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Eager to ER into new house
Old 04-06-2013, 01:58 PM   #1
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Eager to ER into new house

I have been lurking on and off for a few months, and now decided it was time to jump in. I am currently 54, DW is 52, and we recently bought a house for our future ER in Bend, OR. We are renting it out until we are ready to retire and move from the NE. I am wondering how many other folks have done home purchases in advance like this, and what you did with them until moving in. In our case, it doesn't work very well as a vacation home, being on the opposite side of the country.

For a while, our plan was for me to ER at 60 and work for a while on preparing our current house for sale, while DW continues to work (and cover health insurance). We would then move the following year. However, since buying the house, I have developed an increasing desire to ER sooner. Contributing to that desire is that my job at MegaCorp has lost most of its appeal since I had to move to a different project. DW is OK with her job, but wouldn't mind leaving earlier too.

I think we are in pretty good shape financially. We have no debt except for the new house (at 3%) which we plan to pay off when we sell the current house. I have been playing with Financial Engines for over a year, and recently tried Fidelity's Retirement Income Planner and FIRECalc. We both have grandfathered pensions available, though my benefit isn't really growing since MegaCorp discontinued it for new employees. My pension of $25k would start at 60, while DW pension has significant reductions if taken before 65, when it would be $21k (assuming she works until 60). Our estimated SS at full age (again assuming work until 60) is about $29k and $24k. Current combined 401k of about $650k, rollover IRAs of $300k, and Roths of $165k (overall AA stocks 70%, bonds 25%, cash 5%). DW might continue to work part-time for a while after ER to get reduced cost for health insurance, depending on what happens with the state exchange.

At this point I would invoke the plan next year at 55 instead of 60, as I believe even the reductions in pensions and SS would still leave us with sufficient income, but there is one catch. We can't really leave the area yet, as we are the only family and support system (not financially) for DW's parents. One is in a nursing home, and the other is still living independently but in marginal health. I am sure that there are others who have been in similar situations of waiting.

I'm interested in any comments or observations by forum members.
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Old 04-06-2013, 02:54 PM   #2
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First thought was about parents... Whatever the situation, would suggest consulting an elderlaw attorney... Most important for their benefit and your benefit.
Personal experience... a relative almost made an $800K mistake, saved only by consulting a senior benefits lawyer.
With wisdom that comes from experience, have watched too many suffer from not understanding the law.
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Old 04-06-2013, 03:35 PM   #3
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We bought a 45 year old seasonal lakefront "camp" that was about 40 minutes from home. We lived at home during the winter and at camp during the summer and split fal and spring. We originally planned to renovate the camp as our retirement home but we ultimately convinced to demolished it (down to the foundation) and rebuild, which we did in 2010-2011.

Carrying another home was running ~$20-25k a year between the opportunity cost of our investment, taxes, utilities, heat, etc. When we sold our main home in late 2011 it significantly reduced our expenses and the proceeds increased our nestegg and I decided to retire.

Since you are geographically bound at this point, if I were in your shoes I would continue to rent it out as long as you have/can find good renters. With respect to your current home, you could either continue to live in it or sell it and rent a condo or apartment near to where your in-laws are.

One thing I wouldn't underestimate is the time and effort in de-cluttering and getting your home ready to sell. It might be a nice post-retirement project to keep you busy.
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Old 04-06-2013, 03:36 PM   #4
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First, welcome to Oregon.

I agree that your should visit with an elder law attorney, then make an appointment with that attorney for the one living independently. Basically you want to make sure that you can meet their needs and won't be required to seek a guardianship. The documents should be written to comply with the laws of Oregon and the state in which they now reside. The first time I had that discussion with my parents they assured me that all was in order so I asked to see a copy of what they had (except for their wills). It was a mess. I encouraged them to hire an attorney, gave them a couple names, to straighten it out.

When the parent in the nursing home passes away perhaps the other parent will be willing to move with you to Bend. They have excellent physicians and hospital there as well as several retirement/assisted living communities.

You should have no problem finding a good renter, many want to move our direction.
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Old 04-06-2013, 03:41 PM   #5
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Since you are geographically bound at this point, if I were in your shoes I would continue to rent it out as long as you have/can find good renters. With respect to your current home, you could either continue to live in it or sell it and rent a condo or apartment near to where your in-laws are.

One thing I wouldn't underestimate is the time and effort in de-cluttering and getting your home ready to sell. It might be a nice post-retirement project to keep you busy.[/QUOTE]

+1
when the duties of care for DW's parents are over, then use the Oregon home as a vacation home for one year while you declutter/prepare for the move.
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Old 04-07-2013, 05:12 PM   #6
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We're not truly ER folks, since I'll be 63 in August and DW is 53--and I'm still working, professor at U North Texas and a choral director. But I've been around here for a long time, mostly lurking and learning!

Much like the poster, we just bought a condo in Sequim, WA for eventual retirement--we formerly lived in Tacoma, WA from 1983-2009, when we headed to TX to teach at UNT. I taught at Pacific Lutheran University from 1983-2001 and was conductor of a professional choir in Edmonton, AB (although continued to live in Tacoma) from 1999-2011, plus free-lancing during the time after I left PLU.

The condo can be found here: 2 Bedroom 1 3/4 bath Condo in Sunland on the fairway, one floor level with 2 car garage. | Action Property Management

We will rent the place out--have an agency to handle for us and the owner (a former mayor of Sequim) was very honest that we were unlikely to get it rented until the summer.

While we thought about using it as a summer place, part of my job at UNT is administrative and I need to be here much of the summer (unfortunate, given Texas heat!).

