Hi...I'm new...thoughts on downsizing to make retirement possible

[LBSuarez]

Hi...why I'm so nervous about posting for the first time, I don't know...maybe it's because I usually read this late at night when my mind is not as sharp?
Anyway, my husband and I are considering retiring early in the next few months. He's had a tough time with downsizing, and then finding work because of a non-compete clause he signed with a job after being downsized. After 30 years of loving my Real Estate Profession, I am just beginning to resent the crazy hours, and time it takes out of my life. It is partially my fault though. I allow this, but don't know any other way of giving my clients the best service. Unless I have someone cover for me 100% and I go far,far away with no phone or computer, it is always with me.
I am 56, my husband 55. I'm not really asking if we have enough money, as I've figured it out backwards and forwards, and we'll probably be fine IF we sell our present home and move to an area where housing and the cost of living is less, meanwhile investing the equity not spent on the next house.
I'd love to hear from someone who has done this, and if it worked well for them. I am ready for something different and more adventure in my life. If we stay where we are living now, I doubt I could ever stop working, as I have many referrals after all of these years, and I don't think that I would be able to turn down the business.
I'm thinking that I want to perhaps reinvent myself somewhere else? Don't get me wrong...I don't dislike who I am...just would like to experience other sides of myself that are yet undiscovered!
Our kids are mostly on their own...we are helping our daughter a little while she's in graduate school, but have less than two years of that left.
Has anyone out there done something like this and then decided after a bit of a break and adventure they were bored and wanted/needed to work again? I realize that may be a possibility for us...Thanks so much for reading all of this...I'll try to make my next post shorter!

 

[bssc]

Welcome to the boards

If you look around the Life After FIRE section, you will find some discussions about people who have downsized. Or they might step up and let you know.

 

[LBSuarez]

Thank you. I will check on that!

 

[chinaco]

Welcome to the board.

I am intending to down-size the house. Not so much because of financial burden, but because DW and I want less to keep up with... We have more house than we need. We think it will simplify our life and better fit our new ER lifestyle (more travel).

My basic advice on ER is to do a financial plan to understand your financial needs and resources to meet those needs. I personally have a conservative outlook which shades my decisions.

As far as "what am I going to do with myself", we are planning for that also. We intend to stay in the same location, but do more extended travel. Plus DW and I both have hobbies. At this point, we are not intending to work part-time since we do not believe we will need the extra money. The "need of extra money" to supplement income would be the primary motivator for working part-time. I do not think I will be bored and need a job to occupy my time.

 

[frayne]

I downsized at 52 years old, about two years prior to retiring, went from a 3300 SF house to a 1700 SF condo. Was a very liberating experience and facilitated my ER plans. My only regret is that I didn't do it five years sooner. I have since moved 500 miles from where I lived in order to be closer to my son, daughter in law and grandchildren, my wife and I have no regrets whatsoever. Good luck.

 

[dumpster56]

Went from a 250K mortgage to a 40K mortgage. Taxes from 8K to 3 K by moving from NJ to NC last year. The new jersey rat race is not good for the health. Took a part time job work 2 four hour days a week, with pension and the extra its Easy! Oh there is plenty to do, kayak, sit at the pool drink nice beverages on the hot days sitting by the pool, head for a bookstore, trader joes make good food, paint write my book. Enjoy, life is a game that I want to enjoy.

 

[TexasGal]

LBSuarez,

Sounds like you have reached the place in your life where you just can't stand the thought of continuing on your present path and REALLY need a change. We all get there one way or another. You have come to the right right place so welcome to the forum. I have not downsized a home, but I have cut way back on expenses which was necessary in order to retire. Knowing where every penny of your money is spent is critical to creating a financial plan as chinaco suggested.

Many here will respond about their downsizing experiences and there is a wealth of information as well as great diversity in lifestyles.

Enjoy browsing and posting,
Tex

 

[militaryman]

Upsized house -- Downsized Mortgage

We moved from DC to Oklahoma about a year ago. We had a 2000sq foot vinyl sided house (13yearsold) with no garage and sold it for 380k (225k equity) and bought a 3000sq ft 3 car garage (brand new) all brick house in Oklahoma city for the cash equity from the DC sale.

I did however take a $20k/yr paycut to do this but the object was to escape the rat race of DC to a simpler way of life. Now I am 12 min from work instead of 70+ and I am home at 2:45 from work each day.

