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Old 08-29-2016, 03:54 PM   #41
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Suggest the OP check out what services are available at the closet senior citizen center. It really seems like some onsite help is what the OP needs at least in the short term to see what options are available due to hardship or whatever to get out of that lease without forking over $15k May just be wise to up and leave and go buy that RV for cash in AZ like bmcgonig suggested, but just having someone local to talk to will help in of itself.
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Old 08-29-2016, 04:04 PM   #42
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Originally Posted by Forced to Retire View Post
I currently rent with six months left on the lease. I am single and don't have any friends or family I can depend on.
Well look at positive things. You are not bound to any place. You should consider moving into cheaper and nicer area where you could live well on 2k and have better quality of life. I would withdraw 750 a month from your portfolio plus take 1250 SS. That is total 2k.

Like
Guanajuato Mexico
Olomouc Czech Republic
South Western France

I would not remain in your high cost of living area any longer.
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Anyone else here forced to retire and scared to death?
Old 08-29-2016, 04:28 PM   #43
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Anyone else here forced to retire and scared to death?

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Originally Posted by JoeWras View Post
We have a couple of extreme ER people who are much younger and are retiring on similar funds. So there is hope. Too bad, many of these people don't participate here much recently.

For housing, consider some of the senior housing options. I'm not talking assisted living, but rather regular apartments that the local government helps subsidize with. My area has a few organizations that specialize in affordable housing. This is not public housing either.

Consider your options.


Yes, it is my indirect experience especially in small rural MO towns that I have lived in there was subsidized senior duplex style apartments available. Heck, when I was young and fresh out of college I lived in one...They did not have enough seniors to rent them out. When "The Feds" came to audit they gave me warning to disappear for the day. I have had my 2 grandmas live in them in other towns, also.
My daughter lives on $9.25 an hour on her own, in her own apartment even making a small monthly car payment. Has never asked for a penny in the year she has been on her own and has managed to save over $1000 somehow. She got on the ACA also.....


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Old 08-29-2016, 04:43 PM   #44
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I don't believe this is normal, but...

I have a relative that was forced out of work at 58. She also has, one might say, an eccentric outspoken personality that led to a lot of firings and difficulty getting a new job. At 58 she had $80K in savings. She spent from then until 62 looking for and failing to find work, then at 62 took SS and called herself retired.

With $80K, she managed to rent an apartment, maintain an old car, entertain herself during the day, eat decently enough, and make it through. She is now almost 70 and she has frugal living down PAT. She spends about $950 each month, with $560 going to rent on a small apartment (water-sewer-trash included) and the rest going to bare necessities. Her healthcare is nearly free due to lack of income, she knows every free event within walking distance of her place and goes to all of them, and she does things like turning in aluminum cans and cardboard for pocket money. I believe she gets ~$700/mo in SS and draws the rest from her savings, which is currently around $45K. She lived with a roommate for several years from 58-66, so her expenses at one point were something like ~$6000/year.

Definitely not a normal lifestyle, but if she can do it others can do it too. There also used to be a woman who blogged extensively about living on $1000 a month. Does anybody remember that website? That'd be a great resource for OP.
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Old 08-29-2016, 04:46 PM   #45
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Housing in the south is quite affordable. Our condo in Florida will cost us about $7k a year (HOA fees, property taxes, insurance, power, etc.) and it would be even lower for a resident as property taxes would be homesteaded. Also, while we are in a modest area (ours was in the mid-to-high 100's for a 2 bedroom with a den) since the OP is single he could probably get a decent one or two bedroom for the low 100s and I suspect that annual costs would be lower.

So let's say he buys a $100k condo and puts down 20%... at 4% a 30 year mortgage would be $482/month or $4,600 a year. Add in other ownership costs and you're talking less than $1k a month to own.

If he can't get out of his lease and stays in VA for 6 months then he'll drain his $300k down to say, $279k. The down payment will ding it down to $259k and at 4% that will provide $10k a year, so $25k a year with his SS. Deduct $10k a year for housing and that leaves $15k a year for food, etc. Not a king's ransom but perhaps doable if one is frugal. Plus, he may be able to supplement it with some part time work.

