54, discouraged but hopeful in California

[Mango1956]

http://www.early-retirement.org/for...ady-to-go-to-new-mexico-32123.html#post593749

Hi all,
This is an update on our situation since I posted the above in 2007. Hard to believe almost 3 years have passed since I posted this. Changes since the 2007 post:

Savings now 460K (down from 568K)
Still no pension for either DH or me
Work situation/additional savings same as in 2007
Want to retire in 5 years
Figure we can live on 40K per year
SS for both will total 22K/year at age 62.
Firecalc shows 99% successful based on 30% stock, 70% bond split, and factoring in SS at 62.
Only debt is 99K owed on the land in New Mexico.
House is now probably only worth 300-320K (down 100K from 2007)

The worry is that we now won't be able to sell the house, pay off the land in New Mexico,and still have enough money to build on the land. We've considered selling the land and staying put in our paid for house, and banking the money we are currently paying on the land. But land on the development is not moving right now, so it isn't an option-may be in a few years. In the meantime, we continue to enjoy living here in small town Northern California, continue saving, and enjoying life. Luckily, DH does not mind his job, is having fun playing in his instrumental rock band, "Points North", and I continue to make a little money (15K/year)gardening. Have also taken up watercolor painting, which is a great creative outlet for me. So life is pretty good, but the last few years have been a bit discouraging.
Thanks for listening, and any comments are welcome.
Mango

 

[Amethyst]

Mango,

Do you sell what you grow, or are you doing specialty gardening for other people? (I assume it would be something way beyond what ordinary landscapers are capable of doing).
Either way, how do you manage to make $15K at it? Sounds like fun.

Amethyst

http://www.early-retirement.org/for...ady-to-go-to-new-mexico-32123.html#post593749

I continue to make a little money (15K/year)gardening.
Mango

 

[Mango1956]

Amethyst, 9K of the gardening work is at our local community college Horticulture department (part time temporary, but been there 4 years now after going through the Hort program) and the other 6K is from garden design and consult work with folks in the community. I have a niche business that doesn't compete with the "real" landscapers in town. Most of my business is via word of mouth and I don't really go looking for it. It's fun, and very gratifying.

 

[landonew]

Amethyst, 9K of the gardening work is at our local community college Horticulture department (part time temporary, but been there 4 years now after going through the Hort program) and the other 6K is from garden design and consult work with folks in the community. I have a niche business that doesn't compete with the "real" landscapers in town. Most of my business is via word of mouth and I don't really go looking for it. It's fun, and very gratifying.

Good deal, that's excellent.

$15k/year gardening in Southern California ... I would've guessed medical marijuana. I'm kidding, of course.

 

[Katsmeow]

The worry is that we now won't be able to sell the house, pay off the land in New Mexico,and still have enough money to build on the land. We've considered selling the land and staying put in our paid for house, and banking the money we are currently paying on the land. But land on the development is not moving right now, so it isn't an option-may be in a few years.

This has been an issue for us. At the beginning of the year we had a great plan. DH was to retire entirely (taking a large lump sum instead of pension). I would semi-retire and work very part time. We would see our big, too expensive house with little equity in it. We would downsize to a smaller house we would pay cash for. The market has been not awful for selling real estate here but not good either. We worked the numbers all seemed fine...

Seven months later. DH did retire and I did go part time. We found what we thought was a downsize house. We paid cash partly with after tax money and party with money from an IRA (no penalty since DH is 62 but had to pay income tax on it).

We got our house ready for sale, listed it.

That is when things started to go a bit off the rails.

As it turns out, the remodeling we planned to do to the downsize house is not feasible so we are looking at demolishing and building. If we build for cash we will end up paying income tax at a marginal rate of 35% so that doesn't seem very appealing.

In the meantime, market has worsened for houses and house with little equity has turned into house with no equity. So if we sell it we will likely be bringing money to closely (more taxes to be paid).

Theoretically we could do all that but it really eats into the retirement funds. We've considered staying in the existing house a couple of years and then building (don't want to sell the land since we really like the location). But the house is really expensive to maintain.

We are considering getting a mortgage to build the new house but will need to sell old house to do that. Sigh.

 

[Mango1956]

Good deal, that's excellent.

$15k/year gardening in Southern California ... I would've guessed medical marijuana. I'm kidding, of course.

