Your Home

[imoldernu]

Your Residence

Is there any one part of the retirement spectrum that is more individually different than the personal residence?
Not only where and how we live, but how it fits in to our life and our plans for the future. Not a quiz or a poll, but just some observations that seem to point to the residence as playing a big part in our lives. Some thoughts on this in no particular order::
Residence = House, Condo, Apartment, RV, Rental, Commune, YMCA... whatever.

Does it figure into your finances as an investment, to be sold in the future to finance part of your retirement, or do you consider it apart from your "wealth" and just not part of your expenses (ie amortization)?

Rent? Live in one place? Multiple homes? Snowbirding?
Carry a low percentage mortgage and invest rather than own outright?

Do you upgrade? For yourself, or to enhance sale price?
A heritage type home... that is a center for family activities, to be passed on to children? A homestead?

Have an emotional attachment? Children, or long time ownership.
Live there for love of outdoors, scenery, environment, growing things?

Climate?

An efficient, simple base for living while still w*rking or while traveling?

Based in a locale accessible to family?

Staying in present location to await rise in prices, or being underwater.

The house and grounds as a hobby... upgrading, decorating, planting etc.

A place to live until dying?

Social life, friends, entertaining.

The neighborhood- access to shopping, culture, education, physical outlets... golf, hiking, exercise, sailing, libraries etc.

Sized for efficiency- upkeep, cleaning, senior designed facilities: bathroom, ease of access, safety features etc.

Is your residence a major, or minor part of your retiremnt plans. Will you, would you move, and to where? Would/will you buy "larger" or "smaller" than your current abode?

Have you planned your future to include your residence, or is this in a state of flux?

Is "where" you will live important, or are you content to let nature take its' course?

Do you have other plans, for other reasons... that you'd care to share?

 

[LitGal]

Our "Cabin in the Woods"

During our years in Northern CA, DH and I dreamed of moving someday to the mountains, so we could own a cabin in the woods. However, the demands of life in the Bay Area (see my other posts) led us to seek a lateral transfer in his co., looking for a region where our son could grow up with more space to play outside (and where I might have fewer gang members in my classes).

We were fortunate to move into this colonial, next to a 400-acre city forest, when we made the move to OH. Our son was only in second grade at the time. So he was able to grow up playing in tree houses, running the trails out back, walking and riding his bike to school in a very safe neighborhood. We bought this house for less than the sales price of the CA house, so I was able to take some years off work. (A good thing, because of my husband's declining health and our son's emerging brain disorder.)

We've now been here almost 17 years. DH and I have often marvelled that the "cabin dream" came true in our 40's. However, the "writing on our wall" became clear when he needed to take disability retirement and I decided to ER to be with him.

He does not qualify for long-term care ins. and never will. However, there is a highly regarded/rated CCRC here in town where we applied last fall as "Pre-residents." (It has some of the strongest financial backing in the industry; we read the articles on how to check out the viability of these places.) This is a good deal for retirees with our future needs. My husband will need assisted living (probably within 5 years). If we applied now and both pass the financial and medical evaluations, we would be guaranteed acceptance into the facility for lifetime care, as long as we move in by age 75, no matter what our health condition at that time. (He is currently 63; I'm 59, healthy.) Of course, we have to pay all the fees along the way. (It looks like the math will work for us.)

We were accepted, because he is only on oxygen at night, not 24/7. If we waited to apply later, he might then be on oxygen too much to be accepted.

So we have seen this as insurance for future care, right up through skilled nursing, if necessary. Our son will not be able to help us if/when we need it. But, from the facility, we will be able to maintain the best relationship possible with him and his family, without being "needy." (Because of his brain disorder, we are the ones who sometimes need to step in to help.)

Getting back to the house. We love this place, and are in no hurry to leave. We will do some updates before putting it on the market. When we do sell it, we will move to a 2-BR apt. or villa in the CCRC across town. The house proceeds will pay the balance of our entrance fee to the CCRC; the remainder we'll invest (along with other savings) to continue paying monthly costs there.

Our CA homes were fixer-uppers that financed our move to the "dream home." This house will finance our move across town, so we have as many good years together as possible.

 

[W2R]

Gee, you have presented quite a few questions! I guess I'll just pick a few and answer them.

