Retiring in 2-5 years? Buy Now Or Wait?

[KingOfTheCheapos]

So I am due to retire in no more than 5 years and will almost certainly be living in a new home (current home is too big) and almost certainly out of state.

And I'm curious how people handled the transition and why?

1) Did you just wait it out until a few months before the change?
2) Or did you pre-emptively buy before hand?
3) Did you live in the area first and then buy?

I have the cash to buy another home now. My reasoning is that home prices will probably greatly exceed inflation so why wait?

 

[pb4uski]

We bought a lakefront seasonal camp in 2015 close to the summer home where I grew up. We used it on weekends at first, then ended up living there in the summer (I worked remotely). In late 2010 we demolished and rebuilt a year-round home, moving in in May 2011. We sold our main home in November 2011 and I retired in early 2012.

Now in our case it was only 1/2 hour drive from our main home so it was pretty easy.

We later started spending winters in Florida and bought a condo down there and became Florida residents in 2020 making the winter condo our home and keeping the other property for summers.

 

[RunningBum]

You were the guy that started the thread "I have no idea where to retire!" https://www.early-retirement.org/forums/f29/i-have-no-idea-where-to-retire-109409.html, with a huge variety of places to consider. So a month ago you had no idea, but now you want to lock in to a place but probably not move for a few years? That's just crazy. Are you for real, or are you just enjoying telling wild stories?

I also notice that in that 8 page thread, you only had two posts, both on page 1, then went silent. Hmmm. I'm mildly entertained, but not enough to spend any more time on a serious response.

 

[KingOfTheCheapos]

You were the guy that started the thread "I have no idea where to retire!" https://www.early-retirement.org/forums/f29/i-have-no-idea-where-to-retire-109409.html, with a huge variety of places to consider. So a month ago you had no idea, but now you want to lock in to a place but probably not move for a few years? That's just crazy. Are you for real, or are you just enjoying telling wild stories?

I'll give you the benefit of the doubt, but your suggestion of me telling wild stories is condescending and insulting and says more about you than me. If you don't like a post then just ignore it.

But if you check my posting history you'll see in the last month I have visited: FL, AL, GA, LA, TN, NC and I've narrowed it down for sure and can pull the trigger if needed.

 

[OldShooter]

... My reasoning is that home prices will probably greatly exceed inflation so why wait?

Not sure that is true. In the big picture, home price increases cannot greatly exceed household income growth. Housing costs are never going to crowd out eating. So do you expect household income to "greatly exceed inflation" over the long term?

 

[MichaelB]

Let’s please remember we’re among friends, so let’s keep it friendly,

 

[RunningBum]

I'll give you the benefit of the doubt, but your suggestion of me telling wild stories is condescending and insulting and says more about you than me. If you don't like a post then just ignore it.

But if you check my posting history you'll see in the last month I have visited: FL, AL, GA, LA, TN, NC and I've narrowed it down for sure and can pull the trigger if needed.

OK. Narrowing down a place a month after you had absolutely no idea and locking into it and not expecting that to change after 2-5 years sounds like a bad idea to me. Really bad.

 

[RetireeRobert]

So I am due to retire in no more than 5 years and will almost certainly be living in a new home (current home is too big) and almost certainly out of state.

And I'm curious how people handled the transition and why?

1) Did you just wait it out until a few months before the change?
2) Or did you pre-emptively buy before hand?
3) Did you live in the area first and then buy?

I have the cash to buy another home now. My reasoning is that home prices will probably greatly exceed inflation so why wait?

I was already retired at time of our last home move. We planned our dream home and had it built. About a 45 minute drive from where we lived. Once it was built and had received the county's "certificate of occupancy", it took us a good nine months to "gradually" move. Every trip to the new home we would take a few boxes of "stuff". We finally got to the point where we could spend time and stay at either home. Part of the slo-mo process was youngest daughter was finishing out her senior year at high school, so we wanted her to be able to graduate from her old school. Anyway, we would spend weekdays at old home and weekends at new home. For a good long while it was like going on vacation every weekend. Even after a full two years of finally being in the new home fulltime, it was still like being on vacation! Anyway, at the time, the real estate market was just coming out of being a buyers market, so we held on to the old house for two years after fully moving before selling it.

