A tale of two retirements

[Looking4Ward]

I wish I only had to pay $1200 a year in property taxes, but unfortunately around here with a tax rate of 3% of appraised value that would require a $40,000 home - something I don't believe I'm going to find unless it's an older single wide on a small country lot.

 

[rayinpenn]

No bias or bashing at all (at least none that I am aware of.). they can spend their money as they please. They are not rich.
My experience visiting both was more about an observation: 1) you don't need a $500k house to be happy.
As to whether they can afford the house. Jane said to Me "I need to stop spending" new car and lots of new stuff for that beautiful house. They always spent liberally which occasionally created stress. I worry they over did it.

My post was also about
2) simplicity.
I don't want or need a lot of stuff. I've come to hate clutter. A cup of coffee in the morning, some blueberry whole wheat pancakes, the NY times, a place to use a fishing rod, a lawn chair and I'm in heaven.

They have found their own piece of heaven in their own ways - I was struck by the similarities and the diversity. I am struggling with - what does my piece of heaven look like? I think I'd liked hearing what many had to say about their preferences.

I don't think I want a cookie cutter home that looks like every other home in the neighborhood - how is that me? Retirement to me should not just be living in another suburb albeit in a warmer climate. A solar cabin in the cooler hills of NC or colorado? The options are endless. It isn't about money it is about some upcoming very difficult choices.


Sent from my iPad using Tapatalk

 

[Live And Learn]

I'm with those who say "to each his own" as long as they are both living within their means. House #1 would be very nice, and I could easily have it, but it would have meant retiring later. Instead I wanted to retire early and downsized and now live in House #2. I love my simple home, but I'm really easy to please.

 

[Hermit]

...
I don't think I want a cookie cutter home that looks like every other home in the neighborhood - how is that me? Retirement to me should not just be living in another suburb albeit in a warmer climate. A solar cabin in the cooler hills of NC or colorado? The options are endless. It isn't about money it is about some upcoming very difficult choices.

You can certainly decide the type of life you want to live. There is another guy that has moved up here to the Ranch where I live that is doing it on about $12,000 per year. He is in his 40s, medically retired on SS, and has Medicare. He has a trailer and a dream of building a small cabin. I think he will get it done. I have the same basic annual fees as he, am in the process of building my cabin and I should be comfortable on between $40 & $50 K per year once the cabin is completed and my son is finished with college. Here are two very widely different amounts for the same area and life style either of which some folks might say is living a miserly life. In my case I am living the life I want to live.

Good luck on figuring it out for you.

 

[daylatedollarshort]

Location, location location. Which house will be the better investment ten years from now? I don't know. Just asking. The $500K house could be overpriced or maybe a steal for the neighborhood. Initial cost and expenses aren't the total picture. The $500K house may be in a great school district, have better appreciation potential and may be a better investment long term.

 

[rayinpenn]

At this point the home isn't an investment...its a place to live out your days

 

[Dash man]

At this point the home isn't an investment...its a place to live out your days

+1
I've always believed the home you occupy is an expense, not an investment. That way of thinking helped me save more and grow real investments.

 

[RunningBum]

At this point the home isn't an investment...its a place to live out your days

Maybe so, but if things go bad, one certainly can sell the home and buy or rent a less expensive place. Not an ideal strategy, but it is a way to live in the house you want but still have an emergency fund. You can argue that it's not a very liquid asset, but I won't wait until I need the money in a hurry. If I see my nestegg is shrinking and won't last, I'll put the house on the market well before I run out.

 

[imoldernu]

We all have different wants and needs...
We're now very comfortable in 1600sf... in IL, but came very close to buying the OP's choice in FL... sounds very nice. Too many different considerations to detail as to the "final" choice.

Having said that., our first "post retirement" home in 1990... 900sf and $50K including our owned land in Woodhaven Lakes. First 15 years of retirement split betweeen here and FL. Still own and use this as a retreat.

Best wishes raymondmillsjr

 

[daylatedollarshort]

At this point the home isn't an investment...its a place to live out your days

Would you rather live out your days in a house losing value or tripling in value? The triple in value house can be left to kids, charity or used to pay for a nice nursing home. If the $500K house triples in value and the retirees get to live in a nicer house in retirement than house #2, that might actually be the more economical choice over the long term. If couple #1 can easily afford the $500K house, why should they live in a lower socio-economic neighborhood where they might not fit in? The best choice for them depends on many more factors than house price alone. As others have posted, both couples might be living well below their means. We have friends that moved to a much lower COL area in retirement than they lived in before and now realize they have nothing in common with their neighbors.

