Is Cruising a Cheaper Way to Retire?

For seniors seeking to shed the burden of owning a home during retirement, the traditional path is often a retirement community — but there's an emerging trend of seniors living at sea on commercial cruise ships, from living part-time or seasonally on board to spending years sailing the globe. There are even luxurious resident-only ships catering primarily to retirees. Some options could be less expensive than a traditional retirement, but there are pros and cons.

There are numerous variables involved in calculating the true cost of retirement (not the least of which is where you live), but independent living communities for seniors can be anywhere from $1,500 to $10,000 monthly, or $27,000 to $120,000 annually.

Cruise costs depend on such things as stateroom quality and company, but there are budget trips for under $100 nightly, particularly on off-season or repositioning routes. There are also often senior discounts, sometimes as much as half off for the second person. Among the cruise lines with senior discounts are Carnival, Celebrity, MSC, and Royal Caribbean. "If you can get a weeklong cruise for 500 bucks, and it costs you about $700 when you include tips, that's about $2,800 a month, which is not unreasonable," said Matthew Ure, Texas region president for Anthony Capital. "You might not be going to great locations all the time, but if it's the cruise lifestyle you're after, then you can do it."

Beyond commercial cruises catering to people of all ages, there are retirement programs such as Senior Living at Sea aboard Holland America's custom-designed Amsterdam liner. In addition to the standard benefits, the program allows residents to host family members onboard. Prices are available upon request.

On the upper end of the luxury spectrum are offerings such as The World Residences at Sea, the largest private residential ship on the planet, featuring 165 posh homes for sale, from studios to three-bedrooms. Life on the ship includes a variety of culinary options and a long list of wellness and fitness activities including yoga, swimming, and a regulation-size tennis court. As with Senior Living at Sea, prices are available upon request.

It's important to understand the varying levels of services and amenities associated with land and sea. At independent retirement communities, services such as medication, transportation, and housekeeping are typically limited, but social opportunities and recreational activities are abundant. Depending on the retirement community, you may be responsible for home maintenance and upkeep, although some will handle these chores for you.

Even on ships not specifically for retirees, there are perks and benefits for seniors who opt to take up residence, including provided meals, room service, nightly shows and other entertainment, swimming pools, gyms, libraries, and other activities. There's no home maintenance or upkeep to worry about. "If you love to travel and plan to spend a lot of money doing so in retirement, a cruise ship might be a way to accomplish that goal and have some amenities that might not be available otherwise, depending on the locations you visit," said Misty Lynch, a lead financial consultant for John Hancock Advice.

For commercial cruise ship retirees who do not have enormous budgets, the most affordable accommodations are small, inside cabins. These rooms are often too small for extended living and usually don't have windows. Yes, there are plenty of public spaces, but living for months without a window may become challenging.

Personal health and health care support needs could become a significant issue. Ships typically have infirmaries and a doctor, but services are often limited — comparable to ambulatory care centers. If you're in poor health, have a complicated medical condition, or have chronic health issues, a cruise ship may not provide the support you need. "A prospective shipboard retiree must be in good health, as the cruise lines certainly aren't equipped to function, or interested in operating, for that matter, as an assisted living facility," said David Yeskel, a travel journalist known as the Cruise Guru.

In addition to considering health care support services onboard, keep in mind that these services are not free. On most ships there's a cost to obtain medications or use the ship's infirmary. In addition, "you may need to be transported by helicopter off of the ship," said financial adviser Michael Gerstman, of Gerstman Financial. "There are insurance policies that cover the cost of such transport," but premiums vary based on age, length of travel, and type of coverage.

The nightly cost of a cabin on a cruise ship (or the cost of buying) is just one of many fees and expenses to keep in mind. There are also taxes on the cruise bill, gratuities for staff, internet fees, shore excursion costs, and airfare to the cruise's point of departure. "It isn't going to be cheap to live this lifestyle," said Lynch, of John Hancock Advice. "If you want to do anything beyond the basic included amenities, you're going to have to pay for it — that means excursions, drinks, and spa visits. And if you have too much time on your hands, it might be hard to pass those things up in order to stay on budget."

Yet another cost to keep in mind: storage for personal possessions. Storage fees vary widely across the country but are significant: anywhere from $40 to $50 per month for a 5-by-5-foot unit to more than $500 per month for a 10-by-30-foot unit in a high-cost area such as Los Angeles.

If you aren't ready to sell your home or give up an apartment, there are still more costs and maintenance considerations. "If you haven't sold all of your property before you board the ship, you will need to arrange for someone to take care of your life on land," said Lynch, of John Hancock Advice. "This will mean hiring someone or enlisting family to take care of your property, your bills, doing your taxes, and other real-world necessities. It isn't like a vacation where you can just forget about these things for a while. You will need to plan ahead and pay for help if you don't have anyone willing to take care of things for you."

It's a good idea to meet with a financial professional to discuss the pros and cons. "There are financial, health, and emotional considerations that need to be taken into account and worked through before making any big financial shifts like selling a home or cashing out retirement funds to make this work," Lynch said. "It's an exciting idea and I think more people are going to want to take full advantage of their retirement years and live their best life when they leave the workforce. But ... you should be careful with your money in retirement and have a well-thought-out plan."

If you're still seriously considering an oceanbound retirement after sitting down with a financial adviser and contemplating all the potential issues, try a shorter version first. "Try it for six months; take a test drive," suggested Ure, of Anthony Capital. "If you enjoy the experience and want to do it for the long term, then we can run the numbers to support your decision."

Determining whether a cruise ship retirement is for you depends on what your vision of retirement looks like and how much that dream would cost. Ure maintains there are scenarios in which a cruise ship might be cheaper: "It would be much cheaper to retire on a cruise ship if you have high expectations for your lifestyle in retirement. In other words, if you're expecting caviar, lobster, and room service at home, then a cruise can steeply slash your costs for these services — because you would be, in essence, sharing the payroll for all those services with all the other guests. For those with more modest tastes — even mileage points savers and coupon cutters — a cruise will be significantly more expensive than even a fairly nice retirement community."