Firecalc gives 100% success rate to withdrawals of $21k a year on $260k 60/40 portfolio over 30 years with $15k a year fo SS starting in 2017 and $4,600 of off chart spending starting in 2016 and ending in 2046 (the 30 year mortgage). Add another $1k a year of withdrawals and the success rate declines to 95%.
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Old 08-29-2016, 05:07 PM   #46
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So let's say he buys a $100k condo and puts down 20%... at 4% a 30 year mortgage would be $482/month or $4,600 a year. Add in other ownership costs and you're talking less than $1k a month to own.
Is a mortgage an option for someone like him with low SS income, very low investment income and no earned income? He may have to settle for renting a place that doesn't do an income test. My current apartment only required a credit score of over 600, no income check at all.
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Old 08-29-2016, 05:23 PM   #47
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Hang in and enjoy your life, you deserve it. Obviously cutting costs is very important, much of that you can control. I have far less than $1 million but am watching what I spend and am presently downsizing to a lesser costly area. Life is not always easy but usually doable....stay positive.
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Old 08-29-2016, 05:25 PM   #48
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I wouldn't see why not... SS counts as income and there is a new way that they count income from retirement savings.

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Social Security income and pension income are always counted. The lender can gross-up the income by 25% (give you credit for 25% more income) if you don’t pay taxes on it. The best way to document Social Security or pension income is to have the funds deposited directly into your bank account. Otherwise, provide copies of the award letters from Social Security or the pension plan.

Job stability, even part-time, can help you qualify. But most lenders will not consider part-time employment unless you’ve had the same part-time job for at least two years.

Income from retirement accounts is a gray area. The way lenders view it varies widely. Arm yourself with two years of statements showing consistent annual dividends and the income will be more likely to be well received and considered in your favor. If you don’t receive monthly income from your retirement accounts, you might find a lender who is willing to qualify you through asset depletion – amortizing a portion of your assets and applying it as income.

In any case, you’ll need to show enough retirement income to meet the debt-to-income (DTI) ratio requirements of the lender. That means that the total amount of money you are obligated to pay each month toward debt (including the mortgage you’re applying for) cannot exceed a certain percentage of your total monthly income. For example, if the lender’s DTI limit is 40 percent and your income is $2,500 per month, the lender will want to see that you spend no more than $1,000 on all of your debt, combined, including any auto loans, credit cards, student loan payments and other debt.

Furthermore, your mortgage payment alone (including taxes and insurance) cannot exceed a separate, lower percentage, generally around 28 percent of your income.
And the above was written before other rules on counting retirement savings went into effect which allow lenders to count 70% of retirement assets divided by 360 months.

So for underwriting the loan the lender would look at the $1,250/month of SS (and perhaps gross it up to $1,666 if it is not taxed) and $505/month (based on $260k*70%/360) so say $2,150/month and PITI would be probably $632/month ($482 mortgage payment + $150 for property taxes and insurance) and that would be 29% of gross income. Not a slam dunk, but possible I suspect.

But you make a good point that the OP may need to rent until his SS has started and he can qualify for a 30 year mortgage based on income.
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Old 08-29-2016, 05:30 PM   #49
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So many good and thoughtful answers, thanks.

I went to my landlord, at the large corporate owned apartment complex I live at, and they told me I could leave as soon as my lease is up. Or I could leave immediately if I paid off the entire lease term. With rent about $2500 a month I would have to pay them $15,000 to leave. (I have six months left on my lease.)

In the mean time my forced early retirement is quite expensive. After cutting my expenses to a bone I got my costs down to $4000 a month. (Rent and COBRA is about 80% of my fixed expenses.)

