Retirees: Cruise Ship Retirement Is a Hoax. Invest Instead!

Retirees considering a cruise ship retirement may want to double check the math. If you’re truly worried about income, invest instead.

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Have you seen the phrase “cruise ship retirement” as you scroll through your newsfeed? The claim is that with mortgage rates rising higher, inflation in everything from food to utilities going up, retirees might want to consider the “cheaper” option of retiring … on a cruise ship.

Yes, this claim is real

The claim that retirees can indeed retire on a cruise ship and pay far less has been going around the internet for the last few months. On the surface, doesn’t it just sound amazing? Retirees can hop from ship to ship, their meals and lifestyle completely paid for upfront, and just travel the world in style.

But as with most things, this could be just another item that’s too good to be true.

While there are certainly long-term options for retirees to consider on a cruise ship, with some cruise lines boasting more or less permanent options, there are many things to consider — chief among them, of course, is cost.

If you want to sign up for a lease that will last years, it will certainly cost you. One “resident” purchased a 12-year lease for a 274-foot room, according to CNBC, at a price of US$300,000! Even if you were to do this on a multi-month basis rather than multi-year, which is optional for many cruise lines, it would still cost any where from US$3,500 to US$10,000 per month, according to some sources. That could be US$120,000 per year, which certainly adds up to far more than owning a home as the years go on.

Should you give up your retirement dreams?

Is this something you want do? While living on a cruise ship sounds neat, if you’re considering it as a cheaper option than living in one location, don’t. It’s certainly going to add up quickly over the years, and what’s more, you’ll be away from family, your doctors, and even just a regular routine.

Instead, if you’re truly looking at this as an option to save money, I would consider investing instead. Don’t make some outlandish purchase in a cruise ship residency. Don’t even consider a time share, a second property, or that boat you’ve been eyeing. These are items that don’t hold value.

What does? Investing. Sure, right now that doesn’t seem to be the case. But, overall, the stock market trends upwards. Look back on decades of data to consider this. And if you’re worried as a retiree that you don’t have that much of a future to look forward to, think again.

The average Canadian retires at age 64, as of writing. Yet they live to be around 82 years old. That’s almost 20 years of investing ahead of you and likely even more than that — years where you could be growing your income and not have to worry about some major purchase you bought the decade before.

An investment I’d choose

I mentioned it earlier, but one of the biggest challenges to being on a cruise ship full time would potentially be medical care. And this is where I would invest for steady income. NorthWest Healthcare Properties REIT (TSX:NWH.UN) is therefore a strong option for retirees who need income now and in the future.

NorthWest stock offers a dividend yield at 8.64% as of writing. It has a 14-year average lease agreement, with 97% occupancy. NorthWest stock offers healthcare properties around the world for diverse income from multiple sources. And healthcare is here to stay and will continue to grow, as the world expands and ages.

So, don’t ditch your life on land for a life at sea. If you’re a retiree truly concerned about savings, I would suggest investing in a company like NorthWest stock every time.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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