By Tom Nichols

Our financial gamble to retire early in 2015 and live on IRAs as New American Nomads worked out pretty well.

Despite a historic downturn in stocks and bonds in 2022, we ride into the future with our retirement nest egg intact in dollars, though NOT in inflation-adjusted dollars. We withdrew five percent of our assets each year to fund our early-retirement dream.

Now, our full-retirement income gives us the freedom to make plans for buying a house of our own some day and continue our travels in The Epic Van as long as health permits. Our income is fixed, no longer uncertain, which is why this is my final report.

In 2014, Judy and I quit our jobs at ages 58 and 57, sold our house in Scottsdale, Arizona, and agreed to slash our budget. We could get by on $60,000 a year instead of $150,000. We would live in the Epic Van for nine months and lodge at Judy’s mother house, across the street from our old house, during the winter. I agreed to a one-year trial, but became hooked on nomadic life.

Turns out it took $68,475 a year to finance our wandering ways. I suspect we’re typical in underestimating the real cost of early retirement by ten to 15 percent.

A mostly rising stock market since 2015 made up for our irrational spending exuberance, but please don’t depend on it if you’re thinking of early retirement.

In summary:
Epic Van expenses were $20,542 a year, about 30 percent of our annual spending. That’s $7,344 a year for loan payments, $5,734 for Sprinter service and repair, $4,344 for fuel, $1,908 for insurance and $1,212 for licensing.

(We drove the Epic Van an average of 22,000 miles a year before Covid, and an average of 12,500 miles a year for the last two years.)

If you follow us, you know from previous budget reporting that we spend about $24,000 a year on groceries, dining and entertainment.

The rest goes to health spending, storage, digital services, clothing, camp gear, taxes and gifts in that order.

In 2023, we entered a wealthier dimension, officially in “full retirement” as defined by the Social Security Administration. That’s 66 years and four months, which I hit in April.

Flush with Social Security income and a couple of defined-benefit pensions, Judy now 68, and Tom, 67, have a more solid financial base for retirement, about $94,000 annually. I wish this foundation could be available to more of my fellow Americans. In 2022, median household income was $74,580. With about $60,000 in annual IRA withdrawals, Judy and I move into full retirement with about double the U.S. median household income.

(We’re spending some of the windfall for global travel. Judy went to Morocco earlier this year and we both plan to go to Vietnam in 2024.)

No wonder young folks burdened with soaring rents, child-care costs, grocery inflation and student debt resent us for our Boomer safety net and wealth accumulation.

Older Baby Boomers, those 70 and over, have amassed more than $14 trillion in net worth since 2019. They hold 30 percent of the nation’s wealth.

While chatting with fellow travelers at campgrounds since 2015, I’m constantly income profiling others based on things folks share about their lives. I speculate that most campers are either substantially above or substantially below median income. We’re atypical to have wandered on $68,000 a year, near median. I never talked to any other couple who exchanged their house for a customized Sprinter and were living on IRAs. Either campers have enough money for the fancy van AND a house or two, or they are stretching their modest incomes to buy a recreational vehicle and enjoy precious vacation time outdoors.

On top of the income ladder, there are rock climbers we met near Moab, Utah, with four-wheel drive Sprinters who have homes in Boulder, Colorado, and San Diego. At the bottom of the ladder, more typically, there’s a veteran with a 25-year-old pickup and trailer who works odd jobs and camps in summer at Colorado National Monument near Grand Junction.

(In addition to watching for income clues, I’ve learned campers are surprisingly diverse in occupation, creative pursuits, sexual orientation, spiritual and political views, though overwhelmingly white.)

For some, van life is glamorous. For some, it’s a grind to make ends meet. Most are somewhere in between. There are hundreds of thousands of folks in the United States, maybe several million, getting by and finding refuge and community at camp, like those presented in Nomadland. Many full timers we met while volunteering at parks do it to get by, living on a disability pension, Social Security check or other limited assets, shifting from north in summer to south in winter, depending on free rent at camps to survive. Their experiences help us appreciate our financial health.

Judy and I treasure an hours-long breakfast under our comforters in a cold-weather camp, reading a book together while rolling through the Great Basin, having a campfire dinner with friends on the Pacific coast, hiking through natural wonders or reflecting on our nation’s conflicted history at memorial sites.
When you have money, you have the luxury to focus on esoteric things.

It’s a good thing we both value the esoteric because things in the tangible world have become more expensive since 2015. Home prices in our neighborhood in Sherwood Heights have doubled since we sold. Things may have gotten too expensive to live in our old neighborhood for the long term. Adjusting for inflation, the value of our nest egg buys 30 percent less stuff than it did in 2015.

(One example: van insurance rose to $186 a month from $116, a 38 percent jump since we began our journey.

Looking ahead, we plan to use some of our additional income to pay off our $60,000 debt on The Epic Van, then buy a house in Phoenix.

Our ambitions are for 1500 square feet, two bedrooms, two bathrooms, with a garage or shed that can serve as a studio for Judy’s upcycled clothing business. We would like some outdoor living area and space for RV parking, with full hookup, to share with visiting camp friends.

We should be able to afford a median-price home in Phoenix, now about $425,000, and wander in The Epic Van for five summer months.

If detached homes in Phoenix become too expensive, we’ll get a patio home or condo, or rent an apartment. I’m trying to get Judy to consider renting as a way of maximizing travel dollars. I’ll let you know how that goes.

What if stock markets crash or inflation or political chaos rages out of control, slashing the nest egg and safety net?

Then it’s time to buy a dwelling in Arizona’s high desert and stay for three seasons. The Epic Van can serve as a summer mountain home.

For me, our real financial challenge in full retirement is directing more of our money toward doing good for others. That’s the subject of future money posts.