Changing locations during retirement seems to be a great idea as your income will be the same in either place, whereas I took a salary cut (no regrets) in retirement you would not so it would be all upside ---

Consider renting in the area you are thinking of moving to for a couple months to ensure that you buy your retirement home in the perfect neighborhood.

 

[kcowan]

Downsized from a 5000sqft house to a 2000sqft rental penthouse apartment 5 years before RE. Did not relocate. The house equity invested in the stock market enabled us to RE. The rental is such a deal that there is no need to move because we already freed up 100% of our home equity.

We may relocate to Mexico in the future (after MIL passes on, she is 91) but will probably keep our presence here for the summers. The relocation would be for the weather but would bring a lifestyle bonus too (servants).

 

[jnojr]

Anyway, my husband and I are considering retiring early in the next few months. He's had a tough time with downsizing, and then finding work because of a non-compete clause he signed with a job after being downsized.

Eh His employer "downsizes" him, and then he signs a noncompete? Why I'd have told them to go pound sand in a huge way. "If you want me to not work in the field I know for the next X years, then you're going to need to write me a check for all of the salary, bonuses, and raises I'd make in that period of time. That's the only way I'm not going to be 'competing' with you".

That noncompete is likely unenforceable. Talk to a lawyer, but I'm 95%+ certain he can just ignore it and get back to earning a living.

 

[LBSuarez]

Thanks all of you for making me feel so welcome. We did consult attorneys concerning the Non-compete clause (not with the downsizing employer, but with the next job with a horrid boss my husband took because we had two kids in private college at the time)..we know that the clause is not enforceable, BUT no employer wants/wanted to take a chance of having a new employee involved in a lawsuit...everyone knows what kind of person his old boss is, so they knew there would be a lawsuit...win or lose, it could have been a mess.
We are fortunate to have no mortgage on our present home, and no other debt. If all goes well with investments, we'd be able to travel, and only work if we felt like it...if our investments are down, then we may have to curtail our travel a bit, or find a way to earn some money.
Just realized this is supposed to be a quick reply! Sorry! Thanks again everyone!

 

[chinaco]

Thanks all of you for making me feel so welcome. We did consult attorneys concerning the Non-compete clause (not with the downsizing employer, but with the next job with a horrid boss my husband took because we had two kids in private college at the time)..we know that the clause is not enforceable, BUT no employer wants/wanted to take a chance of having a new employee involved in a lawsuit...

I am not an attorney, but the non-competes I signed in the past were fairly narrow focused if at all. It is my understanding that they are not legal in some states for employees. It would seem to me unless your DH was a "Key Employee" or a Business Owner that sold his share of the business, the non-compete is a paper tiger.

Also, (not sure what your husband does), but I have never had a prospective employer ask me if I had signed a non-compete clause. As long as your DH does not share secret patent or copyright info, he should be fine.

But, you are doing the right thing talking with an attorney.

 

[Life_is_Good]

Downsizing works

Sounds similar to my situation. I sold an expensive SF house and bought a far less expensive (and smaller house) in Oregon. No more mortgage payment, less property taxes, and much cheaper cost of living. Wife and I did this 2 years ago... investing the proceeds into several Vanguard mutual funds.

We've been able to cover all our bills and STILL come out way ahead on investments.

I would have had another 12 years of mortgage payments left on the SF house if we stayed. The question I had to answer.... did I want to keep working to pay the mortgatge or did I want to begin to enjoy my life with far less stress. Opting for the latter certainly is working out well for wife and me.

Good luck with your decision!

 

[LBSuarez]

Thanks for your input Life Is Good! We might be able to live very frugally in our present home on ER, but then what is the point. There would be no money for FUN. But if we move to a an area with less expensive housing, put the rest of the money to work for us, the chances are very good that we will be able to live a nice life, and have enough to travel. Our present home is almost 20 years old, and with the current Real Estate market, I don't see any significant increases in value any time soon. Why not take the equity out and put it into Vanguard Funds as you mentioned?
As exciting, and sometimes frightening as it seems...I think it's time.
A question for others. Did your dissatisfaction with your life as it was come on rather suddenly? Honestly, I was doing OK until about 6 weeks ago...maybe it's because I have done the math and know we can do this?
I am not a rash person by any means, so I am a bit surprised by my strong feelings that it is time to move on!

