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04-29-2019, 12:27 PM
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#21
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,200
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Quote:
Originally Posted by W2R
Another factor is that what I thought I would want out of life during retirement, and what I actually wanted once I was retired, were different. Before retirement we were absolutely sure that we wanted to move to Springfield. After retirement we changed our minds and decided to stay here.
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Probably worthy of another thread, I suspect we've all experienced this to some degree.
Life is what happens to you while you’re busy making other plans. - attributed to several people
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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04-29-2019, 12:29 PM
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#22
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gone traveling
Join Date: Dec 2018
Posts: 1,196
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" when you had much money and lost it, it's much worse than having any money at all" - quote from the Charlie Sheen and Michael Douglas movie Wall Street. Not saying that losing money is in the cards in this matter but I'd be downsizing and enjoying life that way. I would not consider carrying a mortgage in retirement.
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04-29-2019, 05:10 PM
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#23
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Recycles dryer sheets
Join Date: Nov 2014
Location: Beautiful UP
Posts: 243
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Quote:
Originally Posted by RunningBum
"losing some sleep" is not the same as "sleepless nights".
"to handle it" is not the same as "no worries".
It's best not to overstate a poster's situation.
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Yep--did overstate the sleep part.
The other part, I don't know. In my mind, "handling it" as the OP mentioned implies in my mind that it will be bit of a struggle.
It just seemed that if 6-12 months of extra work is all that is needed, the sum must not be huge-- 50K or less, Admittedly don't know the income etc.
Since wife still works, they could take if from retirement and greatly increase wifes 401k assuming its available to replenish. Might take longer due to limits.
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04-29-2019, 05:17 PM
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#24
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Thinks s/he gets paid by the post
Join Date: Dec 2017
Posts: 2,533
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What are your priorities? If you were to buy the house and pay cash, or just raise your annual expenditures to cover the new annual budget, what does Firecalc say? After the purchase, would you still have adequate cash flow to cover your remaining expenses and desires? Some folks would rather buy a better house than travel, and others vice versa.
My plan it to sell our inexpensive (for HNL) condo, rent while we travel, then come back and quite possibly buy a house that costs twice what our condo will sell for, paying cash. Then, our retirement nest egg will be quite a bit smaller, and we'll have to drop our travel budget by $20K. I've let my wife know that we can't do both (maintain a 60% travel budget AND buy an expensive house).
This decision as to whether one wants a mortgage in retirement is personal, but I would never want a mortgage in retirement. Have you calculated the difference between paying cash and lowering your annual budget vs. including the mortgage?
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Balance in everything.
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04-29-2019, 05:21 PM
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#25
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Full time employment: Posting here.
Join Date: Sep 2017
Posts: 816
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Well, it is $45K above our target max so, into the uneasy territory.
I'll run numbers and see what comes out. Just got home from work.
If I work another year, focused on saving, I could make most of that up.
__________________
“Earth is the insane asylum of the universe.”
― Albert Einstein
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04-29-2019, 05:44 PM
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#26
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Moderator Emeritus
Join Date: Aug 2007
Location: Northern Illinois
Posts: 16,543
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I'm running into a similar problem. We're selling a condo and a house and buying a new house. I'd like to buy a house equal to the combined proceeds from the sale of the house and condo. But if we go berserk, we could buy a new house that will cost $200k more than the combined proceeds.
I'd say run the numbers and see what you can cut to get to where you need to be. Can you start taking SS to put toward the house?
And it may make sense to take out a mortgage rather than taking $ from an IRA that could push you into a higher tax bracket.
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04-29-2019, 05:53 PM
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#27
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,226
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We just recently bought a 2,866 sq ft house for 4 people. However we paid cash and plan to stay in it for 20+ years. We love the house.
Go for it if the retirement calculators spit out the high success rates. Life is short.
__________________
TGIM
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04-29-2019, 06:02 PM
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#28
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Thinks s/he gets paid by the post
Join Date: Apr 2007
Location: west bloomfield MI
Posts: 2,223
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Quote:
Originally Posted by albireo13
I will be running Firecalc, etc over the next 2 days, at night. Working full time so no time to run numbers during the day.
We are selling now, before retirement because we would like to have that big move behind us before we enter full retirement. I plan to retire next year but, my wife plans to work another 3 yrs beyond me. We have the option of just renting for awhile and take our time for a house.
Why sell now?? We had some impending expenses that we can avoid (replacing front and back decks). Also, we will be in a strong position to buy. We will not have contingencies on selling a house to get in the way of a P&S.
BTW ... berm was a typo .. should be bdrm.
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All good info
I would want to know the following
1) what % of networth will be tied into house equity
2) how long will you stay in new house?
2a) over under is usually 7 years- if less than 7, buying will likely lose money.
3) is there a prospect of house being paid off, or will mortgage be carried for 7-15 years before another move?
4) what is asset allocation before buying? Would the purchase change the asset allocation?