My home is not an investment; it is my home, the place where I live. It is paid off, and I always know that I have a place to go home to. I have lived here for 11 years and I do have an emotional attachment to my home.

It is not perfect, though I have come to terms with its imperfections. I would consider moving to another house if I ever found one that I like better than my present house, but so far I haven't. That said, although I am not actively looking for a new place to live, I am going to an open house this weekend. Just one. Just to see.

 

[FIREd]

Current residence: rented apartment. This is a short-term home for us, as we are still trying to figure what's next. We like the area but are hesitant to put down roots here. We own outright several pieces of property that could serve as our permanent residence once we are ready to settle down. But at age 39, we are not ready to make that kind of commitment just yet. When we make our choice, being close to family will be an important consideration. Snowbirding between Europe and the US could be an option as well.

 

[Amethyst]

Wherever I live must be beautiful. All else is secondary.

Amethyst

 

[GolfingDuo]

Home is house and is currently temporary as far as 7 more years is temporary. We have lived here for 9 years so far. Our previous home we lived 17 years. Of course this condition could change. We are planning to move to a warmer climate for lifestyle change as well. We will consider the new home more of a home base for plans to travel and to just enjoy a resbit from globe trotting.

 

[Alan]

For us, Home is where the heart is. We rent so have the flexibility of choosing where to make our home. Currently we live about half the year close to our son, and half the year traveling, seeking out beautiful places.

In 2 or 3 years we plan to do the snowbirding thing between where we live now and Yorkshire, England, in a town where our children were born, and where we still have lots of friends and are close to our siblings (apart from my brother in Australia).

 

[Katsmeow]

We downsized into a smaller but still fairly sizable home last year (we have adolescents at home). The biggest factor in choosing this home is that we have several pets and needed to buy where there weren't the standard 2 or 3 pet deed restrictions.

The house is on an acre and I really like the layout. DH (he is 65) does not want to ever move. He hates moving -- his dad was in the Navy and he moved a lot as a child -- and wants this to be his final house. On the other hand, I don't mind moving. I lived in the same house until I was 21 and it doesn't bother me to move. I find it an adventure.

For me this house is more of a compromise. It is 15 to 20 minutes from any stories or gasoline. I would rather be closer to amenities. But it was the compromise we made for having the pets. At some point we will have fewer pets (we don't plan to replace them all as age takes them...we will always have some though) so could theoretically 8 to to 10 years from now move closer in. At this point I would say we wouldn't do that as long as we remain in good health.

We originally planned to stay mortgage free in retirement but with the current rates we felt we wanted to take advantage of them and have a mortgage for about 60% of the value of the house at 3.49%. We don't feel it is any great risk as we could pay it off if we chose to do so.

Family is a major factor to us in staying where we are. We have 3 kids who live in this area (2 are still in our house). DH has older kids who live farther away but are in this state. But for the family considerations we would probably have moved to a different state. We did seriously consider it.

We tried to buy a house that we could live in for the long term. It is 1 story and the bathroom could be easily made handicap accessible. The biggest concern that I have from a health standpoint is that DH has very mild macular degeneration (dry) which has not progressed at all since it was diagnosed a couple of years ago. Right now, it is totally a non-issue but much longer term it could affect his ability to drive and that would leave me having to do a lot of driving which I wouldn't love.

 

[Meadbh]

I have owned my last two homes, a house and a condo, both comfortable, adequate for my needs, but not luxurious. Less than 10% of NW is tied up in my home and I owe nothing on it. If I needed LTC I would sell it, but otherwise I don't include it in my retirement portfolio. I have never wanted to be house poor. When I visit elaborate homes I wonder how the owners find the time to clean all that space and how many more years they will be working before the home is paid off.