According to this website, I can make my money last with a five percent withdrawal and a three percent annual inflation increase for 30 years:

[mod edit]

So how could I move to a new apartment in a quiet small town setting where the cost of living is very low if I have no income? Everyplace I have ever lived has done a complete background investigation about my assets and income.
There's always the option of buying a place.

http://m.trulia.com/property/3042510233-219-S-Atlantic-Ave-208-Daytona-Beach-FL-32118
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Old 08-29-2016, 05:33 PM   #50
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$2,500/month rent is way too expensive for the OP's budget. It sounds like he got a typical response from a big corporation citing the terms of the lease, rather than a concerned person understanding the individual's situation and working with them. I would get some local advice on how to break your lease. Don't let a big corporation push you around and force you to spend money you can't afford. There has got to be a way to break your lease without giving them six months rent. That's just ridiculous.
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Old 08-29-2016, 05:33 PM   #51
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Oneday, are you from Daytona?


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Old 08-29-2016, 05:35 PM   #52
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Could you take in a roommate to share the rent over the next 6 months? Is it possible to sub-lease the apartment, while you find a cheaper location?
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Old 08-29-2016, 05:36 PM   #53
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Are you able to get unemployment?
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Old 08-29-2016, 06:07 PM   #54
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Oneday, are you from Daytona?


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No, I have a cousin and a friend who live there. I enjoy visiting when I get a chance and plan on spending my winters or possibly staying there year round or somewhere in Florida when I retire. I like the idea living on the beach, lots of free entertainment " walking the beach " and the fact that I'd get year round exercise.
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Old 08-29-2016, 06:10 PM   #55
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Cool. I have family there too
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Old 08-29-2016, 06:34 PM   #56
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What kind of cash are you drawing to support your current expenses and for the next 6 months? Is it from a severance package or is it the same $300k retirement portfolio?

Can you post your monthly expenses for the forum members to look at?
Can you rent a room in your apartment?

By your own admission, apparently you've been fired plenty of times before. It might tell you that you should strive to work on your attitude a little bit .

You came to this forum and made complaints that your life sucks because you live in an expensive area and that everything is totally expensive. But people cannot help you much if you don't provide detail. And one more thing. When people provide suggestions/ideas you'll have to act, they cannot do it on behalf of you. Like my friend (who's 65) says it's all about attitude. If you always act miserable and don't enjoy your days nobody can help you.

List skills, work experience you have and you might hear some ideas how to use them and earn some money.
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Old 08-29-2016, 07:06 PM   #57
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btw.. to answer your initial question - yes. Planned on a few more years, but downsized earlier this year.
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Old 08-29-2016, 07:27 PM   #58
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It will be interesting to see if the OP returns and continues the conversation. He/she was here for a few hours, but not since then. I hope he does come back, there's a lot of good information listed above. I personally agree most with the suggestions for a change of locale. I'm pretty well situated financially, but I still left the DC area after FIRE because it's crazy! Crazy busy, crazy expensive, and full of people who think politics actually is important.


The OP says he has no one to depend on, so a move to someplace like FL or one of the even cheaper COL southern states is a good idea. Plus there's lot's of work in FL, and they are used to hiring older people. But if there is a reason to stay closer to DC, there's still places like Richmond or Charles Town WV or Front Royal that are within an hour or two of DC but much, much more affordable (not job friendly though). I think getting into a less expensive housing situation would give him some breathing room to make other decisions.


I hope he comes back and gives us some updates. Good luck, OP.
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Old 08-29-2016, 08:31 PM   #59
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$2,500 a month rent is crazy! So many beautiful apartment complexes in Florida. Include cable, 24 hour fitness facility, spectacular pool for $800 a month.

His rent is killing him.
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Old 08-29-2016, 09:19 PM   #60
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I agree with the rest, OP has to move to lower COL. Current rent and COL is unsustainable.

As for breaking the lease, he can bail out and then he is only responsible for the rent up to the point the apt is rented out again to a new tenant. Not for the entire 6 months remaining, unless they do not find a new tenant. He is responsible for the lease term, but only if the apt is not re-rented out. The apt owners can't double dip.

I think finding some part-time work is the answer to get through the 6 months if OP wants to stay until lease is up. Keep looking, there will be something that comes up and you meet the needs for the job.
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