When retirees Lynne and Tim Martin approached Westlake Village, Calif., CFP certificant Neal Frankle with the idea of selling their central California home so they could travel the world, Frankle wasn’t exactly shocked.
“Let’s put it this way,” he says. “It was a big change and I wish I would have thought of it! But it wasn’t a shock: In the 12 years they have been my clients, they have made other major changes and big moves. I think for the right person, it’s a very smart thing to do.”
Lynne Martin is the author of Home Sweet Anywhere: How We Sold Our House, Created a New Life, and Saw the World, a lively memoir that chronicles the California couple’s decision to sell their home and travel, but with a difference: They live for up to three months at a time in Mexico, Argentina and Europe, then return to the United States for a month, then embark again.
The Martins’ concept of residing where they travel required a sound financial plan. “We realized we really needed someone to prepare us for the rest of our lives,” says Lynne Martin, 73. “It was love at first sight when we met Neal,” she says of Frankle, a 25-year financial planning veteran who took the proceeds from their house sale in Central California (about $500,000) and added that money to their portfolio.
Martin says they live on about $6,000 a month, which is derived from investment earnings (“We haven’t touched a dime of our capital,”) plus Social Security and savings.
The savings came from 68-year-old Tim Martin’s income as the owner of a small electronics company. Lynne’s income was derived from a public relations firm she operated in Hollywood, from a gourmet cheese company that distributed its products to fine food markets and from an equipment-leasing brokerage firm she co-owned. She also inherited money from her late husband, Guy.
“For people who are enormous proponents of doing it yourself, we had no idea about trading. Neal is a conservative kind of guy who makes moves that help us progress forward, which is a lovely thing for us. We couldn’t possibly keep up with what is going on in the financial world and have as good a time, at the same time,” she says.
Knowing the Martins’ willingness to take calculated risks, Frankle says he believed their choice of life on the road was a good move. “Let’s say you have X number of years to live and you want to maximize your experiences,” Frankle asks. “How best to do that? You could sit on a ton of equity on your house and continue to live in it, or you could live in less expensive digs and use whatever is left over to do what Tim and Lynne are doing. I think that is smart. Who says everyone has to die owning their own home?”
Over several meetings, Frankle and the Martins devised a financial plan that would enable them to live comfortably here and abroad and leave their capital intact.
“It doesn’t matter if you are using your money to create income for retirement or to travel the world,” Frankle says. “The financing of that is the same. The big risk to anyone is—when they are using the lump sum to create income and are scheduling that out for years and years—to make sure they don’t have an ‘Oops! moment,’ like, ‘We want to buy that car,’ or ‘We want to give the kids $500,000,’ and then think they can continue with the same income stream.”
Frankle says the biggest challenge for them was to think of their money as off limits. “It’s an asset,” he says. “They built a plan they could achieve with the least amount of risk, but if their plan does not achieve their goals, then we need to come up with other ideas, or 10 years later they’re working at Flippy Burger.
“They understood that if they had to access their capital, that would require a change of plans. We discussed this and we worked out a plan, which is working, thank goodness.”
People hearing of the Martins’ plan were puzzled. How could it be done? They have four daughters who live with their families in California, Florida and Texas.
“Look, it really doesn’t make any difference how much money you have if you want to live on the road,” says Lynne Martin. “This is arithmetic, not calculus. Just figure out the current overhead, do your homework about how much it costs to live in places that are of interest, add in transportation and compare the numbers. If you have a lot of money, you live really well. If you have less, you might have to put up with a studio apartment and have a few picnic lunches or eat in at night more often. It’s still an adventure either way.”
She says she and her husband are not living as you do on vacation. They eat at home.
“We get to shop in marvelous stores,” she says. “We rent apartments and houses through www.homeaway.com. Millions of places are listed on their Web site. That is the key to our budget. If you stay a month or longer, you can make a better deal with the owner. We negotiate a little bit.”
Coping with minor setbacks on the road such as cultural differences and confronting people’s treacherous driving habits has been relatively easy for the Martins, who “are blessed with incredibly good health,” Lynne says. Still, while abroad, a traveler will need international health insurance (Medicare does not apply overseas). The couple keeps its Medicare and supplemental insurance in the States but then has to take other precautions.
“We buy international health insurance just for the days we are out of the country,” she says. “It guarantees that if something bad goes on, they will bring us home. It’s evacuation insurance as much as anything else.
“In most countries, hospitals don’t charge you. They have more progressive ideas than the United States about health care. International health insurance costs about $400 a month for both of us. It covers catastrophic stuff, like a stroke, and it takes care of us where that happens, and they will bring us home. If you go on www.7corners.com, which is a Web site with international insurance, you can figure out which coverage you need.
She says she and her husband balance their budget by mixing stays in expensive ports with those in modestly priced countries—Paris for three months, then Mexico, Portugal or Turkey for the remainder of their travels.
Their bills are paid online, including their income taxes. She credits Frankle with saving the couple money and frustration.
“He is more than just a money guy. He is a person who makes good investments for us. He also has the long view. Many times he has saved us from ourselves: We come up with wild, madcap things and he says, ‘Let’s talk about this a little bit.’ He has always been right. He is more a life advisor to us.”
She says her publisher has asked her to write a how-to guide to living away from home for months at a time. She does not advise retirees to try working while living abroad, since stringent work laws prohibit visitors from taking jobs away from natives.
Lynne has done book signings and attended seminars to promote her book and is considering going on the paid speakers’ circuit. With or without that extra income, she says, hewing to a careful budget will enable the couple to live comfortably on the road, with stops at home, until they die.
Eleanor O’Sullivan is an award-winning freelance journalist who has written for USA Today and Gannett newspapers. She can be reached at [email protected]