 

[gardenfun]

great topic, imoldernu. I've been thinking about this a lot in my first year of ER. I'm single and my sons are on their own.
After 30 years of home ownership I'm a renter again. Mostly for cost reasons. I wouldn't be able to quit the work force if I had to keep paying a mortgage in northern California.
But now that I've been renting for a while, I appreciate the other advantages. No home maintenance worries. Simplified lifestyle. And I do like the idea of not being tied down to one place. Although the real estate market is really hot again around here--people seem to be able to sell quickly because of limited supply and lots of buyers coming out of the woodwork. Selling is easy again.
I did have "requirements" for my rental. I really wanted a place to plant some flowers and some tomatoes. And be close to stores and restaurants. Where I'm at right now, in an SF suburb, I have a little front yard, and I can walk to a family owned grocery store plus Safeway/Trader Joe's/Whole Foods, CVS, the PO, a bead store, a quilting store, the bank, several great restaurants, and the BART station to head into SF and Berkeley/Oakland, and the airport. Only use my car once or twice a week. It's heaven.
However, I have to confess to the "itch" to remodel now and again. In my years of home ownership I remodeled several kitchens and bathrooms. The kitchen and bathroom in my little rental could really stand to be updated. Oh well, life is full of compromises and I'll live with them.
Not sure where I'll be in 5 years--looking forward to finding out!

 

[JOHNNIE36]

God, I hope this is my last home! Recently, my wife got the urge to "upgrade" and move again. New house in the same community. I nixed that idea and agreed to do some more remodeling in our present house. I just couldn't stand the thought of moving again. Last September we celebrated our 40th anniversary and our latest addresss is the 15th we've had since we married. I love the location, the house itself and the neighbors. What more is there? I agree that it may come to pass that we have to move into a nursing home but I might "luck out" and just die here. That's what I would prefer. I look at it as all the houses in the past were investments and this is my home.

Just a note to add that of those 15 addresses, some were apartments, one was a condo and all the rest were houses.

 

[Alan]

However, I have to confess to the "itch" to remodel now and again. In my years of home ownership I remodeled several kitchens and bathrooms. The kitchen and bathroom in my little rental could really stand to be updated. Oh well, life is full of compromises and I'll live with them.
Not sure where I'll be in 5 years--looking forward to finding out!

DW still gets the itch to remodel, but I'm over that 'need' in my life

 

[Ronstar]

We own our home and plan to stay in it as long as possible. Rural/small suburban setting good for outdoor activities. Climate is definitely 4 seasons. I see our home as a hobby more than an investment. 5 acres to maintain with a planned "upgrade" inside and out. Maybe add an extra wing to my workshop.

 

[Walt34]

We own ours outright, a 3 bedroom ranch in a golf course community. Neither plays golf but we liked the house and the area, and this is one of the few areas here that has natural gas heat, important to us. (We like the heat on.)

In no particular order other major factors were proximity to family and not having to plan our daily lives around traffic, close to grocery stores, a hospital, and medical care.

This is the first house we've lived in that had a garage and that got us spoiled in just a few weeks. No more scraping ice & snow off the windshield, no more getting rained on bringing in groceries, no more heat-soaked car in the summer.

At the time we bought it we had no plans to move but with the recent experience with FIL's health issues we're more open to the idea of a CCRC in the next five years or so. Both FIL and my mother had a lot of help from adult children in moving from houses - we are not going to have that help so I'm thinking it is better to make that move before it becomes difficult/traumatic. And I'm starting to like the idea of zero maintenance when age takes its inevitable toll. Three years ago an inspiration was my next-door neighbor in his mid-seventies mowing the lawn with a walk-behind but lately I see that it is a struggle for him. I'm not gonna do that.

We enjoy the house but realize that nothing is permanent. Even it we wished to stay here until we die other circumstances may and probably will dictate otherwise. So face that and prepare for it. And I like the idea that assuming that I go first DW will be in a position where she won't have to make that move by herself.

The target would be a 2 bedroom/2 bath with den and garage. That way we can "have our cake and eat it too" with independent living in a detached or duplex house but with all the assistance needed available if it comes to that.

And my mother's experience in a CCRC was very positive. She was in independent living for 11 years and assisted living for six months. FIL stuck it out in the house too long and I'm convinced he'd have been much better off in a CCRC the last five years than hanging on to the the house and being isolated there.

Anyway, here's a pic of the house we're in now, taken at dusk a lit with a large flashlight. The house is lighted with a large flashlight, camera white balance set to tungsten, and that makes the gray overcast sky look a deep blue.

 

[obgyn65]

Exactly the same for me. Priority is functionality. I spend less than one hour a week in my kitchen.

