9 months. I'm just wondering what is a good nest egg to hit the road with. One could save and save forever and not feel like it was enough. So what is a realistic figure to put away and feel comfortable. Should it be enough to buy a new truck or TT if needed or maybe enough to do a major repair on both?

[sandsys]

Sorry, I can't help you with this one. We didn't hit the road until we were retired so we had our entire retirement funds available to us. Otherwise I know I would need a substantial amount of savings because I am a worrier. Non worriers probably need less. And those with good household repair/mechanical skills probably need less than those of us lacking such skills. Ah, there's that ubiquitous answer again: It depends.

 

Linda Sand

[JRP]

Yes, it depends.

it depends on a lot of variables and a few unknowns. How old are you now? Do you plan to do this for just a few years and then go back to work, or do this until you die? How long will you live? a lot of retirement decisions would be so much easier if we knew that answer.

Do you plan to work for pay while fulltiming? Do you plan to stay at free sites or all full hookup campgrounds? Will your nest egg grow at 5% a year or loose 5% a year? etc etc

 

start with some basics. estimate your total yrs by making your best guess at how many years you have to fund, Say that's 20 yrs based on your current age, your health and the actuaries best guess at your life span or your planned fulltiming span. then prepare a complete budget for a year, based on your travel plans, life style, fixed and variable costs; say that's $25,000 on avg.

so for that example, the basic answer is $500,000

If you plan to work for pay, reduce that by your conservative income estimate for the durations you plan to work for pay. if you are at or near SS age, you can reduce that nest egg total by your expected SS income.

whether you need to allow for future new vehicle purchases, depends on the current age & condition and how long you plan on fulltiming.

you should allow for some funds to transition back to some type residence when you stop fulltiming.

don't forget to allow for income taxes on any income earnings and your investment deductions, if those are pre-tax 401k type savings.

 

as with anything related to the fulltiming lifestyle, there will be a wide variety of answers. some started out with $10,000 or less and planned to work on the road, and some held off till they had $1,000,000 stashed away and never planned to work again.

[FULLTIMEWANABE]

Just read through some of you posts and note you are in your early 20's, both working for the same company etc right now. Which gives us a little back ground on you.

 

As Linda said there are so many "variables" that no one could advise you how much you would need. And whilst as always, we say to each their own: For us personally we are great advocates of having a good size emergency fund that covers our expenses for at least 18 months, whether in a SnB life or RVing. For most the rule of thumb would be 6 months, but I'm a worry wart (LOL). We are almost there now, but when we totally retire, we will ensure that we have 3 years income put aside, should the markets not cooperate for us to sell any investment holdings in a downturn market, such as that of 2008 era.

 

When you say "hit the road", are you still planning on locating your rig at your grandmothers for hook ups etc or are you intending to travel around mainly, or workamping for a site and stipend, or do you have a mobile income source already in place that can easily transfer to a nomadic lifestyle?

 

If you are planning on moving about then one would assume you wouldn't retain your current employ and income stream???? If that were the case what are you proposing to provide you with income for all your everyday expenses? There are a lot of FT working RVers, but typically these folks had some form of savings/emergency funds as well established their business/employment that could be seamlessly transferred into the mobile lifestyle.

 

There's absolutely no right or wrong way to do this, but having some form of emergency fund equating to several months income at minimum and also to repair/replace/renew an out of warranty set up would be of paramount I would think.

 

Share a little more about your situation regarding some of the above Q's, as well what realistically you'd likely have financially available to support yourselves, plus income sources, and I'm sure you'll have a ton of responses.

 

You also might want to check the Xscapers here - probably Kirk will be along shortly and give you more info on that which is aimed at the younger working on the road escapees. Remember whatever the mind can conceive, there's usually a way to achieve!

 

FTW.

 

PS: Jim2's post came down as I was finishing this, sorry if any repetition here.

[Kevin H]

That's a great question. There are all sorts of opionions on nest eggs. Some say enough to cover a few months of no income, others say a year or more. Some folks are doing fine with no nest egg. Some people have multiple millions.

The real answer is, how much it takes for you to be able to sleep. The only difference between rv and s&b dwellers is their lifestyles.

If you wait for the perfect moment or situation, you may end up waiting forever.

[Dutch&Di]

I feel that if you are healthy and ready to go, go for it. As you said you could save forever {& maybe get sick or worse} and never get to travel & explore. We just bit the bullet and chucked it all and went for it. Three times over all these years, we did get a "summer" job, if you could call it that which certainly helped bit with like Free Rent, not much fuel costs, free or low cost golf, etc. We also started a small business to keep with us on the road. In January, we start our 20th year of fulltiming so it seems to have worked out for us.

