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CYAI: Disney Cruise for the family!

Home Personal Finance and Budgeting CYAI: Disney Cruise for the family!

  • jfoxcpacfp jfoxcpacfp 
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    You wrote they have less savings than you like to see at this stage of a doctors career. They have like 700k between taxable and other stuff along with the pension, at 36 that is crushing it. I know this site is an outlier but even for this site that is doing pretty dang good IMO. Not sure how much more one could expect to have unless we’re going to live in caves

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    You know what – I agree with you. Looking back, I’m not sure why I made that comment, but I think I must have been more focused on years until retirement than age of the physician when I was writing that bit.

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    isn’t years to retirement more important than chronological age?   i get that there are some limitations as to how much you can accumulate in a smaller time frame, but if the retirement age is a personal preference rather than one dictated by circumstance, than that probably should be the marker.

    agree that pensions are an enormous game changer.  as the years go by, the more attractive those pensions sound.

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    It would be in this situation had it not been for the pension – that’s jmpo – and I should have caught that.

    Johanna Fox Turner, CPA, CFP: I am not your financial advisor; any responses are for general purposes only
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #228788 Reply
    Avatar EntrepreneurMD 
    Participant
    Status: Physician
    Posts: 394
    Joined: 06/10/2019

    CYAI – I think they can do it but I also think this kind of spending habit can affect their future lifestyle. Keep in mind if OP and family enjoy the trip very much it will be very hard in the future to go on more budget trips, so I’m assuming it’s not likely to be a one time deal. They want to spend over 13% of their cash reserves on one trip, I suspect it will cost more like 15-20%. Hopefully they factored in expensive cruise ship excursions, tipping, internet, alcohol/soft drinks, spa, specialty restaurants, etc. They may be able to get away with the original cruise estimate if they book early.

    My big concern is that OP and spouse both plan on a very early retirement, possibly not even lasting another 10 years for OP. But even if they survive another 10 or 15 years (spouse) there are concerns.

    Either the cruise they are taking is extremely short, or it likely will cost more than they are estimating, airfare as well. Assuming with school age children they will go in high cruise season – summer or spring break – especially to Alaska. No state income tax suggests they live in a southern state (long flight distance) – suspect airfare will likely be $3500-4K airfare for 5. Hidden expenses for this trip include extra charges for first checked bags, ground transportation, a hotel stay before and/or after the cruise to coordinate the cruise with flights, cruise/flight cancellation insurance etc..

    They are currently spending $140K/year plus taxes or about $200K. I doubt in 10 years they can retire on $100K. Doesn’t see practical with 3 teenage children. That’s a 50% spending hit despite inflation, and their kids will be in peak teen spending years (cell phones, cars, sports, concerts, food, tutoring/college prep courses, etc..). I suspect their spending at the time she retires will be higher than the current $200K, not lower. They only have another 10-15 years to build their nest egg, but expenses in 30 years are likely to be double today ($100K will be only $50K buying power), and in 60 years when OP is in her 90’s it will be quadruple ($100K will only be $25K buying power) today’s expenses thanks to inflation. Doesn’t seem they factored in potentially 5+ decades of inflation. That will be the danger with such an early retirement.

    The issue is not so much the one trip. The trip speaks to the lifestyle they desire. I think this is more of an early retirement planning story. OP and hubby should plan on working longer. Perhaps when she gets her next 10 years in with retirement benefits, she can transition to a higher paying private sector job so she doesn’t have to worry any longer about deployment. She does want to spend $90K on their children’s wedding contributions. What about one day spending on grandchildren, kids first houses, possibly supporting aging parents and in-laws, unexpected healthcare bills, etc.? We all naturally have unforeseen expenses. The earlier they retire, the closer their nest egg will need to be close to $4-5M to support the longer retirement. The later they retire, the smaller their nest egg needs to be to make the 4% withdrawal rate work.

