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Old 06-12-2008, 04:15 PM   #21
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Quote: For many, depreciating property values spoiled plans to sell the family home and downsize, a common retirement strategy".

I know that this comes up in a lot of financial pubs (including here), but in my "small world" of family/ friends, I know of nobody who has done this "common retirement strategy". While I'm not saying it's not done, I just wonder about the frequency, based upon the "newly retired" population. I could see it in the case in later life if one (if married) person dies, or late-life medical reasons (old-age care/home), but not "we're retired - we need to sell/downsize".
I agree, Ron. People sometimes move during retirement but from what I have seen it is usually to a warmer climate, to be near their grandchildren, or some similar reason. I don't personally know any retirees that have sold their houses and moved to more modest accomodations as a way to raise capital and fund their retirements.

I recall reading several newspaper articles a few years ago, to the affect that boomers were not planning to downsize in retirement and were instead equipping their existing (large) houses with expensive amenities intended to make them easier to live in during later years (whether such stories were mere "editorial fluff", I don't know!).
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Old 06-12-2008, 05:08 PM   #22
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What a nightmare that must be for them!! I wish them the best and hope she doesn't have to work too much longer than she wants to work.
I am sure that my aunt would have preferred to stay retired (and not have to become a cleaning lady at age 65) but I think they'll be OK in the end. They have a few things going for them: they will have cheap healthcare coverage for the rest of their lives and their paid for house was completely renovated right before they pulled the plug. They also have no debt. I don't think they have problems putting food on the table at this point but clearly they have a lot less money left at the end of the month that they had anticipated. Last time I saw them they were complaining about the increases in the cost of food, gas and heating oil especially (like most people nowadays!). In addition, my aunt has always been a hardcore saver (though she has always given generous amounts of money to her kids which probably account for the fact that they don't have a million dollar stashed somewhere) so she might be prematurely freaking out about their shrinking bank account. But they probably spent a bit too much in their first years of retirement. My uncle (the spendthrift) in particular went a bit crazy and blew the budget. He bought a brand new travel trailer and a new car to boot (and forgot to ask for his wife's approval prior to the purchase... surprise!!!!!). And as I mentioned earlier they went on a lot of expensive trips during the past few years...
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Old 06-12-2008, 08:56 PM   #23
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I agree, Ron. People sometimes move during retirement but from what I have seen it is usually to a warmer climate, to be near their grandchildren, or some similar reason. I don't personally know any retirees that have sold their houses and moved to more modest accomodations as a way to raise capital and fund their retirements.

I recall reading several newspaper articles a few years ago, to the affect that boomers were not planning to downsize in retirement and were instead equipping their existing (large) houses with expensive amenities intended to make them easier to live in during later years (whether such stories were mere "editorial fluff", I don't know!).
Milton, I think your suspicion is well founded. A lot of "trends" are nothing more than PR releases that get picked up by overworked newspaper editors as if they were facts. Remember shortly after the 2001 recession, there were a bunch of stories about how traditional suits were making a come back in the workplace and that casual Fridays were going the way of the dinosaur? It didn't ring true, and it turned out to be a PR blitz by the men's suit makers.
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Old 06-13-2008, 08:55 AM   #24
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My parents downsized when they retired, but they did it because they wanted to move off of very crowded, expensive Long Island to their 5 acres of land with lake access in small town NH.

They sold their house on LI, and rented a house for a year in NH while their new house was being built. No gambling involved on the timing. They've been in that house for 14 years now...
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Old 06-13-2008, 10:00 AM   #25
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Milton, I think your suspicion is well founded. A lot of "trends" are nothing more than PR releases that get picked up by overworked newspaper editors as if they were facts.
Oh yeah. And most 'lifestyle' articles are pre-packaged nonsense, where the author comes up with the theme first and then searches around for examples to support that thesis (remember this thread: Any Anti-Downsizers Out There??).
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Old 06-13-2008, 10:03 AM   #26
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No gambling involved on the timing.
Understand. It wasen't necessary to fund their retirement, rather than to enhance their "retirement environment".

Good 4 them..

- Ron
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Old 06-13-2008, 10:11 AM   #27
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On the bright side, this should help keep Social Security a little more solvent.

I think it would be interesting to see the gap between people relying mostly on 401Ks and IRAs versus those who have a secure DB pension plan. I suspect the latter aren't as inclined to change their minds and keep working.
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