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Baby boomers are taking to the road like never before. Annette Sampson has some tips on how to spend your children’s inheritance.

It’s the quiet season at the Norseman Gateway Caravan Park in remote Western Australia. Even so, park managers Stephanie and Lindsay Slater host an average of 15 caravans and campervans a day.

There’s not a lot of reason to go to Norseman. A gold mine provides employment for the population of about 1000. And, being about halfway between Kalgoorlie and Esperance, it makes a handy lunch stop for travellers.

Norseman has a special appeal for the caravanner. It’s the first town at the end of the Eyre Highway travelling west across the Nullabor Plain. And it’s a rare caravanner who doesn’t stop for at least a night to rest and recharge.

The Slaters have been managing the park for only a couple of months, but say they have already noticed that the bulk of their clientele are baby boomers and retirees. ‘We’re told the real grey season starts after Easter when they all head this way to avoid winter,’ Stephanie says.

As Australia’s population ages and the baby-boom generation moves into the early years of retirement, the old Australian dream of hitting the road is the latest revival.

While there is a sizeable group of baby boomers that dreams of a villa in Tuscany or Provence, it’s Australia’s back roads and highways that are proving the big attraction. John Osborne, the general manager of the Campervan and Motorhome Club of Australia, says the association has doubled in size in the past five years and is attracting more than 700 new members a month – most of whom are about 55 to 70.

‘They’re referred to as the grey nomads,’ he says. ‘They joke they’re off to spend their kids’ inheritance and actually name their vehicles [along those lines].’

And we’re not just talking grey power here. Life By Design managing director Ian Hutchison, in his 40s, says for many people still working heading off in a van for a sabbatical is a ‘toe-in-the-water sea change’.

‘I want to do it myself at the end of next year – head off for two or three months,’ Hutchison says. If necessary he’ll pack a laptop and do some work while he’s away. Others, such as the Taits and Fullers in our case studies, have found different ways to combine earning an income with their travels.

While the big trip is often taken in the early years of retirement, Hutchison says he is seeing more baby boomers looking at it as part of scaling down their involvement in the workforce. With more older Australians wanting to maintain some type of involvement in the workforce, he says people are asking whether they can work while on the road or re-enter the workforce after an extended break.

‘These people often choose casual or part-time work over a career,’ he says. ‘It’s easier for people to do part-time work that they don’t necessarily love to give them a foundation to support the other part of their life than continuing in a more demanding job. It’s a different psychology to working five days a week in something you hate.’

Whether you’re looking at a break from the workforce or a new life exploring the world, the hard fact is that you’ll still need money to live on.

BUDGETING

Life on the road can be relatively cheap – just keep in mind the soaring cost of fuel and, to a lesser extent, caravan park fees. Financial planner Owen Weeks, a director of Lifestyle Matters, says your budget should also include an allowance for making the most of your time away. ‘Inevitably you’ll want to do activities like cruises which are once-in-a-lifetime things. You’ll never be there again and you don’t want to miss the opportunity, but it can end up costing a lot of money unless you’re very disciplined.’

Your budget should also allow for any remaining expenses you leave behind (things like rates and insurance on your home) and for maintaining your vehicle on the road. If your van breaks down, it will more than likely happen somewhere where the costs of getting it fixed are horrendous, so you need to plan for regular servicing and maintenance.

Hutchison says one of the big decisions for caravanners is whether to buy or rent the mobile home (and maybe resell it later if you only want to do a one-off trip). With the average motorhome costing $50,000 to $120,000, it may be cheaper to hire if your trip is a shorter one-off. Weeks says some people choose to sell their house and put up to $250,000 into a motorhome that they intend to use as a permanent residence. Given capital city house prices, this can seem a good way of getting a comfortable vehicle, plus some spending money on the side.

Weeks warns that this strategy can be risky. ‘The time will come when one of you gets sick or you just get tired of travelling,’ he says. ‘If you want to come back [to an east-coast city] you’ll find house prices have gone up while the value of your van has depreciated.’

IPAC Financial Planning’s national head, Sally Manion, says planning for big trips may mean liquidating some investments so that you can have more cash available while you’re gone. ‘You have to plan your expenditure and work towards it,’ she says.

‘If you know you’ll have a major expense next year, you may want to average out of the market to pay for it.’ That ensures you don’t have to risk cashing out investments after a market fall.

Experienced travellers say you should also check that your ATM card will work in all states (it should, but there have been instances where some don’t) and that you have back-ups in place so that you can still get cash if your card is lost or stolen.

YOUR BILLS BACK HOME

Technology has made it much easier to handle your finances by remote control. Internet banking, direct debits, credit cards, and facilities like BPay have pretty much eliminated the need for paper transactions and can ensure bills are paid quickly and reliably even if you aren’t at home.