I only have one condo in a big city. I paid cash for it, about 10% of my liquid assets at the time.

Planning to use this place for a long time. It will be the place I come back to from traveling.

I have owned my last two homes, a house and a condo, both comfortable, adequate for my needs, but not luxurious. Less than 10% of NW is tied up in my home and I owe nothing on it. If I needed LTC I would sell it, but otherwise I don't include it in my retirement portfolio. I have never wanted to be house poor. When I visit elaborate homes I wonder how the owners find the time to clean all that space and how many more years they will be working before the home is paid off.

 

[pb4uski]

We demolished and rebuilt our lake house prior to retiring and now live here year round. We plan to stay here forever, so we designed the rebuild with old-age in mind. While I include the value of our home less our mortgage in our net worth, it doesn't figure into our retirement plan other than a place to live and for Plan Z, something we could sell or reverse mortgage to pay for any nursing home care.

Since our lot slopes to the lake, it is a walkout with the upper floor being the main floor. The main floor is only four steps above grade on the street side and we have pleanty of space to build a ramp if/when the time comes. The main floor includes kitchen/dining/living great room and our master bedroom suite, so we could live on this floor if need be. The doorways are designed to be wide enough to accommodate a wheel chair and any swing doors have lever handles. If we want/need to the pantry could easily be renovated to become the laundry area (which is currently downstairs) since the necessary plumbing and electrical are in an adjacent wall.

The stairs are a bit wider than normal as well to accommodate a stair elevator if we ever need one to get to the 2 bedrooms, family room, full bath and laundry/utility room downstairs.

In the process we also downsized from ~2700 sf to ~2000 sf. (That has been the hard part).

We'll probably eventually become snowbirds, but will likely rent rather than own unless we found a community that we really liked and owing was more attractive as renting. We previously had two homes and at this point would prefer not to do that again.

 

[jollystomper]

We look at our house separate from our retirement assets. It is large and on more than an acre, which was great for raising the kids. It is very convenient to many things and with a lot of friends it is great for socializing.

While we have a lot of equity in it and a very small mortgage, moving from it will more depend on health/convenience issues. Its never fun to shovel out a 200 ft long driveway (and with am empty next due this fall I won't have my kids to help, time to get a bigger snow blower) and the yardwork can take a while (of course this is with a full time job, once I retire I might not look on it as such).

DW and I have discussed the possibility of selling this and using the equity to buy a large condo a some point in the future, but again that will more depend on lifestyle needs. At worst it could be an emergency "last resort" source of funds should we have misjudged our retirement expenses.

 

[pb4uski]

...Its never fun to shovel out a 200 ft long driveway (and with am empty next due this fall I won't have my kids to help, time to get a bigger snow blower) and the yardwork can take a while (of course this is with a full time job, once I retire I might not look on it as such).
.....

I hire a plow guy for the driveway and parking areas and then shovel/snowblow our decks and walkways. Writing a check is a lot easier than shoveling the driveway.

BTW, my plow guy has a unique billing system. He just calls each of his customers on the first of the month and let's us know what we owe for the prior month and we send him a check.

 

[Moemg]

I live in a large elevated house on Sarasota bay . It is becoming too big for us . I hate moving but have realized I need to get serious about downsizing for physical reasons not financial .I definitely want a one story ,well located , newer , no pool and small lot . This year we are remodeling the bathroom for our enjoyment and resale . Hopefully we will move in the next four years .

 

[MBAustin]

We bought and remodeled a one-story house in the same neighborhood where we had lived for the prior 10 years (in a now too big two-story house). Finishing that project and selling the prior house was actually the trigger for me to ER.

The house is almost completely accessible (everything except the guest bath, powder room, and storage rooms in the garage) - necessary due to DH's disability. I designed the kitchen to also be accessible (not that DH cooks - but he can manage if I'm gone for a week to visit family out of state) and fun for me to cook in (I cook nearly every night). It's about 2500 sq. ft. which is a little larger than we had planned, but it's very easy to manage.

We like where we live, and our kids haven't settled down yet so we have no reason to move to be closer to them. So no plans to move on the horizon, but things can always change.