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    washington has no state income tax

    alaska also has no state income tax, but probably not in alaska if going on alaskan cruise?

    sometimes the military pays for kids education, or they may be willing to allow the kids to pay fro their own education.  spending may be higher in retirement-but not necessarily.  especially if a lot of current spend is kid related.  i think they need to finish out whatever it takes to get the pension.  but after that, having a pension, favorably treated for tax purposes in many states,  they can adjust their lifestyle to fit the pension and never run out.

    who knows?  that’s the beauty of life.  everyone finds their own path.

     

     

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    Agreed, but lifestyle adjustment will need to be significant given college expenses are not nearly all of teenage kids expenses. OP planning to pay kids college with transferred $100K GI bill benefits. They’re not adjusting their lifestyle in a decade for 2, they will still be adjusting for 5, with the expenses for the other 3 increasing. $100K/year for a physician’s family of 5 is not easy. Easier to say lifestyle adjustment than do it to such a degree. $100K college funds in 10+ years for 3 will cover only so much of college/professional education. I allotted $800K for 2 children starting in 2 years – college or graduate tuition and expenses in excess of $50K/year for Ivy League.

    Flight Washington state to Alaska should be relatively inexpensive but unfortunately offset by the relatively high (8.92%) state and local sales tax on the cruise/airline purchase.

    #228800 Reply
    Avatar EntrepreneurMD 
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    Joined: 06/10/2019
    Okay, so I enabled a little. 

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    Sounds like it Haha

    Let me guess, they think they will say no to their teens whose friends come from 8 and 9 figure NW families. 

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    I do not have any friends with a net worth of 8 figures and certainly not 9.  I doubt my kids will have any friends with families of that net worth either.

    I live in a middle class neighborhood and my kids will go to public school.  But saying no is an important skill.  And learning what no means is an even more important skill.

    You can live your life however you want but I for one am going to do everything in my power to prevent my kids from demanding the high life.

     

    Hopefully the poster sees this as a once or twice in a lifetime trip.  Not a new yearly occurrence.

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    Unfortunately, my kids circle of friends are almost all 8-9 figure NW families. Most of our neighbors are 8-9 figure NW families. Multiple homes, regular exotic vacations, expensive hobbies, exotic and collector cars are the norm around us.

    WE are an 8 figure family in a low COLA with 20 years to retirement still. What in the world am I supposed to do with the funds if I have the kids living on rice and beans? Do we move out of an exclusive neighborhood? Do I pull the kids out of the most exclusive school in town? Would you? This is a serious question, no smart answers. I’ve been told I spend too much. I’ve been told I spend to little. That tells me, maybe just right. I don’t even know if there’s such a thing as spending too little (on possessions) if you’re still happy, it even seems to make me happier not to bother. It’s the wife and kids that aren’t quite there. My happiness seems to stem from their happiness with their spending mostly on memories but also on things, making it hard for me to reign in further when we compile a lot of unspent cash every year.

    #228808 Reply
    Avatar EntrepreneurMD 
    Participant
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    Joined: 06/10/2019
    My 16 year old daughter Drives a Benz SUV with inflated teenager insurance rate, has the $1K iPhone + MacBook +I Pad, routinely goes over on data charges, goes to private HS school ($10K/year), has an hourly private tutor ($5K/year), is currently enrolled in a summer SAT prep course for $6K, has a private collage advisor ($2K/year), owns a horse plus boarding/vet/show expenses ($11K/year), shops brand names daily/only, fast food is beneath her, room is the messiest for the house maid, demands only the best in travel (Europe, San Francisco/Beverly Hills, Dubai, Far East), music/movie/subscriptions, almost daily Starbucks of course.
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    I’m not going to judge anyone’s parenting but…

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    Annual savings rate 70% after taxes. Should I up to 90%?

    Good parenting =  sharing a macaroon?

    #228809 Reply
    Liked by childay
    Avatar jacoavlu 
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    Joined: 03/01/2018
    What in the world am I supposed to do with the funds if I have the kids living on rice and beans? Do we move out of an exclusive neighborhood? Do I pull the kids out of the most exclusive school in town? Would you? This is a serious question, no smart answers.