How it’s done is a matter of horses for courses. Manion says most of her clients leave a cash float with a trusted friend or relative who will pay their bills or appoint someone as a temporary signatory on their bank account.

Others arrange for their bills to be forwarded to them.

When making arrangements, remember you’ll need to handle both your regular bills and irregular payments such as rates and insurance. If you know how much they will be, it’s often possible to use internet banking to schedule payments in advance. Manion says you also need to consider how things such as emergency repairs to your house will be handled while you’re gone.

Many people travel with a mobile phone or use email to keep in touch and to ensure they can be contacted if anything unforeseen crops up.

Manion says some people also give friends or relatives a power of attorney to handle their affairs while they’re gone. This is a legal document that gives someone the right to conduct your affairs on your behalf. The power of attorney can be enduring – which means it is ongoing – or limited to a set period and can be as extensive or as limited as you like. You may, for example, give someone a power of attorney to perform one task on your behalf – such as bidding on a particular house at an auction – or to perform a range of tasks such as managing your finances, depending on what you need done and the degree of trust involved.

IPAC recommends that anyone travelling for a long period has an enduring power of attorney for emergencies. It’s like having a will. If the worst happens and you are unable to make decisions on your own behalf a power of attorney allows someone you trust to make those decisions for you.

Anyone heading off into the wild blue yonder should have an up-to-date will and enduring power of attorney in place before they leave.

INSURANCE

A big trip is also as good a reason as any to review your insurance. Is your life, trauma and health insurance up to date and appropriate for your needs? Do you have interstate ambulance cover? Is your home adequately insured and will the cover still apply if you’re leaving your home unoccupied? Weeks says some insurance policies have conditions where the insurance is voided if the house is uninhabited for an extended period. ‘There’s a direct relationship between a house being vacant and being broken into,’ he says.

Weeks says you should also read the fine print on your car or van insurance to make sure it is adequate. ‘Lots of policies don’t allow you to drive on dirt roads, for example,’ he says. ‘And, even though you might think you won’t drive on them, you [probably] will.’

Weeks says a further consideration is what happens to your vehicle if you fall ill while travelling. ‘If you have to come home again, you may not be in a position to drive your van back,’ he says. ‘What happens if you leave it in remote central Australia?’

Osborne says members of the Campervan and Motorhome Club can buy specialist insurance, underwritten by Lumley General Insurance, that pays for you to be flown home and your mobile home transported back or stored. On a less formal basis, he says, the club has local chapters around Australia and members are generally more than willing to provide help and advice to other members.

WHAT TO DO WITH YOUR HOUSE

This is the other big issue. Weeks says the ideal solution for many people is to try to get a family member or friend to stay in your home while you’re gone. ‘There are always unexpected things that turn up and you can’t always handle them from a distance,’ he says.

If you can’t organise someone to live in your home, Weeks says it’s important to have someone keep an eye on it. ‘You should do things like cancel your newspaper delivery, organise for someone to collect your mail and ensure the lawn is mown and the garden tended.’

If you’re away for at least six months, it may be tempting to rent out your home and use some of the income to fund your travel. You’ll obviously need to declare the rent in your tax return, but rates, insurance and other expenses can then be claimed as tax deductions when a property is rented.

Michael Dirkis, the senior tax counsel with the Taxation Institute of Australia, says you are entitled to claim capital allowances and depreciation against the rent, too. Unfortunately, most home owners don’t tend to keep the records necessary to justify a claim for things like depreciation on a dishwasher they installed a couple of years ago.

Dirkis says you can rent out your home for up to six years without losing the capital gains tax exemption that applies to the family home – so long as you don’t claim another property as your principal place of residence during this period.

Weeks says if you’re looking at renting out your home, you also need to consider the Centrelink implications if you are on a pension. You may find your changed circumstances reduce or even wipe out your pension.

A popular option is to have someone house-sit your home while you’re away – particularly if you have pets. HouseMinders International managing director Caroline Wren says house sitters can be organised for as little as two weeks to as long as a year or more. In fact, many house sitters prefer longer stays.

There are a number of house sitting agencies in Australia and they tend to work on similar models. Potential house sitters pay the agency a fee to be registered on their database and must provide references. Wren says her company requires professional, personal and business references and checks them out before registering a sitter.

People looking for a house sitter then have access to this database. Unlike many agencies, which simply hand over a list of names, Wren says HouseMinders charges home owners a fee and in return provides a shortlist of suitable house sitters. It is then up to the home owner to select a sitter and come to an agreement. The agency provides a standard agreement, but it can be tailored to suit the circumstances. As a general rule, says Wren, the house sitter picks up any direct costs they incur and, for a lengthy stay, will put aside some funds for things such as repairs and maintenance. Because there is no rent involved, there shouldn’t be any tax consequences from using a house sitter.