__________________
Light travels faster than sound. That is why some people appear bright until you hear them speak. One person's stupidity is another person's job security.
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04-29-2019, 07:36 PM
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#29
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Recycles dryer sheets
Join Date: Nov 2014
Location: Beautiful UP
Posts: 243
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wouldn't you rather be kayaking--than working another year?
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04-29-2019, 07:55 PM
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#30
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2014
Posts: 7,001
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I really don’t understand buying big houses when older. Who wants to do all that work. Some friends of ours are still working at 73 because they bought a 3k sq ft house 6 years ago.
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04-29-2019, 08:58 PM
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#31
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Recycles dryer sheets
Join Date: Nov 2014
Location: Beautiful UP
Posts: 243
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Quote:
Originally Posted by Teacher Terry
I really don’t understand buying big houses when older. Who wants to do all that work. Some friends of ours are still working at 73 because they bought a 3k sq ft house 6 years ago.
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Our new-old house when we retired and moved to the land of the Anishinaabe is larger than we need at about 2500sq ft.
It was also only 100K and allows us to walk to bars, eats, grocery, post office, parks, hardware, hospital, university, river front and listen to the soundings of lake freighters as they make their way. The lifestyle aspect of the location is far more important than all those custom built things that are so highly regarded on the HGTV porn shows.
The only needs and wants we have is to have as much time together as possible. Everything over and above that is fluff and fleeting.
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04-29-2019, 09:29 PM
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#32
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2014
Posts: 7,001
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That sounds nice but I would probably close off half the house and never clean it )
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04-30-2019, 04:59 AM
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#33
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Full time employment: Posting here.
Join Date: Sep 2017
Posts: 816
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Quote:
Originally Posted by jimandthom
wouldn't you rather be kayaking--than working another year?
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That's for sure.
Actually looking to downsize, not larger house. The location is great though. Close to downtown in a great town. 15 minutes to the ocean. Lots of biking, kayaking, etc.
__________________
“Earth is the insane asylum of the universe.”
― Albert Einstein
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04-30-2019, 07:48 AM
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#34
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2014
Location: Huntsville, AL/Helen, GA
Posts: 6,002
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And to think my wife had the nerve to complain about spending yesterday cleaning two bathrooms.
I asked her when she was going to get around to cleaning the other three bathrooms.
(I had spent the day cleaning beds and re-mulching landscaping in the hot sun.)
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04-30-2019, 05:47 PM
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#35
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Full time employment: Posting here.
Join Date: Sep 2017
Posts: 816
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Well, ran some numbers ..
Firecalc gives my 95.6% success rate and FRP gives me 100% success rate.
This seems optimistic ... not sure I trust it all.
Currently, house equity is < 5% of net worth.
This assumes I retire next year, and wife in 2023.
We both pull SS at our FRA.
we yank out $150K (pre-tax) from 401K this year to put towards house.
35yr simulation run
The goal in the new construction is not to upgrade or get bigger but, to get into a house that will be low maintenance and easy to age in as we get older. I consider it an investment for the future. We plan to be here for the next 20yrs, the last stop before a CCRC.
__________________
“Earth is the insane asylum of the universe.”
― Albert Einstein
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04-30-2019, 06:46 PM
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#36
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2009
Posts: 5,307
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Quote:
Originally Posted by albireo13
We both pull SS at our FRA.
we yank out $150K (pre-tax) from 401K this year to put towards house.
35yr simulation run
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To avoid taxes you may want to do a more minimal down payment and draw out the down payment money over a few years (if you decide to do it) and then possibly recast the loan.
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04-30-2019, 07:38 PM
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#37
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Full time employment: Posting here.
Join Date: Sep 2017
Posts: 816
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Yes, the challenge isn't so much the amount but, how to negotiate the tax hit.
Taking out a lump sum now, right before retirement, is a big tax mushroom cloud. A disbursement at our max income level!
Need to do more research. Maybe a 401K loan?
__________________
“Earth is the insane asylum of the universe.”
― Albert Einstein
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05-01-2019, 05:14 AM
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#38
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Full time employment: Posting here.
Join Date: Sep 2017
Posts: 816
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Thinking now of renting while we look. Renting for a year and waiting until I retire before buying. That way our income will be much lower and the tax hit on a 401K withdrawal will be less.
__________________
“Earth is the insane asylum of the universe.”
― Albert Einstein
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05-01-2019, 05:30 AM
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#39
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,202
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As someone said earlier, your needs and wants may change once you retire. You may not even want to stay in the area. I'd probably hold off unless you are certain this is where you want to be.
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05-01-2019, 06:06 AM
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#40
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Full time employment: Posting here.
Join Date: Sep 2017
Posts: 816
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Well, all family are in the area, we enjoy the area, and my wife will still be working for the next 4 years. We already committed on the sale of our house.
Perhaps we should have waited until I retired to sell but, it's all ok.
__________________
“Earth is the insane asylum of the universe.”
― Albert Einstein
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