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    start a new thread

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #228813 Reply
    q-school q-school 
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    Joined: 05/07/2017
    My 16 year old daughter Drives a Benz SUV with inflated teenager insurance rate, has the $1K iPhone + MacBook +I Pad, routinely goes over on data charges, goes to private HS school ($10K/year), has an hourly private tutor ($5K/year), is currently enrolled in a summer SAT prep course for $6K, has a private collage advisor ($2K/year), owns a horse plus boarding/vet/show expenses ($11K/year), shops brand names daily/only, fast food is beneath her, room is the messiest for the house maid, demands only the best in travel (Europe, San Francisco/Beverly Hills, Dubai, Far East), music/movie/subscriptions, almost daily Starbucks of course.
    Click to expand…

    I’m not going to judge anyone’s parenting but…

    Click to expand…

    Annual savings rate 70% after taxes. Should I up to 90%?

    Good parenting =  sharing a macaroon?

    Click to expand…

    Charity?

     

    #228833 Reply
    fatlittlepig fatlittlepig 
    Participant
    Status: Physician
    Posts: 1287
    Joined: 01/26/2017
    Okay, so I enabled a little. 

    Click to expand…

    Sounds like it Haha

    Let me guess, they think they will say no to their teens whose friends come from 8 and 9 figure NW families. 

    Click to expand…

    I do not have any friends with a net worth of 8 figures and certainly not 9.  I doubt my kids will have any friends with families of that net worth either.

    I live in a middle class neighborhood and my kids will go to public school.  But saying no is an important skill.  And learning what no means is an even more important skill.

    You can live your life however you want but I for one am going to do everything in my power to prevent my kids from demanding the high life.

     

    Hopefully the poster sees this as a once or twice in a lifetime trip.  Not a new yearly occurrence.

    Click to expand…

    Unfortunately, my kids circle of friends are almost all 8-9 figure NW families. Most of our neighbors are 8-9 figure NW families. Multiple homes, regular exotic vacations, expensive hobbies, exotic and collector cars are the norm around us.

    WE are an 8 figure family in a low COLA with 20 years to retirement still. What in the world am I supposed to do with the funds if I have the kids living on rice and beans? Do we move out of an exclusive neighborhood? Do I pull the kids out of the most exclusive school in town? Would you? This is a serious question, no smart answers. I’ve been told I spend too much. I’ve been told I spend to little. That tells me, maybe just right. I don’t even know if there’s such a thing as spending too little (on possessions) if you’re still happy, it even seems to make me happier not to bother. It’s the wife and kids that aren’t quite there. My happiness seems to stem from their happiness with their spending mostly on memories but also on things, making it hard for me to reign in further when we compile a lot of unspent cash every year.

    Click to expand…

    How you described your kids privileged attitude… LORD help Fatlittlepig if that is ever me. It has nothing to do with net worth or spending.

    #228842 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 2138
    Joined: 02/11/2019

    I would not want my kids skimp by in tattered clothes but I also would not want to set them up for a lifestyle they cannot afford without me funding it. It is a fine balance. Ignore the Jones’s and do what you think is right.

    “Never let your sense of morals prevent you from doing what is right.”

    #228848 Reply
    Avatar Anne 
    Participant
    Status: Physician
    Posts: 1233
    Joined: 11/07/2017
    Okay, so I enabled a little. 

    Click to expand…

    Sounds like it Haha

    Let me guess, they think they will say no to their teens whose friends come from 8 and 9 figure NW families. 

    Click to expand…

    I do not have any friends with a net worth of 8 figures and certainly not 9.  I doubt my kids will have any friends with families of that net worth either.

    I live in a middle class neighborhood and my kids will go to public school.  But saying no is an important skill.  And learning what no means is an even more important skill.

    You can live your life however you want but I for one am going to do everything in my power to prevent my kids from demanding the high life.

     

    Hopefully the poster sees this as a once or twice in a lifetime trip.  Not a new yearly occurrence.