 

[ajs56]

As exciting, and sometimes frightening as it seems...I think it's time.
A question for others. Did your dissatisfaction with your life as it was come on rather suddenly? Honestly, I was doing OK until about 6 weeks ago...maybe it's because I have done the math and know we can do this?
I am not a rash person by any means, so I am a bit surprised by my strong feelings that it is time to move on!

I have not FIRE'd yet, but am close. (Numbers are there, just need to arrange a graceful exit from a good long time employer. But YES, my feeling has come on very strong over the past 6 months, after my numbers began to consistently say "it's gonna be ok". Now I think a lot about what I want to do instead of working. I am also not a rash person, and inertia plays a big role in my life, but everyone tells me I'll know when the time is right. I'm feeloing more excited and less doubtful about it, so I think it's getting close...

Best luck to you... it sounds like you've thought it through and are on the verge of something really exciting.

 

[meridiver]

A question for others. Did your dissatisfaction with your life as it was come on rather suddenly? Honestly, I was doing OK until about 6 weeks ago...maybe it's because I have done the math and know we can do this?
I am not a rash person by any means, so I am a bit surprised by my strong feelings that it is time to move on!

Up until two years ago it just had never really occurred to me to stop working (at least not until I was 60 or so). Then, friends of ours who are in a very similar financial situation to us (FI), quit their jobs, and went off to pursue their dreams. That's when I started to realize that maybe I too could stop working.

As soon as I started thinking about it and realized we could probably do it, my dissatisfaction with my current life started. I'm an extremely cautious person, so it has still taken me two more years to get to the point where I'm finally ready to walk away from it. But yes, those feelings often can and do come on quite suddenly. Once you run the numbers, and realize you'll most likely be okay if you retire, it is hard to get it out of your mind.

 

[playaman]

meridiver is so right: "Once you run the numbers and realize you'll most likely be okay if you retire, it is hard to get it out of your mind."

Rather than retire at 59 as I planned, I agreed to a (genuinely interesting) academic assignment for two years. One year has passed and all I think about is getting to July 1, 2008, so I can really FIRE -- even though I am enjoying my academic assignment.

Once "that decision" has been made, it's hard to concentrate on much else.

 

[LBSuarez]

Thanks for your support playaman,meridiver, and ajs56. It's good to know that my feelings are normal. At present, I fail to see what we will gain by working another few years. You said it so well that it's hard to concentrate on much else, once you realize that it is possible to stop working. I'm not even certain that I won't want to work again, but I relish the idea of having the time to try new things, travel, and maybe reinvent myself. Now I think that I need to have my husband join this site and be as encouraged to move forward as I am.

 

[sweetana3]

It helps immensely, if you are analytical, to have the numbers down in black and white. We have what we call a life book that we update each year. In it we have our projections of retirement income, savings, status of wills and other instruments, insurance information, etc. We have our projections from the 1980s thru about 2015 and our actual returns. We have a basic income statement for each year and an analysis of our budget.

We know for a fact that baring any catastrophe we can easily live on just our pensions and probably just husbands. But without this knowledge, I would be the pessimistic and super careful one and not retire until 60 something.

Why dont you both sit down and do a kind of life book. Where do you stand right now with all the assets, debts, pension estimates, SS estimates, insurance papers, health insurance information,etc. Check out your total financial health and then start making some plans both near and far term.

It could either make you feel more secure in your decision to retire or point out the deficiencies and allow for you to plan and plug them first.

Right now hubby is waiting for me to retire or a severance package whichever is first and I go in a little over one year because I need to wait for my federal health insurance to be vested.

 

[ajs56]

Why dont you both sit down and do a kind of life book. Where do you stand right now with all the assets, debts, pension estimates, SS estimates, insurance papers, health insurance information,etc. Check out your total financial health and then start making some plans both near and far term.

It could either make you feel more secure in your decision to retire or point out the deficiencies and allow for you to plan and plug them first.

We have done all those things and are comfortable with our financial picture. We discuss both the financial and non-financial aspects of FIRE on a regular basis, and are both excited about the possibilities. One thing we are preparing to do is update our trust as the kids are of age and on their own now. Other than that, we have no financial issues regarding FIRE. It's simply a matter of when it feels like time.

 

[maxer]

A question for others.

