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

Didn't realize so many people had a desire to build a "retirement dream home"...after retiring or near it.

I just figured you built that dream home during your earning years and when you retired.....you just plain enjoy it.

Living in a crappy climate like Ohio, made us want a winter home/condo. This is the route we took. Now if we lived in a more moderate climate, I could see forgoing the winter condo and building a dream home.
 
We built our dream home on the beach 17 years ago, so I can't say it had anything to do with retirement planning. But I always wanted to live on the ocean, and it was a major stretch back then to spend $1M to build an ocean front home.

17 years later, I still can't imagine wanting to live anywhere else. I'm sure it's not for everyone, but for us, seeing the waves crashing on the sand whenever we look out, taking daily walks along the beach, and living in the moderate temperatures that ocean front living provides makes every day priceless. We have no regrets and no plans to move.

And we paid off the mortgage years ago, so one less thing to worry about in planning for retirement.
 
No we actually downsized to a more modest home upon retiring. I wanted less home to clean, etc. I would not stretch my budget for a house. Now I know how nice it is to live on water because my parents had a summer resort on a lake that I spent 14 years at. But I want to travel, eat out, go to plays, etc so not worth it to me.
 
We haven't but we fully expect to spend much more than [-]we'd[/-] I'd like, and approaching double the value of our current house. But we own a house and a boat, so hopefully we'll sell the boat around the same time and out-of-pocket will be offset somewhat. It's not the higher home purchase price that bothers me anyway, it's the higher prop taxes, insurance, etc. for 30-40 years that'll nag at me. But the next house will be the last if all goes according to plan...
 
No. Sold our home, downsized. Traveled, rented for four plus years, then finally found a home to buy that suited us. It cost less than the proceeds of our previous home. This was not intentional-it was based on our choice of home not on any financial considerations.

We were advised by someone at our bank that most retirees who downsize actually spend more on their retirement home. We don't really know.

The bigger issue for us was a smaller home, less tax, less utities, less mtce, and a HOA that would make it easier for us to lock during extended travel periods.
 
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trirod said:
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?
Click to expand...

Have you actually run the numbers on the three options? No need to share here, but without numbers, you could be guessing instead of making a decision.

Our example: We fell in love with the ocean and the mountains on vacations (from the midwest, it figures, right?) The place we found which had both (not to mention near perfect weather) was quite high COL area. So we bought our "dream" retirement place mid c*reer. To preserve our spot in Paradise, we rented the place full time until FIRE. Best guess is that our dream place cost 4X our then current home. We ran the numbers and figured we could swing it. It turned out fine some 20+ years later. I don't recommend this, but it did work for us.

The rest of the story is that we eventually moved in and DW decided she couldn't live in the rain band we were in. My only prerequisite as we looked for another place - it must have a killer view of the Pacific. We both got our wish when we moved to the leeward side of the island.

Run the numbers and decide is my suggestion. YMMV
 
If most people end up spending more on their retirement home I am wondering if they get carried away and buy all new furniture, decorations, etc instead of taking what they have with them.
 
Teacher Terry said:
If most people end up spending more on their retirement home I am wondering if they get carried away and buy all new furniture, decorations, etc instead of taking what they have with them.
Click to expand...

I did, and probably a lot do, but I wouldn't be judgmental and call it getting "carried away". Much of my post-divorce stuff was cheap and not worth moving, like my dining table. I put my old living room furniture in the finished basement family room. My bedroom furniture went in the new guest room. I don't have much for decorations, my outdoor view provides for that. The stuff I bought is of better quality and should last much longer. I factored in the cost of replacing furniture and adding to new rooms as part of the decision to upgrade.
 
We aren't retiring for quite a while yet, but are already discussing whether to trade in the yard work for a condo that we can lock and leave when we travel. The hope would be that the condo would be a swap for what we get for the house. Maybe even a little less.
 
RB: of course if you didn't have high quality furniture it would make sense. I was talking about people that owned nice stuff and then replaced everything.
 
Quite a mix of opinions, as I would have expected! I did run the numbers, and it looks like we can swing it, but just leaves a lot less cushion for unexpected expenses or maybe for those special treats in life. I would hate to be in a position where a major expense might stress me out (even if I budgeted for it and know I can really afford it). But on the other hand, waking up in the morning and seeing Lake Michigan waves crash on my private beach would be pretty amazing.