 

[SumDay]

We've lived in our home for 29 years, and it's paid for. Our taxes are incredibly reasonable, but it's WAY more house than we now need since the kids are grown & gone. Every Saturday I *itch as I vacuum, and vacuum, and vacuum..... We've redone all 3 bathrooms, did the kitchen about 15 years ago, and usually paint or tackle one room a year. This year was the basement. DH is handy, so this keeps him busy now that he's semi-retired.

He waltzed into my office several months ago and announced that he wants to move. It's 2 story, and all the bedrooms are upstairs. He's got lingering side effects from chemotherapy, and his balance is poor. He's afraid he'll fall down the steps. Also, the yard is too big, but we pay someone to cut it, so that isn't our biggest issue.

Moving is NOT in my retirement plan. Maybe we'll just get him an electric lift he can ride up & down the steps. Who knows, but I'm hoping he forgets this idea (as he has many others) and is just content to stay here. I plan to die in this house, which very well may be the case if we have this "moving" discussion again.

 

[Katsmeow]

He waltzed into my office several months ago and announced that he wants to move. It's 2 story, and all the bedrooms are upstairs. He's got lingering side effects from chemotherapy, and his balance is poor. He's afraid he'll fall down the steps.

In that situation I would want to put the house on the market next week. I never really minded stairs all that much but DH insisted that we buy our downsize house with no stairs. We had a 4500 SF house that had stairs and moved to a smaller house with no stairs. A year later I am so, so, so happy we made the move. It is so nice to not have any stairs. I did fall on stairs once (at work) and broke my ankle and I wouldn't wish falling on anyone. (I also still remember the acquaintance that I knew who fell on stairs in her home and died.) With poor balance I would move in a heartbeat.

 

[imoldernu]

One of the points that some have brought up is using the house as a safety cushion in the event that finances become difficult. Sell the house... Reverse Mortgage... pay for Nursing home or CCRC or sell and downsize to rent etc.

This may not be the best plan, depending on circumstances... FWIW, I posted a comment on this thread
http://www.early-retirement.org/forums/f27/sharing-23-years-of-frugal-retirement-62251-3.html#post1214041
that you may want to read if you're not aware of the benefits of Medicaid. Depending on the circumstances, selling your house may be the worst choice.

Here's an excerpt from one of the posts covering this.

Perhaps the most important part of this thread on retirement, is the matter of protecting one's assets... and even more important, thinking ahead to protect the assets of a spouse, when health requires extraordinary expenses.

Since we, and our spouses will always be healthy, we don't think about what could happen. We just assume we'll both die at the same time.

Statistically that ain't gonna happen. If you already have a net worth of 2 Million dollars, don't read the rest... It doesn't apply to you.

Current medicaid law allows for payment of nursing home expenses under certain conditions. If you understand those conditions, you could save hundreds of thousands of dollars for yourself, your spouse, or your estate... (your kids).

Here are the things you should know about:

Current nursing home costs average from $75,000 to $90,000/yr. A friend on Long Island is currently paying over $135,000/yr. for just basic care.

The state (medicaid) does not automatically pay for this.

You should understand "exclusions".

Know that the "look back period" is now 5 years.

...........................................
As long as a married couple have assets, if one spouse should have to go into a nursing home, the couple's assets will be used to pay for the medical care until the assets go below a certain level, at which time, the state medicaid program will pay for the nursing home care. The asset level varies by state.
............................................

Here's an example that happened to friend, that points up the importance of planning ahead. Bob retired with his wife May, to Florida from Maine. He sold his Maine house for $280,000 and planned to use this as his nest egg during his retirement. He bought a mobile home..(downsized)for $35,000. Shortly after retiring, May began a long slide into Alzheimers, and after three years has to go into a nursing home. (at the time $65,000/yr.) She lived there for 5 years before passing away. Because Bob and May had assets from the sale of their house, medicaid would not pay, and The nest egg was gone.
..............................................
Now, here's what happens....
1. In counting assets, Bob is allowed certain exclusions. In General, the exclusions in his case, were... His house @ $35,000, His car $20,000, Cash (then, $40,000) and some smaller amounts like burial plot and non cash life insurance.
2. The logical thing to have done would be to give away the money in the nest egg, so the state wouldn't take it. That's where the lookback comes in. If he had given away the money to his kids, the state would not have taken the money... but... to prevent this from happening, the state will "look back" five years and deny medicaid payment,if this 'gift" transaction had taken place.