It is really up to you. Are you a jump in and see what happens type of couple {like we are} or do you need to have all your eggs in one basket before you go for it?

Let us know what you decide. Hugs, Di

[TheHughes731]

When you say "hit the road", are you still planning on locating your rig at your grandmothers for hook ups etc or are you intending to travel around mainly, or workamping for a site and stipend, or do you have a mobile income source already in place that can easily transfer to a nomadic lifestyle?

 

If you are planning on moving about then one would assume you wouldn't retain your current employ and income stream???? If that were the case what are you proposing to provide you with income for all your everyday expenses? There are a lot of FT working RVers, but typically these folks had some form of savings/emergency funds as well established their business/employment that could be seamlessly transferred into the mobile lifestyle.

 

When I say hit the road thats what I mean. When we start traveling and workcamping. Once we get the TT we will be putting at my grandmothers because thats the only place we have to put it. Plus its got full hook up. When we workcamp we'll be looking for a site and most of the time a small check. We also have a structured settlement coming to us every financial quarter to help fill in the gaps. We do not have a business we can bring with us or any clue how to start one on the road.

 

I was thinking we could start a monthly budget and try to stash 6 months out for savings.

[sandsys]

The real answer is, how much it takes for you to be able to sleep.

Best answer ever!

 

Linda Sand

[Coleen]

Of course having a huge nest egg is nice. But, there's no reason to confuse "nice" with "necessary." There are numerous jobs for RVers that pay wages, many which also provide an RV site and utilities. Unless you have an unusual situation, you should be able to build your nest egg while you are full-time RVing.

[Kirk W]

I was thinking we could start a monthly budget and try to stash 6 months out for savings.

The best answer for you depends upon a very different set of criteria than it does for most of us who are responding because you are at a very different point of life from what we are. The question is no less complicated for you. Being as young as you are, you are probably much more able to rebound from mistakes than most of us. You have less health issues than most of us and because of that your health care insurance will not be nearly as major an expense as for the majority of those posting here.

 

In order to determine the minimum amount of savings that you need you must first consider what you might have by way of expenses both now and at some point in the future. The amount needed to begin your adventure is probably minimal, as long as you plan things such that you are able to slowly build your reserve fund. Somewhere down the road you will probably want to make some changes in your life by either buying a home-base, a new/different RV, another vehicle, or any of a host of things which nearly everyone buys at some point. The key is to figure out what you will want in the future and start a plan to acquire the needed assets to buy when that time comes. For just starting your travels I would think that a reserve of enough to survive for 3 months is probably sufficient, but because appliances break down and wear out, you also need to plan to build the reserve funds as you go. You need enough to pay for at least some repairs as needed and that amount depends partly on your ability to do your own repairs. You will need food and fuel to travel.

 

There have been threads and polls about the amount that most of us spend when fulltime and the average we came up with was about $30K/40K per year, but you seem to be planning a more conservative budget so I'd look to more on the order of half that amount to get started. I think that the goal of 6 months expenses in savings is a pretty reasonable one, but you can probably start with somewhat less, if you have a plan in place to build that amount over time.

 

Being in your 20's you should think in terms of building a larger savings fund for eventual use in addition to the short term emergency fund. It is far too early in your life to accurately predict what you may want or need in the future but time is your friend so starting small and building slowly is not only practicle, but that is exactly the way that most of us who have comfortably sized assets acquired them. The secret to living well is not having all the money you need to be happy, but rather it is being happy with the money that you have. Financial security is more a matter of good money management than it is of income ability. Keep good records so that you know where your money goes and that will go a long way to having enough of it.

[freestoneangler]

We've been planning early retirement for many years. I think perhaps most important is a very critical and honest assessment of your annual spending habits. We've been working with a financial planner over the years and the one thing he emphasized is that no one but you can establish how much you need to live. At his recommendation, I totaled our expenses over the last 3 years; A to Z, soup to nuts, to develop a good number. From this basis, you can then determine what new expenses will come into the picture and which will go (i.e., you plan to no longer have a house). I would then increase your estimated living expense number by 10% as a safety margin.

 

From there it is pretty easy to create a credit/debit ledger and see if your annual income will cover the living expenses. This will then translate into how big your nest egg needs to be (or at what age the nest egg balance goes to zero). Don't forget to account for future value of money (inflation)... again be conservative, I would use 3%.

 

If you are indeed in your 20's. now is a good time to be asking these questions if, like me, you would like to retire early. My advice to you is what we did. Find ways to be frugal so that you can maximize your 401K savings... and absolutely take advantage (maximize) matching offers from your employer. That is free money and you will be amazed how early investments build that nest egg as the years roll along.

 

Good luck.