    Click to expand…

    Unfortunately, my kids circle of friends are almost all 8-9 figure NW families. Most of our neighbors are 8-9 figure NW families. Multiple homes, regular exotic vacations, expensive hobbies, exotic and collector cars are the norm around us.

    WE are an 8 figure family in a low COLA with 20 years to retirement still. What in the world am I supposed to do with the funds if I have the kids living on rice and beans? Do we move out of an exclusive neighborhood? Do I pull the kids out of the most exclusive school in town? Would you? This is a serious question, no smart answers. I’ve been told I spend too much. I’ve been told I spend to little. That tells me, maybe just right. I don’t even know if there’s such a thing as spending too little (on possessions) if you’re still happy, it even seems to make me happier not to bother. It’s the wife and kids that aren’t quite there. My happiness seems to stem from their happiness with their spending mostly on memories but also on things, making it hard for me to reign in further when we compile a lot of unspent cash every year.

    Click to expand…

    How you described your kids privileged attitude… LORD help Fatlittlepig if that is ever me. It has nothing to do with net worth or spending.

    Click to expand…

    And lord help the kid if they do make it to/through med school and end up as a medical student or resident in my clinic.

    #228849 Reply
    Avatar EntrepreneurMD 
    Participant
    Status: Physician
    Posts: 394
    Joined: 06/10/2019

    OK, let’s refocus on the Disney cruise for OP.

    #228854 Reply
    Liked by Hank, Vagabond MD
    Avatar Panscan 
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    Status: Resident
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    Joined: 03/18/2017

    There’s no way your savings rate after taxes is 70%. Let’s be generous and say youre taxed at 15(which is probably an understatement) % total. You expect us to believe you are doing all that crap you talked about, with the other 15 and saving 70?

    Second you could donate the money to people or causes that need it instead of having your spoiled kid slurp down another Starbucks in their ‘benz

    #228856 Reply
    Liked by MPMD
    Avatar Panscan 
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    Joined: 03/18/2017

    It’s not a dichotomy of raising spoiled children driving new luxury cars, going to Starbucks daily and “expecting world class vacations” or whatever bs you said, vs sharing a macaroon. If you’re unable to see the trillion shades of grey in between those two then I feel bad.

    #228857 Reply
    Avatar MrsIMDoc 
    Participant
    Status: Physician
    Posts: 230
    Joined: 01/09/2016

    Only go on cruise with kids age 3 and up and potty trained, even disney.  Total waste of money as unable to access kid activities with the less than 3 year old.

    #228882 Reply
    fatlittlepig fatlittlepig 
    Participant
    Status: Physician
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    Joined: 01/26/2017
    My 16 year old daughter Drives a Benz SUV with inflated teenager insurance rate, has the $1K iPhone + MacBook +I Pad, routinely goes over on data charges, goes to private HS school ($10K/year), has an hourly private tutor ($5K/year), is currently enrolled in a summer SAT prep course for $6K, has a private collage advisor ($2K/year), owns a horse plus boarding/vet/show expenses ($11K/year), shops brand names daily/only, fast food is beneath her, room is the messiest for the house maid, demands only the best in travel (Europe, San Francisco/Beverly Hills, Dubai, Far East), music/movie/subscriptions, almost daily Starbucks of course.
    Click to expand…

    I’m not going to judge anyone’s parenting but…

    Click to expand…

    Annual savings rate 70% after taxes. Should I up to 90%?

    Good parenting =  sharing a macaroon?

    Click to expand…

    Ummm.. yes we share in this family, especially, calorie laden treats.

    #228884 Reply
    fatlittlepig fatlittlepig 
    Participant
    Status: Physician
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    Joined: 01/26/2017

    The day my kids demand only the best in travel is the day we stop traveling except to the local homeless shelter to volunteer

    the day my kids expect a “house maid” to clean their messy room is the day they get a hard slap on the butt.

    the day I give a mbenz suv to my kid is well.. it ain’t never gonna happen

    the tone of of your post was of bemusement whereas this would be shameful for most people to write.

    FLP

     

     

    #228887 Reply

Reply To: CYAI: Disney Cruise for the family!

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