Curious how others handle principal residence...

L

LARS

Thinks s/he gets paid by the post
Joined
Oct 23, 2009
Messages
1,190
... in calculators like FireCalc and its impact on "allowable" spending.

Personally I have not included house value by selling it at some future date as a lump sum payment a la FireCalc. Thus, house becomes a substantial $ amount for margin of error spending in later (much) years.

Still, makes me wonder if I am being way too conservative on spending...
 
I ignore it as I have no plans to downsize or sell. If I did, I would enter the downsizing benefit in other portfolio changes.
 
I agree with pb4uski. I don't include it. It's our plan D or E if one (or both) of us needs to go into a nursing home for an extended period of time. At that time our spending number is so much more...

FWIW - our house, because of our overpriced real estate market, is about 1/3 of our net worth - but not considered at all in firecalc.
 
WE look at our house as a plan B if we decide to downsize further to a small condo. We set our yard up to be low maintenance with astro-turf, etc so could hire out the little bit of work to be done if necessary. Mostly we don't think about it.
 
I suspect most don't include it.

But a few a deliberately planning to downsize after retiring, and these folks may include part of the value of their home to count on for future retirement assets.
 
I don't include it, but realistically if we get so sick that we must live in assisted living, it becomes my backup plan to cover the LTC costs so that I don't have to pay for LTC insurance.
 
We're in the don't include camp. It is our LTC insurance if the need arises to prevent emptying our retirement portfolio for the remaining spouse who would then have enough for their remainder of life.
 
We include our primary residence because we consider Estate “death” taxes and inheritance taxes from our estate in our planning. We’re just below the threshold for the federal estate tax and assume we may cross it. Our kids will definitely pay inheritance taxes for Pennsylvania unless we eventual change states.
We also like the bigger number on our spreadsheets! [emoji3]
 
Ready said:
I don't include it, but realistically if we get so sick that we must live in assisted living, it becomes my backup plan to cover the LTC costs so that I don't have to pay for LTC insurance.
Click to expand...

+1.

We looked at LTC insurance, but think they are, at best, a mediocre value. Deductibles, co-pays, and caps all water down the policy. So, if needed, we throw in the house and call it a day.
 
Ready said:
I don't include it, but realistically if we get so sick that we must live in assisted living, it becomes my backup plan to cover the LTC costs so that I don't have to pay for LTC insurance.
Click to expand...
Assisted living is not the same as a nursing home. You don't have to be sick to live in such a facility.

I don't mind the idea of communal living where someone will clean my place, meals are prepared and I don't have to deal with most chores. I can choose to use such a facility while I still drive my own car and come and go as I please, even travel. Nothing nightmarish about it.

LTC insurance does not cover those aspects of assisted living.
 
audreyh1 said:
Assisted living is not the same as a nursing home. You don't have to be sick to live in such a facility.

I don't mind the idea of communal living where someone will clean my place, meals are prepared and I don't have to deal with most chores. I can choose to use such a facility while I still drive my own car and come and go as I please, even travel. Nothing nightmarish about it.

LTC insurance does not cover those aspects of assisted living.
Click to expand...



You’re confusing assisted living with independent living. Memory care is often in assisted living but with locked facilities so they don’t wander off. Assisted living also ensures you get your needed medications, assists in bathing and dressing, if needed, and deals with incontenence. I don’t think they drive. Long term care is when full time nursing care is required. Independent living they can drive, but are checked on daily. The typically eat in a cafeteria, so they don’t have to cook, but can cook in their apartment if they choose. Assisted living they can’t cook.
 
I don't add my primary residence into FireCalc and other planning software for retirement planning. I do, though, consider it as a large backstop if everything else went south. Gives me some assurance of a back-up plan if needed.
 
I use the Fidelity RIP as our main planning tool.

We recently bought a fairly expensive house that will will likely stay in until the kids are launched, but probably not too much longer -- it has too many stairs to be good for aging in place, and will be too big once the kids aren't living with us. Youngest is 12 so we've probably got 10 years or so here.

I have sale of the house and purchase of a condo roughly 1/2 the current house value plugged in as our estimate. That drops us down to a 1-2% at that point. Works for me....
 
LARS said:
... in calculators like FireCalc and its impact on "allowable" spending.

Personally I have not included house value by selling it at some future date as a lump sum payment a la FireCalc. Thus, house becomes a substantial $ amount for margin of error spending in later (much) years.

Still, makes me wonder if I am being way too conservative on spending...
Click to expand...
I do not choose to include it either, but YMMV.

Your choice to include or not include it, depends on what you want the results to represent. If you get "95%", do you want that to mean you would have a 95% chance of not running out of money, before you sold your house in desperation, or even after you sold it, without buying another? That should help you to decide on your input values.

If you plan to downsize, the portfolio changes inputs will help as REWahoo points out. I am in my retirement house already, and do not plan to downsize further.
 
Last edited:
House is a little money pit. I don't think of it as a spendable asset. The plan is eventually move to a more tax friendly State. Hopefully will break even on the retirement home, and decrease overhead.
 
My house is my castle and I love it. Upkeep is much cheaper than rent.

Not a spendable asset but decreases my overhead and helps me to live large - :)
 
I don't include it in Firecalc. I do include the expenses for the house in my spending for Firecalc.
 
Also in California like Robbie, and my house is not included as prop tax is low (3k yr) + prop ins only 980 + 670 (earthquake ins). So that's only around 400m to live in SF Bay. Plus houses are 40' apart which is important to this claustrophobic
 
Last edited:
Dash man said:
You’re confusing assisted living with independent living. Memory care is often in assisted living but with locked facilities so they don’t wander off. Assisted living also ensures you get your needed medications, assists in bathing and dressing, if needed, and deals with incontenence. I don’t think they drive. Long term care is when full time nursing care is required. Independent living they can drive, but are checked on daily. The typically eat in a cafeteria, so they don’t have to cook, but can cook in their apartment if they choose. Assisted living they can’t cook.
Click to expand...

Yes, assisted living ensures you get needed medications and and assistance, if needed, with bathing and dressing, but only if needed. Yes, you can drive. At my Dad's assisted living place a couple of the residents have cars, and sometimes drive. They have to check out and check in.

Things may not be as cut and dried as you think.
 
i don't include a house in any income calculation until it is actually sold . i can't draw out 4% of the living room
 
You must log in or register to reply here.

Similar threads

T
Looking to be FIRE'd in a few years...or sooner
Replies
12
Views
1K
Surewhitey
S
Finance Dave
Pension at these interest rates?
2
Replies
29
Views
4K
bada bing
B
P
After FI: late 30-something wondering what her purpose is
Replies
14
Views
892
LateToFIRE
L
A
ER @ 50...Can I realistically do it?
Replies
12
Views
3K
Ace300
A
Romer
My Lessons Learned and why everyone should build a custom model with Excel
2 3 4
Replies
95
Views
14K
Ronstar
Ronstar

Latest posts

Back
Top Bottom