 

[Aerides]

Most folks don't do the whole big move until after they actually retire. Desires change. It's best to retire, chill for 6 months or so, and then decide.

No one can guess what the RE or any other market will do in 5 years.

 

[SnowballCamper]

We bought a lot in the town we met, about eight years before retiring. Being sent around the country by the Army, over fifteen years, gave us some perspective on where we wanted to retire. A bit more privacy would be nice, now that we've been here for a few years, but other than that we're happy. Definitely staying put for now.

 

[FreeBear]

If you bought now, what would you do with the 2nd house now? Vacation home/snowbird and/or become a landlord?

Another option is to hold at least part of your cash in equities to fight “inflation”, then buy and move when you actually retire. Your retired self may be very different, with different needs. Also you’ll have more bandwidth to deal with 2 homes and/or moving when retired.

It took us 5 years to figure out that we wanted to move 2000 miles away after retiring. It’s taking almost 2 more years to execute the plan. We never would have had the time or energy to do this while w*rking, even from home.

 

[kcowan]

I'll give you the benefit of the doubt, but your suggestion of me telling wild stories is condescending and insulting and says more about you than me. If you don't like a post then just ignore it.

But if you check my posting history you'll see in the last month I have visited: FL, AL, GA, LA, TN, NC and I've narrowed it down for sure and can pull the trigger if needed.

Yes i figured you just needed a lot of help with decision-making. Might as well use the resources to assist you during your 6 week posting history...

 

[W2R]

OK, here's a thought experiment: How would YOU ("KingOfTheCheapos") respond to a thread with this title:

"I am 14 and plan to get my driver's license in 2-5 years, after I turn 16. Buy a car now, or wait?"

I think that will give you some idea as to my answer to your question.

Basically, I think you are jumping the gun. It takes a year or so to adjust to retirement, know where you want to retire, and know what kind of house you'll want in retirement. Most of us find our priorities shift a bit when we retire.

So, my response is just be patient, work on your retirement planning to make sure you are financially set, and wait until at least a year after you retire before you make decisions like this.

1) Did you just wait it out until a few months before the change? No, a few years after. Put the house on the market about 18 months after retirement, decided not to move a few months after that.
2) Or did you pre-emptively buy before hand? Thank heavens, no.
3) Did you live in the area first and then buy?Well, that was the plan, had we ever moved to Missouri. Instead, I ended up buying a nicer house here, where we already were living, 6 years after retirement.

 

[Al in Ohio]

You were the guy that started the thread "I have no idea where to retire!" https://www.early-retirement.org/forums/f29/i-have-no-idea-where-to-retire-109409.html, with a huge variety of places to consider. So a month ago you had no idea, but now you want to lock in to a place but probably not move for a few years? That's just crazy. Are you for real, or are you just enjoying telling wild stories?

I also notice that in that 8 page thread, you only had two posts, both on page 1, then went silent. Hmmm. I'm mildly entertained, but not enough to spend any more time on a serious response.

I noticed that also. Besides, who hasn’t heard we’re in another housing bubble that will pop within 5 years. You’re probably at it’s peak right now.

 

[Major Tom]

I think along the same lines as those who advise to wait. My brother and his wife retired about 5 years ago. They stayed in the same house they had owned and lived in for something like 40 years. Just a few months ago, they sold that house and bought another one, which will be their final retirement house. It is in a quieter and more rural setting than the previous house. They love it. It is exactly where they want to be.

Selling and buying houses are fairly big decisions. Ideally, you want to make sure are doing the right thing for you. Is there any compelling reason why you shouldn't stay in the same house once you retire, even if it is a little too big? If not, stay where you are. Then retire, and take your time deciding what you want do next, so you are sure it is what you really want to do. Only you can decide what you want, and these decisions can take time.

 

[Markola]

A lot can happen in 2-5 years. I think a person can’t tell until after they make the transition to ER and look back how much of their detailed planning proved real and how much was a coping fantasy crutch to get through a career and to ER.

