Did you stretch your budget to buy your dream home in retirement?

[trirod]

Just looking for feedback from people who have been there and whether you ever regretted the decision? I am FI now and plan to retire within the next 18 months. I will move on retirement to an area that is a little bit more expensive than where I am now but not horrendously more. The problem is I am really getting pretty interested in some waterfront property which is way more expensive than my current house (like 3 times the price). In theory the numbers still work with such a purchase but I will have a lot less slack in my budget.

So my options are:

1) Forget about buying waterfront property and just get a nice regular house and have plenty of cushion during retirement
2) Buy my dream house but be more careful about spending and know there is always a chance I would have to go back to work if things don't go as planned
3) Work another year or so to get some more cushion and buy the dream house

Obviously this is only a decision I can make, but I was just curious if anybody out there had made a trade-off between buying a house they really loved and having more day-to-day spending available, and how that decision had worked out?

 

[dtbach]

It's an individual thing I guess. I'd rather have the money to travel than to shovel into a house.

 

[Rambler]

Ever think of buying an RV, even a small one, that you could park on a waterfront from time to time? We were thinking of a cabin by the lake, but decided that the RV (or eventually two, one large and one small) was the better way to go, for now anyway. For now we have one large motorhome, 40' diesel pusher, but it is too big for most if not all of the state parks around here. Most of the time we park it outside of the state or nat'l park at a local RV park or KOA, and go inside by car. Next year, we'll pick up a very small trailer or maybe a used small class C that will be better to use for the state and nat'l parks where we could actually park on waterfront, and keep the big boy for cross country trips. Just a thought...

 

[REWahoo]

Ever think of buying an RV, even a small one, that you could park on a waterfront from time to time?

A good suggestion if you are open to the option. We've spent 50 to 60 days per year in our RV since retiring a dozen years ago and really enjoyed it.

 

[FIREmenow]

Yep. 'cept it's not a house........

Every town we visit, we are always on the very best area of the downtown waterfront. All waterfront, all the time.....

 

[REWahoo]

It may not be a house but it IS a recreational vehicle...

 

[Aerides]

I will be sad if I don't end up waterfront (even a man made lake like we have all over FL) at some point. I don't know about 3x the current house... more like 1.5 -2.

I expect we'll do it in the next 10 years or so after we've gotten a bit more comfortable with real life working to plan, as we just ER'd a year ago.

I wouldn't want to do it with a "well I can always go back to work" idea, that's too much risk (and going back to work AFTER you've been out of the workplace for a while might be much harder than you imagine.

If not yet ER'd, if you can OMY it, great. But maybe also just keep shopping and find something in the middle rather than the top.

 

[socca]

Don't forget the overwhelming temptation to make (expensive) upgrades to your prized possession after acquiring it. I could easily drop $100k on updates to my house. Fortunately, I'm too cheap to spend this all at once - YMMV.

 

[Bamaman]

You could also change your plans to move to a waterfront property in an area where homes are not as expensive--across the board. It' doesn't have to be a $ million property or even large to be a nice place to live.

My lake house is not large, but it's sitting on a prime lot with deep rock bottom and a 6 mile sunset view. I look out my bedroom window, and all I see is water. We have 2 boats sitting inside a boathouse 27 steps from the front door. And having 2 Robert Trent Jones golf courses on my street's also nice.

 

[DrRoy]

We were always pretty modest with home purchase cost while working, but have not moved since RE. We have talked about building new at some point, but would be within 1.5-2X where we are now.

 

[RunningBum]

I went about 5X my then-current home as I approached ER, but it wasn't a stretch. I was living pretty basic, but happy, and didn't want to upgrade where I was working and then turn around and sell to move to my retirement place.


It really depends. If you'd rather stay home than travel, than making the most of your home makes a lot of sense. Every day I feel like I'm living in paradise. But if you like variety, you may regret sinking too much into one place and not having enough money to otherwise enjoy the life you want. Or you may regret working longer.


