Take Extended Cruises or Own a Vacation Home?

There are plenty of good reasons why many people choose to spend large amounts of their retired lives exploring the world by cruise ship.

You’ve done well for yourself. Perhaps you’ve taken early retirement. You are in good health. Should you buy a vacation home or take extended cruises and plenty of vacations? There’s a case to be made for each option.

The Pros and Cons of the Extended Cruise Vacation

Taking a world cruise is a lifelong ambition for many people. For others, it’s an annual event. You can spend three to four months aboard a luxury liner for not a lot of money. The cost per day might start at $130-150.

The Pros:

  • You are living in luxury. People make your bed and change your linens. You are dining on spectacular food multiple times a day. The staff looks after your every need. You can lounge by the pool or soak in the hot tub anytime. You have professional entertainment every night.
  • It’s basically all inclusive. Your cruise fare covers room and board. Your incidental expenses might include tipping, your drinks and shore excursions. Your travel agent might arrange for a substantial onboard stateroom credit. Tipping might be included as part of your booking package.
  • You are meeting new people. Your ship might hold 2,000 passengers. You would need to meet twenty new people per day to meet them all in 100 days. Since the world cruise is also sold in segments, new faces are introduced every so often.
  • The scenery is always changing. You are visiting dozens of cities including old favorites and new places. There’s often an overnight in port in the really spectacular destinations.
  • No overhead when you aren’t there. Your vacation home requires paying the mortgage, taxes and electricity bill even when you aren’t using it. When you book a cruise, you are only paying for your cabin for the length of the voyage.
  • No drinking and driving issues. Unless you walk to the pub from your home, going out for dinner involves drinking and driving issues. You must be careful. Aboard a ship, everyone is walking everywhere.

The Cons:

  • You aren’t building equity. The cruise fare is an expense. If you spent $ 20,000 a year for ten years, you’ve spent $ 200,000 and don’t have anything to show for it. There are no tax deductions for your cruise fare. On the positive side, you have great memories.
  • Health insurance is an expense. Medicare and personal health insurance usually stop at your country’s border. You will need to purchase health protection in case something happens while you are at sea or in a foreign country. Fortunately, it’s available.
  • Personal space is smaller. Your stateroom might be 240 square feet. That’s about the size of one of your guest bedrooms back home. You are living in it for 100 days. On the plus side, back home you wouldn’t spend all your time in your bedroom. You would visit your living room and outside deck. Your ship has similar public spaces.
  • Rough seas. Your vacation home might get hit by storms, but the earth shouldn’t move. Ships sometimes run into rough weather. It can be unsettling. On the positive side, like storms, rough seas eventually give way to calmer seas.

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The Pros and Cons of Buying a Vacation Home

You’ve always liked the idea of a mountain cabin or a beach house. It’s a change of scenery you can enjoy as often as you choose. You can entertain friends. What are the pros and cons?

The Pros:

  • You own something. You own real estate and are building equity in your property. It’s an asset that can be sold or passed on to your heirs.
  • Tax deductions. Mortgage interest and property taxes on second homes are generally deductible, up to certain limits.
  • Freedom to use. Unlike a vacation requiring advance planning, you can drive to your holiday home on a whim. It’s always there.
  • You get to decorate your second home. It reflects your personality.

The Cons:

  • The expenses. You are making mortgage payments. Property taxes too. The property needs to be heated and maintained year round. You pay paying expenses for two sets of homes.
  • Limits on deductions. There are rules on the amount of mortgage interest you can deduct. The SALT tax deduction limit of $ 10,000 may mean your property taxes aren’t completely deductible if your property(ies) is in a high tax state.
  • Distance from home. Shorter stays justify shorter distances. There’s a general guideline that a vacation home shouldn’t be more than two or three hours from your primary residence. If it is far away, it isn’t practical to use it on weekends. If it takes six hours to get there, you tend to use it less and less.
  • Over time, the location might lose its novelty. You’ve seen all the tourist sights. You’ve tried all the restaurants. What was unique is now routine. You are doing laundry and making beds in both locations.

Norwegian Sun & flower garden downtown Ushuaia, Argentina – ©Dennis Cox/WorldViews

Dennis Cox is All Things Cruise Writer and Official Photographer



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