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Any Anti-Downsizers Out There?
Old 05-01-2008, 12:37 PM   #1
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Any Anti-Downsizers Out There?

Hey guys--
I am a reporter with one of the national personal finance magazines. I'm trying to find early retirees (or even non-early ones) who lived somewhere they loved, maybe in a house they loved, and didn't want to downsize in retirement. Ideally, this person might have felt pressured to downsize after seeing neighbors/friends flee for cheaper markets or smaller homes, but ultimately found a way to make it work in their current house-- maybe by taking a part-time job for a little extra cash or smartly managing their investment portfolios, for instance.
If anybody fits the bill and would let me interview them, I'd really appreciate it! I'm at amarek@hearst.com, and I can tell you a lot more about the story when you e-mail.
Thanks, and hope to hear from some of you--
All the best,
Angie
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Old 05-01-2008, 12:39 PM   #2
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So this is a case of script the story first and then find "facts" that you can make fit into it? Lovely.
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Old 05-01-2008, 12:43 PM   #3
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To be clear: This is a case of financial planners telling me this is a phenomenon they see often, but not feeling comfortable providing me with contact info for their clients. I have to find those myself!
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Old 05-01-2008, 12:49 PM   #4
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Sniff, sniff...

Watch out: don't step in it.
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Old 05-01-2008, 12:57 PM   #5
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Sniff, sniff...

Watch out: don't step in it.
At least she's not trying to sell annuities, right?
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Old 05-01-2008, 01:09 PM   #6
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At least she's not trying to sell annuities, right?
There is that.
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Old 05-01-2008, 01:45 PM   #7
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FYI.

This poster is NOT KBellNYC who reportedly also works for Smartmoney Magazine.

The Mods. on this board allow these kinds of posts as long as they don't get out of hand or start selling something.

If you wish to contact Angie do so privately at her posted email address.

Thanks
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Old 05-01-2008, 02:05 PM   #8
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They've already designed the SmartMoney cover:

You Don't Need to Downsize
to Retire Early!
We'll Show You How

That's a real magazine seller. Now, they only need one or two people to interview. Here's how it starts:
Think you need to downsize in order to retire early? Bob and Marylin Smiley of San Francisco sure did, until they realized that they could keep the house they loved, stay in their wonderful neighborhood, and still get out of the rat race.

"We felt pressured to downsize after seeing neighbors/friends flee for cheaper markets or smaller homes." says Bob, but they ultimately found a way to make it work in their current house. Marylin took a part-time job turning tricks and Bob used SmartMoney's tips to successfully manage their investment portfolios
.

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Old 05-01-2008, 02:13 PM   #9
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"We felt pressured to downsize after seeing neighbors/friends flee for cheaper markets or smaller homes." says Bob, but they ultimately found a way to make it work in their current house. Marylin took a part-time job for a little extra cash and Bob smartly managing their investment portfolios
...until Marylin lost her job and Bob's investments went into the tank. And they had to sell the house into a horrible real estate market. Next thing you know, Bob's begging his former boss for a new job when no one is hiring.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 05-01-2008, 02:19 PM   #10
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[quote=ziggy29;651503]...until Marylin lost her job [/quote]

Turning tricks? That be something to see. Is it like the old joke about the elderly couple whose social security wouldn't cover the bills anymore, so reluctantly the wife went out on the streets? After a "hard" day of work, she came back and showed her husband her earnings: $25.05. He asked, "who gave you the nickel?" She answered, "everyone."
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Old 05-01-2008, 02:40 PM   #11
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[quote=brewer12345;651507]
Quote:
Originally Posted by ziggy29 View Post
...until Marylin lost her job [/quote]

Turning tricks? That be something to see. Is it like the old joke about the elderly couple whose social security wouldn't cover the bills anymore, so reluctantly the wife went out on the streets? After a "hard" day of work, she came back and showed her husband her earnings: $25.05. He asked, "who gave you the nickel?" She answered, "everyone."
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Old 05-01-2008, 02:43 PM   #12
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[quote=brewer12345;651507]
Quote:
Originally Posted by ziggy29 View Post
...until Marylin lost her job [/quote]

Turning tricks? That be something to see. Is it like the old joke about the elderly couple whose social security wouldn't cover the bills anymore, so reluctantly the wife went out on the streets? After a "hard" day of work, she came back and showed her husband her earnings: $25.05. He asked, "who gave you the nickel?" She answered, "everyone."
Ha! But I should point out that he added "turning tricks" after I replied!
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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Old 05-01-2008, 03:22 PM   #13
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Ideally, this person might have felt pressured to downsize after seeing neighbors/friends flee for cheaper markets or smaller homes, but ultimately found a way to make it work in their current house-- maybe by taking a part-time job for a little extra cash or smartly managing their investment portfolios, for instance.
There's a pretty spectacular gotcha here for longer term homeowners trying to downsize.

