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Is Retiring on a Cruise Ship Right for You?

Retirement Planning
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old couple eating ice cream on a cruise and wondering if retiring on a cruise ship is right for you

These days, sustaining an active retirement requires more than the once commonly advised $1 million, according to CNBC. But that number is likely informed by a certain kind of retirement — one that includes a mortgage or rent, utilities and transportation costs. This is what a traditional, land-based retirement typically looks like, but there's another option you might not have even considered — retiring on a cruise ship.

Yes, cruise ships are designed for vacations, but for seniors and baby boomers nearing retirement, this lifestyle may be a viable option. If you're leaning toward a more adventurous retirement, and are interested in stopping at different ports and seeing more of the world, here are some things to keep in mind when considering life on a cruise ship.

Travel Costs

First, consider your travel costs. Cruise Market Watch reported that the average cruise ticket price is about $161 a day, while passengers spend another $62 a day on board. Most cruises are all-inclusive, which means you won't have to worry about paying for food. However, you'll also have to factor in spending at the different ports and cruise destinations, which averages around $104 per passenger for a typical cruise that lasts five to seven days, according to the 2018 Cruise Industry Overview by the Florida-Caribbean Cruise Association.

If you retire on a cruise ship and live on the boat for 365 days a year, you're looking at an average cost of nearly $87,000 per year. However, cruise lines often have deals, which could help make certain trips less expensive. You could then budget accordingly for discretionary expenses like excursions and shopping.

Health Care

Medicare typically doesn't provide coverage when you travel abroad. However, in some situations, Medicare Part B might help pay for certain health care services when your ship is docked or traveling through certain locations close to the U.S., according to the Centers for Medicare and Medicaid Services.

Health care is typically a big retirement expense, especially as you age, so consider making sure you're sufficiently covered for your needs. If you plan to live on a cruise ship, you might consider taking out travel, critical illness or Medicare supplement insurance to help offset some of your health care expenses or to at least provide some coverage if you need to return stateside for care.

Lifestyle & Logistics

Another important thing to consider is whether the cruise ship life is right for you. If you're a travel buff, it may be exciting to visit different locations every few days or weeks. But if you thrive on routine, then staying on land may be a better fit. You could also consider a hybrid approach, where you live on a ship for part of the year and spend the other part in a smaller home or apartment that meets your needs.

Logistics may be another concern. If you own a home, you might consider selling it or renting it out, but in the latter case, you'd then have to manage the property and respond to tenants while you're away.

Staying on top of financial obligations is another challenge. You likely won't want your mail or important paperwork delivered to the cruise ship — in fact, you may not even have space for it in your cabin. Plus, figuring out how to address mail to ensure it's delivered to you may make things complex, especially if you don't stay on the same ship. Instead, you could consider a P.O. box or switching to digital bills or automatic payment options.

Cruising to Retirement

Retiring on a cruise ship may sound like a dream, but before you set sail on your adventure, you'll likely want to plan thoroughly. First, consider looking at your retirement savings, Social Security benefits and other income sources, and then crunch the numbers to see if you can afford to retire on a cruise ship. Even if you can't do it full-time, you may be able to travel part-time or several months out of the year. The most important thing is to make sure this approach is sustainable and that you can truly enjoy an alternative retirement without additional financial worries.

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Information provided is general and educational in nature, and all products or services discussed may not be provided by Western & Southern Financial Group or its member companies (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. Consult an attorney or tax advisor regarding your specific legal or tax situation.