As it happened, May died, and Bob had nothing but his Social Security left to live on.
.................................................

Here's what I took from this...
Nine years ago, we owned a mobile home, and a park model trailer in a campground. Understanding Bob's situation, we took some of our savings, and purchased a home outright. This took the money out of our assets and put it into the house "exclusion". Now, if one of us shold have to go into a nursing home, the state may take from our savings account, but they will not take the house... Essentially this means that one of us will still be able to keep some substantial assets, hopefully enough to stay above the poverty level.
.............................................

This is just one of many, many reasons to look ahead to the future.
See the link to Elder Law on Exclusions. (website)

http://www.elderlawanswers.com/medicaid-planning

Most of you probably have some understanding of the laws, but the matter of elderlaw is extremely complex.

IMHO, when a case involving medical expense, or the legal position of any older relative, the very first thing to do is to contact an geriatric or eldercare lawyer. Not just any lawyer, but one who is deeply involved in elderlaw.
Bookmark the site on Elderlaw. There is a series of Q and A's bout real life situations, that should shed much light on a difficult subject. I thought I was relatively knowledgeable but found that in more cases than not, I had no idea of how the law treats estates and legal matters involving older people.


I have more nightmare stories about friends or neighbors who lost literal fortunes because of small errors in handling legal matters, either because of mistake in timing, or failure to obtain proper legal permissions. Anyone who has dealt with estate administration will understand what I'm talking about.

FWIW, I don't pretend to be a legal reference, and so some of the above may be wrong. Feel free to correct errors.

 

[ShortInSeattle]

We're in a condo in Seattle. We consider it part of our net worth but not part of our retirement assets. We don't plan to sell it.

We bought near the height of the housing crash, and thus ended up with a much nicer place than I ever thought we'd live. I think of it as our palace in the sky. It's a nice building, but the big perk to me was the view. Views of the city outside every window. Gorgeous at night. We have half the space we used to, but the city is our backyard, which is perfect. Parades go by, parks are just a bus ride away, and we can see holiday fireworks from our living room. I feel very spoiled here.

We had a nice home before, but it came with a lot of commute time and a fair amount of maintenance and worry. Gutters overflowed. Our yard was a constant battle. Petty thieves broke into houses nearby. It was expensive to heat, and took hours to clean.

Our HOA fees here are fairly hefty, but include all maintenance, a capable staff, and some really nice amenities. Once we pay our condo off, our HOA and taxes will add up to the equivalent of a modest rental payment, but should be manageable on our retirement budget. Or if we relocate (doubtful) we could rent this place at a nice monthly cash flow.

In an ideal world, I can see us paying our home off right around ER time then alternating between relaxation and travel. We have many retirees for neighbors who seem to be doing just that.

SIS

Who never thought she'd be a condo person!

 

[Sue J]

In July it will be 30 years since we bought our house. Four bedrooms and two full bathrooms (2BR and 1 bath on each floor) and an attached 2 car garage. Paid off the 30 year mortgage early. We plan on staying. We raised the family here and still like the area and the neighborhood. DH loves having a yard and garage and I cherish our deck with a big awning in the summer.

As we age I see us being able to stay in the house. We can downsize by just not using the upstairs. The laundry is in the basement but if needed one of the first floor bedrooms that's next to the bathroom could be converted to a laundry although I don't know if that would make sense, resale wise.

Our ties to the area are my Dad (almost 87), our sons (28 and 26) and my sister. As that changes I would consider another area of the country that didn't have such difficult winters. Most of DH's family are in the Denver area. I would consider moving closer to them but that's not much of an advantage, climate-wise.

We like owning. Our property taxes are only $2400/yr so we couldn't live any cheaper by renting. The upkeep is constant so that will be a consideration as we get older. The simplicity of a condo is interesting but I'm hesitant about condo fees and HOA rules. We like our privacy and autonomy.

We are deeply rooted and staying, but open to change down the road. Seeing the changes my Dad has gone through makes me think about the aging issues more.