You could always downsize if things don't work out, but keep in mind that expensive vacation property probably won't do well in a poor economy. It may not do that well overall. 3-4 years after I built, I could've probably come close to doubling my money had I sold, but now I probably couldn't get much more than I have in it. I figure if SHTF, I'll survive until the recovery and then sell to fund the rest of my retirement.


As it turned out, the dotcom bust hit, and I had to keep working--I hadn't yet retired, so no big deal. But I didn't sell even when housing prices soared here. No real regrets. Sometimes I think about other places that might be better, had I sold at the top back then, but here I am, sitting on my screen porch enjoying a fabulous view over dinner. A nice life.

 

[NW-Bound]

... my options are:

1) Forget about buying waterfront property and just get a nice regular house and have plenty of cushion during retirement
2) Buy my dream house but be more careful about spending and know there is always a chance I would have to go back to work if things don't go as planned
3) Work another year or so to get some more cushion and buy the dream house

Obviously this is only a decision I can make, but I was just curious if anybody out there had made a trade-off between buying a house they really loved and having more day-to-day spending available, and how that decision had worked out?

I used to covet a waterfront home on Bainbridge Island, looking over the bay to the skyline of Seattle. Maybe I could have afforded it if I chose to work a few more years, but getting hit by an illness that could put me six feet under quickly convinced me that it was the right choice for me to quit work when I was 55, and only 6 months before that terrible diagnosis (I am cured, and have recovered).

Now, I am happy just to be alive.

Ever think of buying an RV, even a small one, that you could park on a waterfront from time to time? We were thinking of a cabin by the lake, but decided that the RV (or eventually two, one large and one small) was the better way to go, for now anyway. For now we have one large motorhome, 40' diesel pusher, but it is too big for most if not all of the state parks around here. Most of the time we park it outside of the state or nat'l park at a local RV park or KOA, and go inside by car. Next year, we'll pick up a very small trailer or maybe a used small class C that will be better to use for the state and nat'l parks where we could actually park on waterfront, and keep the big boy for cross country trips. Just a thought...

I have always thought that my midsize 25' class C towing a toad is the right choice for me. In the 2015 RV trip, we scored the best spot in Kalaloch CG in Olympic Park. We were there early in late April, so lucked out despite having no reservation. That small spot was right on the bluff looking over the ocean, and could barely fit our class C and the toad. I guess other campers were there before us, and might have to pass it up.

PS. There's nothing wrong with doing cross-country trip with the above combo. I did a 9,000-mile round trip from AZ to the Canadian Maritimes, and that distance did not include the mileage with the toad.

 

[Cobra9777]

We share a 10-acre lake with 9 other properties in a heavily wooded area in a small Texas town. We have 4500 sqft on 2.2 acres with a pool and detached living quarters for guests. It's quite peaceful and picturesque though probably not what most think of as waterfront.

We bought this place 12 years ago, which was 8 years prior to ER. It was indeed our dreamhouse. The plan was to downsize at some point after ER, but so far we have resisted and we keep sinking money and sweat equity into the place. Truth is we love it here and it's now homebase for large family gatherings with grandkids, etc.

The plan still works fine if we hang on to the place long-term, even if we start hiring out the maintenance and improvements at some point. So no, it didn't really stretch the budget to enable this, though I probably would not be so conservative about spending on travel and some other discretionary items if we had already downsized. So that's the trade-off we've made for now.

 

[Souschef]

Don't forget the overwhelming temptation to make (expensive) upgrades to your prized possession after acquiring it. I could easily drop $100k on updates to my house. Fortunately, I'm too cheap to spend this all at once - YMMV.

Amen to that!
Cabinet reface and new kitchen drawers
Plantation Shutters
Granite counter tops
Deck replacement with Trex
Replaced low end kitchen appliances with high end ones

 

[Scrapr]

Amen to that!
Cabinet reface and new kitchen drawers
Plantation Shutters
Granite counter tops
Deck replacement with Trex
Replaced low end kitchen appliances with high end ones

That sounds eerily familiar to our "To Do" list last summer

The best thing is that I love our smaller space. Really fits us well

 

[pb4uski]

One thing to ask yourself is why do you want waterfront property? If you like to boat, sail, jet-ski or whatever, then fine. We live on the water and enjoy doing all those things. OTOH, DS and BIL bought waterfront property but do none of those things... they like the view... if that is you then look at water view properties as they are less expensive than waterfront. Another good alternative is a property with water access. Some friends have a house in the woods but lake access with a dock where they can have thier boat and that works for them.