We were going to rent out our house and travel full time for a year. We didn’t do because of COVID and now that idea is like, “Meh, we’ll travel here and there when we want to.”

With so many variables and permutations possible 2-5 years out, especially if two people are involved, I’d never want a hunk of optional real estate to turn out to have been my fantasy coping crutch.

 

[VanWinkle]

I am planning a move to eastern Tennessee next year and just sold my home. It sold for 40% more than it would have before covid!! I intend to rent for the next 2 years(one of those years in Tennessee) before committing to a purchase. I would recommend renting for a year first, as the cost of buying and not liking the area is too high for me.

VW

 

[JDARNELL]

I am planning a move to eastern Tennessee next year and just sold my home. It sold for 40% more than it would have before covid!! I intend to rent for the next 2 years(one of those years in Tennessee) before committing to a purchase. I would recommend renting for a year first, as the cost of buying and not liking the area is too high for me.



VW

We moved to East Tennessee last year. Really enjoy it. Not a lot of inventory right now.

 

[VanWinkle]

We moved to East Tennessee last year. Really enjoy it. Not a lot of inventory right now.

We're looking at the Tellico Village area. How has everything gone with the move for you?

Any tips appreciated!!

VW

 

[novaman]

In my opinion 2-5 years out is way too early to commit to a retirement home now.

So many things could change in the interim-

One of you could suffer a medical event leaving you wheelchair bound or struggling to walk and suddenly that multilevel home you bought isn’t going to work.

Your parents, or grown children, or grandchildren could have an unexpected change in life circumstances and need to come live with you for the long term.

(Btw all these things have happened to my friends)

So I would wait until my retirement is imminent and then start looking for something at that time. It could be worthwhile to begin further investigation into exact locals, neighborhoods, builders, but I wouldn’t pull the trigger at this time.

 

[kcowan]

We retired and traveled then bought a snowbird place after 7 years and spent 6.5 months there each year. Now have sold that and bought another one. Times plans and attitudes change.

 

[meleana]

So I am due to retire in no more than 5 years and will almost certainly be living in a new home (current home is too big) and almost certainly out of state.

And I'm curious how people handled the transition and why?

1) Did you just wait it out until a few months before the change?
2) Or did you pre-emptively buy before hand?
3) Did you live in the area first and then buy?

I have the cash to buy another home now. My reasoning is that home prices will probably greatly exceed inflation so why wait?

We had just assumed we would have to sell our house in NY first before we could buy one in NH. So for us we thought we would have to retire first and then sell our home. We intended to pay cash as we had not had a mortgage for a very long time and wanted it to stay that way going into older age. (we were already in our 60's)

After I left my job, I set up for us to meet with a fee only financial advisor. He needed some estimates on what housing could cost us in NH. So I looked a lot on line and gave him some figures and he then told me what amount we could reasonably afford when my husband retired, which at the time we thought would be in about 2-3 years or so when I would be 65 and could go on Medicare. (I was on his employer health insurance and I am 2 years younger then he is).

We took a ride up to NH to look at some housing, including the community where we now live. On the way home we were kind of bummed because we thought we could not buy the house and there were only like 10 lots left. We figured they would be all sold way before we could buy and it would be almost impossible to find anything else like it in NH, and something affordable.

But- a week later- at the urging of some people on another forum I belong to, I called our Financial Advisor to tell him about the house. He told me to go ahead and do it! He said not to worry about selling our home first- that it would eventually sell- and we could manage everything in the meantime and he would help us with the particulars.

In addition, my husband was getting weary of working and wanted to retire sooner rather than later. The Financial Advisor told him he could- actually he could have even sooner than he eventually did- which was just 4 months shy of his 66th birthday. And it just so happened to fall on the closing date of our new house!

It helped that the house being new construction was going to take awhile to build. And we had a lot of cash reserves for the deposit and for the "extras" being put into the home as it was being built.