In some states (California, Oregon, for example) there is a property tax cap on the taxable valuation of the home. That is, if someone bought a home 30 years ago for $30,000, their property taxes are based on a capped percentage (typically around 1%) of that valuation, not the current market value.

When the downsizer sells that $30,000 home for $250,000, they might 'downsize' to a nice little $180,000 home. Alas, their annual property tax may well jump from $300 to $1800, even as they downsize. Oh, they could probably re-invest the net gain from the move and use that to cover the taxes, but I bet a goal of that downsize was to free up cash for retirement, not the nice man at the tax office.

This provides a powerful incentive to not move. (If my home were reassessed to current market levels, 10% of my retirement income would go for property taxes. Ouch.) A lot of people in these states will retire in place.

Note that in California, if downsizing and staying within a county, and the homeowners are over 55, they might be able to keep the old property tax rate under Proposition 60 (1986). A few counties will transfer in the tax level from another county under Proposition 90. Only Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara and Ventura counties currently allow this transportation of a current property tax into their county. Those familiar with property prices in California will recognize that those counties aren't exactly big downsizer destinations.
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I didn't feel any pressure to downsize
Old 05-01-2008, 03:26 PM   #14
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I didn't feel any pressure to downsize

I did compute the costs of moving and found it horrendously expensive. Giving up my property tax basis and paying capital gains would have been on the order of $100k. While I no doubt could move to a less expensive area, it would be much less desirable to me. I chose to live where I do, planned for it, and paid off my house when I retired. Any stretching was in other areas to own it. I might even prefer to move a limited distance closer to the ocean, but those costs are extremely high so I will probably stay put for a very long time. The cost of living in different areas is not that different other than the cost of the home.
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If prices fall enough by the time I reach 55
Old 05-01-2008, 03:30 PM   #15
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If prices fall enough by the time I reach 55

I might even be able to afford to move.
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Old 05-01-2008, 04:10 PM   #16
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So this is a case of script the story first and then find "facts" that you can make fit into it? Lovely.
Surely this doesn't surprise you? That's how journalism works.
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Old 05-01-2008, 04:38 PM   #17
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The issue of downsizing is a complicated one. Retirees who plan to keep their big house in the suburbs might be interested in reading this article from The Atlantic "The Next Slum?"
The Next Slum?

A quick summary:
Rising gas/heating prices may make it so expensive to keep a suburban McMansion that owners will leave, landlords will buy and turn the homes into apartments, thereby turning suburban neighborhoods into slums. The author does give a disclaimer that suburban neighborhoods near public transportation and near city centers will likely hold their value.

Also, interestingly, the author speculates that small/medium towns may have a comeback because all the necessities of life are close at hand. It is the neighborhoods that require long commutes to jobs, services, shopping that will suffer.
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Old 05-01-2008, 05:35 PM   #18
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We are in the middle of "right sizing" . Our current home is larger than our desires to keep it heated, cooled, cleaned and maintained. Taxes are constantly going up as are the utilities. But our ultimate reason is we are sick of winter. It is snowing again today as Spring tries to break through Winter.

We have a contract to sell and a contract to purchase a new home. We close on both June 2 and move June 3 and 4. The new house is smaller and all on one level. it is a down size but we really believe it is more in-line with what we are willing to take care of and live in for the next few years.
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Old 05-01-2008, 07:11 PM   #19
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Turning tricks? That be something to see. Is it like the old joke about the elderly couple whose social security wouldn't cover the bills anymore, so reluctantly the wife went out on the streets? After a "hard" day of work, she came back and showed her husband her earnings: $25.05. He asked, "who gave you the nickel?" She answered, "everyone."
Congrats to Trombone Al for sending it in this direction, but I laughed my ass off at Brewer's joke (still laughing)...
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Old 05-01-2008, 08:08 PM   #20
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In retirement, I can choose where I live instead of being bound to a location by my job. I have selected a small midwestern town with a lower cost of living.

The home I purchase for retirement will therefore cost less than my present home. However, the square footage is likely to be greater than that of my present home.

I guess this is downsizing to a larger home?

I know what you mean about living in a house you love. I really do love my home. Katrina changed my plans.
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