We did put an offer in on a beachfront house over the weekend, but it went for $50k over the asking price (we offered $30k over since it was priced well under market). Now I'm not sure if we're relieved or sad!
 
Good. Now, you can use the money for a lesser home AND an RV to travel. :)
 
If those are your only options:

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
Click to expand...

I think that I would pick #3 if owning that dream house would really improve my quality of life. But personally, I chose #1 for myself. I like walking around nicer neighborhoods and looking at "dream houses", but I am also happy to let others carry the burden of maintaining those properties.

I think that option #2 is probably the least desirable. Not only would purchasing your dream home deplete part of your portfolio (hence reduce the amount available for spending), but it might also add additional strain on your budget (in the form of higher carrying costs perhaps), which might give you less flexibility to cut expenses during a downturn.
 
trirod said:
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

Nope, not there yet but would have to eliminate #2. Stressing about money after retirement for me would be a nightmare not a dream. So, I would would probably choose #1, but if I "had to have it" I would go with #3. The time before retirement are peak earning years, at least for me. I would probably have to work three years down the road to make what I make in one year now. Plus the money I put aside now is growing . . .
Click to expand...
 
As far as the money part goes, gotta figure the dollars, but we have another alternative that's a low cost waterfront 2nd place to go.
While we still have our mfg home in Lake Griffin Harbor in FL, typical cost for a similar home about $25-30K, plus rent. That community is in an over 55 community. To far to go now, so we're selling it.

But... we'll keep our lakefront Park Model on Bass Lake in Woodhaven Lakes in Sublette Il, 25 miles from our home in Peru IL. Max cost for properties like mine is about 80K, but lakefront still available w/home for about $35K or less. 35 minute drive. Annual WH membership... all facilities $1200 including 7 lake access, 2 olympic size pools and about 20 playgrounds plus almost every normal "city" facility of a small town. Taxes $500, Insurance $500. Total annual cost to maintain, about $2500.

Places like this in many states.
 

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We bought a fair amount of new furniture. We were due prior to retirement so it was not worth storing a great deal of it when we downsized and traveled. DW liked this part.
 
I'm going to be downsizing and moving to a state that is more friendly to retirees, I've narrowed it down to FL, GA and NV. The state I'm in now tax's pensions and SS
 
Hard to beat the economics of NV. Low RE prices, no income tax, low property taxes. Climate is very different than GA or FL. The gaming industry is everywhere in the Vegas metro area.
 
Scuba said:
Hard to beat the economics of NV. Low RE prices, no income tax, low property taxes. Climate is very different than GA or FL. The gaming industry is everywhere in the Vegas metro area.
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NV, would be a good choice as I don't like to gamble and I do like the climate.
 
trirod said:
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?
Click to expand...

I bought my dream house in retirement, but I didn't stretch my budget to do it. During my first 7 years of retirement for some reason I wasn't spending as much as I had thought I would when I was planning retirement. First I was withdrawing 2%, and then I started getting SS and was withdrawing 1% which is pretty silly. You can't take it with you.

Anyway, after years of that, I had accumulated enough unspent money to more than provide the extra cash needed to buy my dream house and move. A few years after that, there it was... the perfect house came on the market, I jumped on it and now I am living in my dream home, without having to cut back.

So, I guess that might be another option for some (not all) people, depending on your situation.

4) Retire, and adjust to retirement for a few years while saving up the extra money needed for that cushion to buy your dream home.
 
imoldernu said:
As far as the money part goes, gotta figure the dollars, but we have another alternative that's a low cost waterfront 2nd place to go.
While we still have our mfg home in Lake Griffin Harbor in FL, typical cost for a similar home about $25-30K, plus rent. That community is in an over 55 community. To far to go now, so we're selling it.

But... we'll keep our lakefront Park Model on Bass Lake in Woodhaven Lakes in Sublette Il, 25 miles from our home in Peru IL. Max cost for properties like mine is about 80K, but lakefront still available w/home for about $35K or less. 35 minute drive. Annual WH membership... all facilities $1200 including 7 lake access, 2 olympic size pools and about 20 playgrounds plus almost every normal "city" facility of a small town. Taxes $500, Insurance $500. Total annual cost to maintain, about $2500.

Places like this in many states.
Click to expand...

This looks like an amazing bargain for all you get!
 
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