IPAC says another option growing in popularity is house swaps – particularly for people wanting to take an extended break overseas.

GOING OVERSEAS

If you’re heading off on a long overseas sojourn, Manion says, one of the big issues is how to access your money. While credit and debit cards and ATMs have made it much easier to access your Australian savings, you may want to consider setting up a local bank account if you are settling in one place.

‘People resist travelling with a lot of cash for security reasons,’ Manion says. ‘But that makes them more vulnerable to the loss of their credit card while they’re away.’ Having a spare card (stored separately) is one way of ensuring you won’t be caught short.

Health insurance is also a big issue if you’re heading overseas. You need to ensure that your travel insurance has adequate health cover for where you’re going, and provides for you to be repatriated if you need to be brought back to Australia. Manion says you may be able to suspend your local private health insurance while you’re away if you’ll be out of the country for an extended period. Check this out carefully. If you have to reapply for cover or find yourself subject to exclusions when you come back it may be better to keep the insurance going, even though you can’t use it.

INVESTMENTS

Even if you have a set-and-forget portfolio, Manion says it’s a good idea to leave some contact details with your investment adviser. Things can still crop up.

‘Last year, for example, there were changes in the federal budget that affected some pension products,’ says Manion. ‘Some of our clients were away and we really needed to contact them before those changes came into effect.’

Manion says you should take the time to see your adviser and review your investments before you go. Many people, for example, have part of their portfolio allocated for ‘fun money’ – money that they can use to trade shares more actively or punt on more speculative investments. Unless you’re prepared to actively manage that money by remote control, she says, it may be better to switch it to more stable, longer-term investments if you plan a long break.

Weeks says your review with your adviser should also focus on whether there is anything on the horizon that may affect your investments. If there is, you can take action, or put plans in place, to deal with them now.

Weeks says a lot of investments are internet based so you can check on them while you’re away. ‘If you have a wrap account, for example, you can even ask for more money to be put into your bank account online,’ he says.

However, as most retirees have been through enough ups and downs to understand market trends, he says, you shouldn’t have to watch your portfolio daily.

Caravan & Camping Super Show at Rosehill Gardens, April 2-10, 10am-6pm, $16/$10/free.

ON THE ROAD AGAIN

John and Jan Tait, both in their mid-50s, say they’ve travelled every major highway and most four-wheel-drive tracks in Australia over the past 15 years. The authors of Explore Australia by Caravan and three other travel-related books started travelling full-time in 1990 and have barely paused for breath. For several years the couple used their travels to run four-wheel-drive and other tours into remote areas of Australia, as well as collecting data for books. Now semi-retired, the pair have given up the tour business, but are still active in publishing.

Just back from three weeks on the Queensland coast, the pair will be vanning to Sydney for the Caravan & Camping Super Show at Rosehill Gardens (April 2-10) and are looking at a six-month trip to Western Australia later this year.

‘We’ve been away for anything up to three or four months at a time,’ says John. ‘We try to get home around then to tidy up any loose ends, but it may just be taking a break and flying home for a week. We wouldn’t have done that once because airfares were too expensive, but it’s cheaper today.’

John says technology has made it much easier for people to stay in control while on the road. The couple set up direct debits so that regular bills – such as phone and electricity – are paid and similar arrangements can be made for irregular payments like vehicle registration and rates.

Every couple of weeks the couple arranges for one of their children to forward mail by express post so they can deal with anything that comes up. Bills can be paid by cheque, phone or by accessing the internet using a laptop and mobile phone.

Living in a high-rise unit, John says, it’s easy to simply lock the door and walk away. In their earlier travels, when they had a free-standing home, family members would keep an eye on the house and collect the mail. The Taits employed someone to mow the lawns ‘because we wanted to make sure the house looked lived in. The first sign that we weren’t there is an open invitation for someone to come in and help themselves.’

John says they always carry an emergency spare set of credit cards in case their main cards are lost or cancelled. Other tips they’ve picked up over the years include ensuring papers, like registration and insurance, are stored somewhere they can readily be found if needed – and they keep their health insurance up to date.

Like most grey nomads, the Taits have learned to manage their investments at a distance. John says they have a reliable agent who looks after their investment properties and they are able to monitor their investments on the road using the internet. Their agent has their contact details, and those of the Tait’s children, if needed.

‘It’s not as if we’re trading [our investments],’ he says. ‘But it’s important to keep abreast of them because there are always things like floats that come up. Because we have our mail sent on around every three weeks, we usually have time to take care of those sorts of things ourselves.’

SERIOUS ROADSTERS

Neville and Susie Fuller have been ‘serious’ caravanners since they bought their first van in 1987. They are onto their fourth van. ‘We’ve been to a lot of places most people haven’t and we count our lucky stars,’ says Neville.