A question for others. Did your dissatisfaction with your life as it was come on rather suddenly? Honestly, I was doing OK until about 6 weeks ago...maybe it's because I have done the math and know we can do this?
I am not a rash person by any means, so I am a bit surprised by my strong feelings that it is time to move on!

I'm no expert but speaking to an extent from personal experience and observations, there comes a time in a persons "career", "profession" or "job" when money or that "sale" as a sense of accomplishment doesn't quite cut it. It is an indication of a combination of factors coming together - age, boredom, impatience, burnout and feeling of lack of excitement - it is here that you have reached a point where you feel you have become about the best that you can be at what you do. There is no more mystery, excitement of the chase or the curiosity - it has all become somewhat predictable, mechanical and uninteresting.

Asking the question "does it have to be this way?" prompts people to look for that alternate. Realizing that the alternate has a risk, prompts one to look for some sense of security and for the seniors or ER's, financial security is probably the first step. Once one realizes that the financial security has been reasonably taken care of, it lifts a huge burden. It reinforces the conscious thought about alternates and takes up a lot more of ones thinking time which is just as well - thats self examination.

You are now admitting to yourself - Yes, I may be ready to retire!

 

[sweetana3]

I think the word "retire" has as much emotion behind it as "I do". We all have a picture in our heads of those we know or knew who were retired and carry that emotional picture with us.

My parents and inlaws are pretty happy and busy in retirement. I have very specific plans on volunteer training and volunteer work to keep me happy and busy. Cant wait for the very first opportunity to say "good bye" to those stuck at work.

 

[LBSuarez]

Interesting thought

I think the word "retire" has as much emotion behind it as "I do". We all have a picture in our heads of those we know or knew who were retired and carry that emotional picture with us.

This is a very interesting perspective that I hadn't thought about before. No doubt there's lots of emotion along with the uncertainty of "can I?" and "should I?".

I don't think that I'm actually picturing anyone but myself, but me sort of reinvented, not sure how, but different? More relaxed, and time for fun and the time and energy to try new things. I think that there is a different me yet to come out, but too many responsibilities and pressures have kept "me" from emerging...maybe I'll be disappointed, and be no different than I've been for many years, but I sure would like to try! It's not that I don't like who I am, just interested to find another side that might be waiting to come out I guess. I think that habits are too ingrained where we live now, and doubt that a real change would happen without changing locations. We have no relatives in this area, and the chance is less than 1% our children would ever return to live here.
My husband seems to be more afraid of a major change than I am, and I'm the more reserved and careful one of the two of us about most things. Anyone have encouraging thoughts that I could share with him about downsizing and moving to a new and less expensive area? I honestly think I'd be perfectly happy in a house half the size that we have, and a third the value! Will I be sad to leave it? Yes, but also excited!
Thanks everyone. Sorry I think I got off track here, didn't I?

 

[ajs56]

I think that there is a different me yet to come out, but too many responsibilities and pressures have kept "me" from emerging...maybe I'll be disappointed, and be no different than I've been for many years, but I sure would like to try! It's not that I don't like who I am, just interested to find another side that might be waiting to come out I guess.

Sweetana,

I think this is Very true for me as well. Sometimes we lose sight of the forest for the trees, and get into a certain mode of thinking or rut, even if it is a good or pleasant rut. The responsibilities of earning a living, raising a family, etc., require a substantial time and energy committment, leaving little time/energy for "dreaming" or thinking outside the box. Once family/financial responsibilities are lessened, I think it takes some effort to re-kindle the "what are the possibilities" type of thinking I had a lot more of when I was young. But they're there, and I plan to fan the embers and see what happens.

As I've been saying to my DW in our FIRE discussions, "I don't know exactly what I'll do next, but I have this feeling that it will be better than anything so far."

Well, here's to looking forward, onward and upward!

 

[LBSuarez]

I love it here...very reassuring

AJS56...that was actually me talking, not Sweetana...I'm so new to this that I probably incorrectly captured a quote or something. I can't tell you how reassuring that it is to read that your thoughts are similar to mine in this process that has sort of caught me by surprize! Thank you.
I am still learning about how this whole site works, so fumbling around not sure how to take full advantage of it, but really enjoy it so far.
One more question before I leave on vacation early tomorrow morning...What are the dryer sheets all about? It makes me laugh, but I figure there's some meaning to it that escapes me...either that or it is totally random!
Thanks everyone...I'll be back in a few weeks...LBSuarez