As it happens, we live in a county in northern Calif. where marijuana is the biggest cash crop. But up here, they are called "growers" and not "gardeners". How do you tell a grower from a gardener? A grower shows up at the nursery in a brand new truck and loads it up with the most expensive bagged compost they have. A gardener shows up in an old beater pickup (or a 95 Honda Accord in my case) and asks "what's on sale?"
Mango

 

[haha]

meantime, we continue to enjoy living here in small town Northern California, continue saving, and enjoying life. Luckily, DH does not mind his job, is having fun playing in his instrumental rock band, "Points North", and I continue to make a little money (15K/year)gardening. Have also taken up watercolor painting, which is a great creative outlet for me. So life is pretty good, but the last few years have been a bit discouraging.
Thanks for listening, and any comments are welcome.
Mango

Advice isn't worth much, and mine perhaps less than some, but I would really give some thought to finding a way to get rid of the land. If you are living in No Cal where you already have a house with an established tax base, social and business connections, and one of the world's best climates, is it really wise to pull up and go to NM? Building in remote areas always costs a lot more than one might think. Also, depending on weather in your chosen spot you may need at least a 4WD vehicle to give you year around access. You may have expensive road maintenance issues, etc, etc.

Right now you earn $15,000 doing skilled gardening. On your land you may wind up doing back-breaking labor for way less monetary return, and you are perhaps unlikely to find high-pay clients for your skills.

To say nothing of the life enhancement that comes from being able to head down to San Francisco, or over to Tahoe or Reno for R&R. Having the Pacific Ocean close by is a big plus too. Just being able to spend a day listening to and looking at the surf is major therapy.

Ha

 

[Mango1956]

Advice isn't worth much, and mine perhaps less than some, but I would really give some thought to finding a way to get rid of the land. If you are living in No Cal where you already have a house with an established tax base, social and business connections, and one of the world's best climates, is it really wise to pull up and go to NM? Building in remote areas always costs a lot more than one might think. Also, depending on weather in your chosen spot you may need at least a 4WD vehicle to give you year around access. You may have expensive road maintenance issues, etc, etc.

Right now you earn $15,000 doing skilled gardening. On your land you may wind up doing back-breaking labor for way less monetary return, and you are perhaps unlikely to find high-pay clients for your skills.

To say nothing of the life enhancement that comes from being able to head down to San Francisco, or over to Tahoe or Reno for R&R. Having the Pacific Ocean close by is a big plus too. Just being able to spend a day listening to and looking at the surf is major therapy.

Ha

Ha, you pretty much sum up the advantages of staying versus going to NM. One of the big drivers of moving to NM is that I have a sister (retired)in Albuquerque, and we're very close. It would be great to live nearer her so we could hike, do art, and enjoy all the things we have in common. Also, we have always wanted to live on acreage in a quiet, beautiful area (too expensive for us to do that where we live). If we do stay, and can manage to sell the land, we'll likely, once retired, purchase a 4WD truck and pop up camper, so that we can use our home as a base camp and travel at will. We just need to make a decision at some point.
I do worry about the deterioration of our neighborhood over time as we age. Every time someone's chronically barking dog breaks the stillness, I think about how nice it would be on 40 acres of quiet. Thanks very much for your comments, and well said.
Mango

 

[Milton]

We've considered selling the land and staying put in our paid for house, and banking the money we are currently paying on the land. But land on the development is not moving right now, so it isn't an option-may be in a few years.

People are holding out for unrealistic amounts. Absent toxic waste, virtually any land will sell at the right price.

No doubt there are pros and cons of NM versus northen California. But unless unusual circumstances apply, I agree with Ha that is probably doesn't make sense to carry the costs of the raw land until you are ready to move. You can always find another property if/when the time is right (preferably closer to your sister: I'm not sure how many get-together opportunities there will actually be if she lives three hours away from where you wind up).

 

[Mango1956]

People are holding out for unrealistic amounts. Absent toxic waste, virtually any land will sell at the right price.

No doubt there are pros and cons of NM versus northen California. But unless unusual circumstances apply, I agree with Ha that is probably doesn't make sense to carry the costs of the raw land until you are ready to move. You can always find another property if/when the time is right (preferably closer to your sister: I'm not sure how many get-together opportunities there will actually be if she lives three hours away from where you wind up).

Milton, if we do sell, we won't give it away, which I don't think you are suggesting. We need to pay off the loan amount, which means taking less than we paid, which we are prepared to do. No unrealistic expectations here.
Re: living closer to sister, yes, we've thought of that. Wouldn't want to live in Albuquerque, though.
Mango