‘Our first decision was that we weren’t going to do ‘the big trip’ in one hit. We were living in Melbourne at the time and we’d do a section at a time. It was 10 years before we [could] say we’d been around Australia.’

Having retired in 1986, the Fullers were looking forward to uninterrupted years of fun and adventure, but it didn’t turn out that way. Neville says the couple lost ‘a lot of money’ in the 1987 sharemarket crash and went back to work for a couple of years to try to recoup some of their retirement nest egg.

Fortunately, they were able to find a job that suited their post-retirement plans – travelling Australia in their van to take school photos. ‘We were away seven to nine months of the year,’ says Neville. ‘We didn’t touch our investments in those years and so we were able to regroup our finances. The photos paid for our living expenses and the photographic company paid for our fuel and van park fees.’

Neville says the first thing the couple did before they originally set off was to give their two sons enduring powers of attorney so they could handle any emergencies on their behalf. Their financial adviser had their contact details and their sons were able to forward mail.

Neville says the powers of attorney were rarely used, but came in handy, such as when the couple were in Western Australia and their son rang to say their financial adviser wanted them to transfer out of an investment that was going bad. ‘I told him to ask where he had to sign,’ Neville says.

The couple now live in a retirement village, but in the early years kept their family home in Victoria. They were fortunate in that family (and later a friend) needed a place to stay and were able to live in and look after the house. At other times friends agreed to keep an eye on it, mow the lawn and so on. Neville says the couple invested in a computerised sprinkler system before they set off, and after they moved to Bribie Island in Queensland in 1993 they found one of their southern friends or relatives was usually more than happy to take a holiday and stay in their home while they went travelling.

Budgeting for life on the road was not a big problem. Neville says in many respects housekeeping expenses were lower. The couple bought only what they needed (and so didn’t throw out excess food), made use of maps showing roadside stops and other cheap (or free) places to stay, and entertaining expenses were lower. ‘You’re doing bushwalks and things like that rather than going to concerts or the theatre.’

While Neville says the couple are doing shorter trips as they get older, they recently spent three months in the caravan at Mission Beach visiting one of their sons and then another month in outback Queensland.

WHAT IT WILL COST

Most grey nomads choose to buy their own van – a purchase that can cost anything from $8000 to $750,000. And, just like investment products or computers, you need to learn the lingo before you go shopping.

The general manager of the Campervan and Motorhome Club of Australia, John Osborne, says the difference between a caravan and a campervan or motorhome is that the former is towed behind another vehicle while the other two are all-in-one vehicles that are driven rather than towed.

There are advantages to both. A caravan is more flexible because you can leave it at the camp site and go sightseeing in your four-wheel-drive. That’s a bit hard to do with many motorhomes. Towed vehicles are also an advantage in situations where you’ve arrived at the caravan park, hitched your van up to the services and then realised you need to drive down to the local shops to get some snags for the barbecue.

Many people prefer the added security of all-in-one vehicles. They can stay in more remote locations and simply drive off if something goes wrong.

‘Caravans have historically been driven from home to a caravan park, where they stay,’ says Osborne. ‘Motorhomes and campervans will use parks every three or four days, but in between tend to stay at camp sites or places along the way. The people who own them don’t want to be somewhere they’re all regulated in a row.’

A campervan is basically a smaller version of the mobile home. It will often be a ‘pop-up’ vehicle (the roof extends when you’re using it) and more basic than the fully fledged home away from home. ‘But it will still have a porta-potty which will last for a day or two,’ says Osborne.

Mobile homes range from the simple to the sublime and tend to come fully equipped with cooking facilities, loos and varying standards of washing and bathroom facilities.

At the top of the market are vehicles such as converted Greyhound buses that tow a trailer carrying a four-wheel-drive behind and a boat on top. Or, says Osborne, there are vehicles where a four-wheel-drive can be lowered from behind on a hydraulic ramp.

For $750,000, he says, we’re talking super luxury and convenience; vehicles where the bed may retract into a ceiling cavity at the press of a button or, at another push of the button, the living (or bedroom) area may extend outside the vehicle using hydraulic gas struts.

‘You’re looking at all-leather upholstery, washing machine, dishwasher, full-size pantry, full-size bathroom with toilet and shower, an in-house generator, solar panels – everything you have at home except the lawn mower,’ he says.

Osborne estimates, most purchasers would spend between $50,000 and $120,000 on their vehicles. For most, that is the cost of a cheap holiday home. But there are travellers who have made their motorhome their permanent residence and have been on the road for 15 or 20 years.

The Campervan and Motorhome Club of Australia has two rallies a year at which manufacturers of motor homes show their wares and club members open their doors to the public. The next rally is at Horsham in Victoria and includes an open day for the public on April 16. For details visit http://www.cmca.net.au

Copyright © 2005. The Sydney Morning Herald.