 

[racy]

There's no such thing, in my view, as a "dream house" if it threatens my financial security. Sounds more like a "Money Trap" to me. The Money Trap (1965) - IMDb

 

[FlaGator]

I made a move similar to what you are contemplating, and no regrets.

Relo'd from SoFla to NW Florida. Original expectation was to go 1:1 with what I sold and be even. Reality was different - after renting in the area, realized I wouldn't be happy in the the areas that were price-equivalent to what I sold.

Ended up spending 1.5X of my net from the SoFla house. Not on the water, but ~1 mile from the beach, and think I made the right choice. Don't have to deal with the tourists every day and less maintenance. Far better than being several miles away and having to manage through the traffic every time I leave home. Being close, it's easy to head down and walk in the surf. Do it much more often than when I was renting just 3 miles away.

The higher cost has shifted spending within budget categories (vacations to other beach town have -0- appeal), but the overall spending is within my initial planning corridor. I couldn't have gone much higher than I did and be comfortable, but am glad to have set aside my initial plans and spent more on the house.

It was a lifestyle choice for me, and sounds the same for the OP. As long as the more expensive house doesn't put critical spending at risk, go ahead.

 

[brucethebroker]

How about two places, for different times of the year, instead of one "dream house". My vote is not to shovel snow......

 

[DektolMan]

Good thread here as we are in the planning stages of selling our home and building our retirement dream home.

We are looking at 2x the cost of our current home which at times seems crazy but it will put us in a home we can age in well and in an area where family and friends are. Instead of taking SS at 70 we'll probably take it at FRA instead. Still crunching numbers.

 

[Danmar]

How about two places, for different times of the year, instead of one "dream house". My vote is not to shovel snow......

Agree with this plan. But in the end, buying more real estate in retirement will always hinge on the question of whether you can afford to reduce your income by liquidating earning assets as well as increasing your actual expenses for the nicer/bigger/additional place. The sum of these factors can often be pretty significant to a retirement financial plan.

 

[DAYDREAMER]

We thought our dream house would be a beach house. We bought on Puget Sound in a small community. After owning for 9 years, we learned something about ourselves. We learned that we preferred privacy and liked to see other sites than always being at the same place. Our place was payed for, but taxes are crazy expensive. We sold our beach place and moved back to our very private home on 3 acres. Thank god we did not sell our primary residence.

A beach house is like a boat--Happiest day is when we bought the beach house, and when we sold it.

Also, nature is pretty brutal on the structure. Lots of risks living on the water. Add global warming, and the risk increases.

 

[Red Badger]

We always owned modest homes and still do. While OMY (or more) might smooth it out, I could not trade my freedom for proprty. But, that's me.

Here's a nice, if sarcastic, view of home ownership from JLC.

Why your house is a terrible investment

 

[Walt34]

My vote is not to shovel snow......

That was my original plan but DW didn't want to move that far from family. And as we all know "...if she ain't happy, ain't nobody happy..." So while I haven't sold the snow thrower yet, the plan now is to hire a guy to do that.

At retirement we sold the paid-for house near Washington, D.C. and bought a much nicer one for about $20k less than the old one sold for. People new to the D.C. area get a serious case of sticker shock when looking at housing, less so in West Virginia.

We like it so far but when we can't drive anymore we'll have to move and that is in the plan.

 

[beachfire]

We are building our retirement house now. Hope to retire in next year, max 2. Our budget was the value of our permanent residence + a condo we own. I will say that I am very glad we undertook this project while I am still working. One it has been a great motivator to finish my career strong. Said another way, it has provided a good distraction from the daily work grind. Second we will have clarity on final cost prior to making decision on when to retire.

We have gone over budget a bit, but so far it is not something that will cause a delay in retirement timeline.