 

[Bestwifeever]

As long as the homeowners are happy with the choices, good for them. Homeowner no. 1 is likely protesting too much about "I need to stop spending."

 

[Hermit]

Would you rather live out your days in a house losing value or tripling in value? The triple in value house can be left to kids, charity or used to pay for a nice nursing home. If the $500K house triples in value and the retirees get to live in a nicer house in retirement than house #2, that might actually be the more economical choice over the long term. If couple #1 can easily afford the $500K house, why should they live in a lower socio-economic neighborhood where they might not fit in? The best choice for them depends on many more factors than house price alone. As others have posted, both couples might be living well below their means. We have friends that moved to a much lower COL area in retirement than they lived in before and now realize they have nothing in common with their neighbors.

I am quite sure the house I am building will only be worth what I paid for it to the county assessors. It will not fetch anywhere near their assessed value. The commute up here is too difficult and long for working people. I will leave the place to my DD as a weekend place or retirement place of her own. Future value is not a consideration. What is important is that it is next to the kid's camp I intend to help and support for the rest of my life. It also has a magnificent view in a very peaceful high mountain valley.

 

[bclover]

At this point the home isn't an investment...its a place to live out your days

+1

 

[Texas Proud]

Maybe so, but if things go bad, one certainly can sell the home and buy or rent a less expensive place. Not an ideal strategy, but it is a way to live in the house you want but still have an emergency fund. You can argue that it's not a very liquid asset, but I won't wait until I need the money in a hurry. If I see my nestegg is shrinking and won't last, I'll put the house on the market well before I run out.

I agree with your argument.... just going to throw out a couple of thoughts...

But, has anybody put a pencil to this to calculate if it really makes a difference... IOW, using the $500K and $200K examples... assuming no mortgage, the $200K person has $300K more invested somewhere else... the return on that money probably will be more than on the house....

A second thought.... the $500K house cost more each year in taxes, insurance, maintenance etc. etc.... so it would have to go up a higher % to overcome that negative cash flow while you lived in the house... it might not be able to do that....

 

[bclover]

Would you rather live out your days in a house losing value or tripling in value? The triple in value house can be left to kids, charity or used to pay for a nice nursing home. If the $500K house triples in value and the retirees get to live in a nicer house in retirement than house #2, that might actually be the more economical choice over the long term. If couple #1 can easily afford the $500K house, why should they live in a lower socio-economic neighborhood where they might not fit in? The best choice for them depends on many more factors than house price alone. As others have posted, both couples might be living well below their means. We have friends that moved to a much lower COL area in retirement than they lived in before and now realize they have nothing in common with their neighbors.

Actually I try not to buy a house on the premise of what will happen when I'm dead. just me. my house is for living NOW.

let's see my kids
went to college no loans
attending law school, tuition fully paid for.
If I kicked the bucket today they'd get a pocketful of cash.

So nope, not really worried if my house is increasing in value. I'm not selling unless an asteroid hits and when I'm dead, well any problems my kids encounter I can call it payback for all the nights they made me lose sleep from worrying where they were at because they were 4 hours late and "forgot" to text.

 

[daylatedollarshort]

To each his own. We try not to make house decisions based on general maxims and instead run detailed spreadsheets on all the angles we can think of including where would we be happiest, appreciation, price per square foot, walkability, access to public transportation, crime rates, affordability to us, property taxes, school rankings, prices trending upward or downward, did prices hold during the last downturn, etc. Initial price is one of many factors we consider.

We will probably move to a lower maintenance townhouse or condo in a retirement community when we are older so what our house will likely be worth in 10 or 20 years is important to us.

 

[rayinpenn]

1) Kids. Will have no college loans
2) will be well dressed for their first job
3) will be well traveled and have seen other parts of the world
4) will inherit a respectable amount and hopefully they will be old enough to realize - the money just isn't that important.

I do not care about the home appreciating; I care about enjoying life with the Mrs. Time and health are the precious commodities not MONEY! That's why people retire early hmmmm?

I consider my job with the kids done. (Mind you I always help if I can)