We're looking to be in a position after three more years to pay off the condo completely, plus have enough cash to do whatever reno we need/wish to do to bring it completely up to date and such that we'll have minimal maintenance looking ahead from there.

At that point I can retire entirely if we want, or may have the possibility of continuing some work as a conductor, or even doing some sabbatical replacements.

We own a house here in Denton, TX and are exploring various options, from taking in a boarder to cut down on expenses, selling in another year and downsizing to a similar-sized apartment here. Many are the discussions we've had!

And it's always possible I'd want to work longer as well--but only if I dumped the administrative part of my job, was doing the teaching I still love, and at that point, with the condo paid off, we probably would use it for summers and enjoy the relief from oppressive heat here and the pleasant summer weather on the Olympic Peninsula.

It's something that I expect will evolve as time goes on--hard to predict in advance exactly what we'll do.

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Old 04-07-2013, 11:43 PM   #7
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Quote:
Originally Posted by Cat-tirement View Post
We recently bought a house for our future ER in Bend, OR. We are renting it out until we are ready to retire and move from the NE. I am wondering how many other folks have done home purchases in advance like this, and what you did with them until moving in. In our case, it doesn't work very well as a vacation home, being on the opposite side of the country.

For a while, our plan was for me to ER at 60 and work for a while on preparing our current house for sale, while DW continues to work (and cover health insurance). We would then move the following year. However, since buying the house, I have developed an increasing desire to ER sooner. Contributing to that desire is that my job at MegaCorp has lost most of its appeal since I had to move to a different project. DW is OK with her job, but wouldn't mind leaving earlier too.
I did something similar. I rented my ER place with the aid of a property manager. Then I began to think about what I would like to do with the place once I moved in. I asked myself: what's holding me back? It was the feeling that I was not quite where I wanted to be financially. I was fortunate to be able to find a job in the ER area, so I moved and had time to settle into the area prior to ER.

However, in your case, the elderly relatives need to be supported. I don't think you can go anywhere until they get sorted out.
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Old 04-09-2013, 07:09 PM   #8
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we bought our retirement house in Oregon 5 years ago & rent it out (along with a few others) until we can move from california permanently. we cant wait to get there & travel there quite often. you will love it there, very scenic & peaceful.
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Old 04-09-2013, 08:54 PM   #9
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Originally Posted by Brat View Post
First, welcome to Oregon.

I agree that your should visit with an elder law attorney, then make an appointment with that attorney for the one living independently. Basically you want to make sure that you can meet their needs and won't be required to seek a guardianship. The documents should be written to comply with the laws of Oregon and the state in which they now reside. The first time I had that discussion with my parents they assured me that all was in order so I asked to see a copy of what they had (except for their wills). It was a mess. I encouraged them to hire an attorney, gave them a couple names, to straighten it out.

...

You should have no problem finding a good renter, many want to move our direction.
A few years ago, as we saw the potential situation developing, we did take them to an attorney and went through the process of setting up health care directives and DPOAs for financial and medical matters. As you said, there was certainly some time and prep work to get them thinking along those lines too. We are very glad now to have done that, which has helped quite a bit in the current situation.

You're quite right Brat about lots of folks wanting to move to your part of the country. We're among them. On our past trips to the area, we met a good number of people that had relocated from elsewhere, and they all encouraged us to make the move sooner rather than later.
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Old 04-09-2013, 09:07 PM   #10
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Quote:
Originally Posted by pb4uski View Post
We bought a 45 year old seasonal lakefront "camp" that was about 40 minutes from home. We lived at home during the winter and at camp during the summer and split fal and spring. We originally planned to renovate the camp as our retirement home but we ultimately convinced to demolished it (down to the foundation) and rebuild, which we did in 2010-2011.

...

One thing I wouldn't underestimate is the time and effort in de-cluttering and getting your home ready to sell. It might be a nice post-retirement project to keep you busy.
Our new house is only 7 years old, so we hopefully won't have to go through as significant an effort as you.

We have started thinking about the de-cluttering since buying the house, and it will be a significant undertaking after being in our current house for 20 years now. In addition to clutter, I expect we will also only take about half of our current furniture, due to the smaller house, and the cost of moving old furniture across the country.
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Old 04-09-2013, 09:35 PM   #11
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Originally Posted by Meadbh View Post
I did something similar. I rented my ER place with the aid of a property manager. Then I began to think about what I would like to do with the place once I moved in. I asked myself: what's holding me back? It was the feeling that I was not quite where I wanted to be financially. I was fortunate to be able to find a job in the ER area, so I moved and had time to settle into the area prior to ER.

However, in your case, the elderly relatives need to be supported. I don't think you can go anywhere until they get sorted out.
We will be going out to "visit" the house in a couple of months, before getting a new tenant. I am starting to look for a property manager too, but probably won't make a final decision until meeting with a couple of them while we're in the area.

We knew we were making a commitment when we moved the folks here a few years ago, and we won't be changing that. But it won't stop us from dreaming while we're in the new house.
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Old 04-09-2013, 11:07 PM   #12
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Originally Posted by Cat-tirement View Post
A few years ago, as we saw the potential situation developing, we did take them to an attorney and went through the process of setting up health care directives and DPOAs for financial and medical matters. As you said, there was certainly some time and prep work to get them thinking along those lines too. We are very glad now to have done that, which has helped quite a bit in the current situation.

You're quite right Brat about lots of folks wanting to move to your part of the country. We're among them. On our past trips to the area, we met a good number of people that had relocated from elsewhere, and they all encouraged us to make the move sooner rather than later.
Let me know when you anticipate comming to Portland. If I am arround I would be happy to visit with you.
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