Our former house was put on the market the same day we drove back up to NH to sign the papers for the new house. We had a buyer the very next day! We closed on our former home on Sept. 30 and ironically we moved into our home buyer's former house as renters, as they moved into our former home as owners! Having renters enabled our home's buyers to get their mortgage without having to wait to sell THEIR house to buy ours!

BTW- I went on COBRA for 2 months, but our financial advisor urged me to do an ACA plan since we have no pensions and not collecting SS and mostly using cash to live on, so income very low. Best thing I ever did in regards to health insurance. Went from $500 per month premium to a $34 per month premium.

*We had vacationed in New Hampshire several times in the past plus have a timeshare here, so we were familiar with it. Plus our only child lives in the state. But as I mentioned in another thread of yours, the lifestyle in the community we are in is a lot different from where we used to live.

I am glad we didn't wait to do the whole thing- quit my job at 62 (3 years earlier than I planned), sell our home in NY, buy the NH house, hubby retire later on, etc., as a month after we moved COVID hit.


One thing I will say is doing a new construction home is difficult when you live 6 hours away and one of you is working. We could not make weekly routine checks on the construction progress and had to rely on the realtor to keep us in the loop and send photos. Not ideal to say the least. Most of it fell on me since I was home. But I was also emptying the house out (we got rid of A LOT- and I mean A LOT), packing, finances, dealing with the realtors on both ends, dealing with movers- remember- we had to move twice!, making all the necessary changes of addresses and accounts like with the utilities, for example. Can you say STRESSFUL? I told my husband even if we hate it we are never moving again! LOL! Of course, we do not hate it at all. There are things we like and things we don't. But that's life. Nothing is perfect.

Sure- if we would have waited we would have gotten like $100,000 more for our NY house. But then we would have never been able to afford anything here that we would have wanted.

And one more thing: for years we analyzed where to retire to. We wanted it to be Vermont badly, but taxes on SS and the political environment there turned us off to it, though my heart is still there for so many other reasons. We vacationed there every year for 22 years. Always felt like home- but we were on vacation, so...

We even thought about Nevada or Idaho or Colorado. Yeah- we did consider Florida or Tennessee or NC or SC as well.DE and PA. We were open to a lot of places.

But NH fit the bill overall for our priorities. Familiarity, our son living here, the low taxes overall, a political group we aligned with, good freedom index, closeness to Vermont, the landscape.



And that day, finding this house sealed the decision for us.

 

[Bamaman]

We're looking at the Tellico Village area. How has everything gone with the move for you?

Any tips appreciated!!

VW

Tellico Village is a highly desirable place to be. And prices in every desirable real estate development in East TN, Western NC and NE Georgia are skyrocketing.

If you can swing it, go ahead and buy now. My sister, like many others from Memphis, spends summers in NW NC, and she's remarked about house prices. My daughter lived in Atoka & Brighton. We left one in Arlington.

Moving from West TN to East TN and you'll think you've died and gone to heaven.

 

[JDARNELL]

We're looking at the Tellico Village area. How has everything gone with the move for you?

Any tips appreciated!!

VW

We have owned our home a year tomorrow and we like it here. We live about 60 miles northeast of Tellico. It took a little getting accustom to the slower pace but there is plenty to do. Everyone is extremely friendly.

 

[CardsFan]

OK, here's a thought experiment: How would YOU ("KingOfTheCheapos") respond to a thread with this title:

"I am 14 and plan to get my driver's license in 2-5 years, after I turn 16. Buy a car now, or wait?"

I think that will give you some idea as to my answer to your question.

Basically, I think you are jumping the gun. It takes a year or so to adjust to retirement, know where you want to retire, and know what kind of house you'll want in retirement. Most of us find our priorities shift a bit when we retire.

So, my response is just be patient, work on your retirement planning to make sure you are financially set, and wait until at least a year after you retire before you make decisions like this.

I vote this the best response to OP's question.

You might spend less now, on a place you really don't like long term, and more later to find the place that fits the "you" 2-5 years down the road. So be it.

Another option could be to buy a building lot where you think you want to go, but don't build until after you retire. If you change your mind, even if you take a hit on the lot, it will be far less than on a house, and you could even make some money if the area is still hot.