Poll: Did You Retire in your Most Expensive Home?

[Midpack]

We’re planning on relocating and buying a “forever home” that’ll cost significantly more inflation adjusted than any house we’ve ever owned, about 160% of our current homes valuation. Property taxes and general expenses will go up about the same.

I’m still having a tough time with it, especially since owning homes well below our means helped us achieve FI early. And conventional wisdom seems to be downsize and reduce housing costs in retirement, some folks even plan on cashing in some home equity to enhance their nest egg.

OTOH DW says she wants this house to be exactly what she’s always wanted (not unreasonable IMO), and the numbers say it’ll be (comfortably) within our retirement spending projections - unless returns are much worse than ever. She doesn’t worry about what we can afford, she considers that my responsibility...and I’d never mislead her.

Neither one of us wants to stay where we are or further renovate the current [-]dump[/-] house.

If you bought a second home in retirement, use total value vs prior home.

For those who traded up $ wise for your forever home/homes, any regrets?

For those with rental properties, this poll probably doesn’t apply.

 

[MichaelB]

What difference does it make if the new house is more or less expensive than your current home? What matters is affordability and how it impacts your budget.

 

[ERD50]

"OTOH DW says she wants this house to be exactly what she’s always wanted"

There's the only poll that matters.

"and the numbers say it’ll be (comfortably) within our retirement spending projections"

So why not?

I don't understand why people worry about what other people think/did?

-ERD50

 

[ElizabethT]

No regrets. Our current home, purchased six years into FIRE, was 50% more expensive than the selling price of our prior home, but it also came with a complete change in lifestyle that is hard to put a price value on. In addition to getting the coastal-close view location we'd long desired, we are able to play daily at the beach, always temperate here in S. California, and that has resulted in unexpected savings elsewhere. Our utility bills are lower due to cooler climate, as is our EQ insurance (we're now further from a major fault line), we do less fine dining in that we prefer to eat out in our lovely backyard, and less travel due to still much enjoying our new geographic location. Should any of these things change for the negative at some point, we can always sell and relocate either elsewhere, or to someplace less expensive. We won't regret our years here, regardless.

 

[pb4uski]

What difference does it make if the new house is more or less expensive than your current home? What matters is affordability and how it impacts your budget.

+1 this is all you need to know.

.....the numbers say it’ll be (comfortably) within our retirement spending projections...

not only that, while your principal reason for buying is to live there, as a byproduct it is a quasi investment and will hopefully appreciate in value.

Our current main home that we moved into 6 months before I retired... our "retirement" home.... is worth twice what we sold our former main home for 7 years ago... despite being less square footage.... but it is what we wanted where we wanted and we can afford it... so no worries.

 

[Midpack]

What difference does it make if the new house is more or less expensive than your current home? What matters is affordability and how it impacts your budget.

As you know, nest egg>35 year retirement income isn’t an exact science. “Affordability” is a set of probabilities at best. Don’t we all have a safety factor we’re comfortable with?

e.g. I’d never withdraw 4%, others do...

 

[pb4uski]

^^^ but at the same time, SWR's are pretty much based on really unlikely scenarios, so it is more likely than not that people with a 4% WR will die rich...

From the Trinity study:

For stock-dominated portfolios, withdrawal rates of 3% and 4% represent exceedingly conservative behavior. At these rates, retirees who wish to bequeath large estates to their heirs will likely be successful. Ironically, even those retirees who adopt higher withdrawal rates and who have little or no desire to leave large estates may end up doing so if they act reasonably prudent in protecting themselves from prematurely exhausting their
portfolio.

 

[Hyper]

No, not the most expensive house but it is definitely in the most expensive place we've lived so far with probably the least amount of services. That being said it is in an area for the activities we enjoy most.

FWIW: The assessor here definitely thinks it's worth way more than I do...!!!!!!!

 

[45th Birthday]

We shuffled our two previous homes into two different ones. 56% more total for the new ones including decorating and furnishing two different place. Not a big deal, still earn more than we spend even after increased expenses.

 

[MichaelB]

As you know, nest egg>35 year retirement income isn’t an exact science. “Affordability” is a set of probabilities at best. Don’t we all have a safety factor we’re comfortable with?

e.g. I’d never withdraw 4%, others do...

My post wasn't intended as a challenge. Safety is something different and very personal for each of us. Some people are comfortable standing at the very edge of the cliff while others prefer to remain a few feet back.

With this purchase are you still comfortably safe, or does that move you from "safe" to "safe-ish"? One aspect of the "perfect" house is you sleep well at night.

 

[mrfeh]

We're planning on relocating in a couple years. The plan is to have fewer square feet than we currently do.

Always thought that would mean buying a house valued less than our current one, but the housing market in our new location is expensive, and we will likely be paying more for the next house than the current one, despite the smaller size.

Won't be a great deal more expensive, and it should appreciate in value faster, so not something that bothers me all that much.

 

[Silver]

We just moved into a house on a lake in Central Florida in July. It is only 0.5 miles from our previous home we had lived in for 10+ years, and in the same 55+ golf community. But...the lake view is fabulous with a huge covered lanai and lovely gardens, and that's what we both wanted. It's about 200 sq ft larger(1950 sf total), is a more recent build, and was indeed much more expensive than our previous home, and the most expensive home we've owned. We feel very lucky to not need a mortgage, and didn't need to touch any of our investments.

No regrets, but moving has been a lot of work. We're just now starting to feel settled in.

 

[Midpack]

I don't understand why people worry about what other people think/did?

Because other people might have insights from experience that others haven’t had yet. Isn’t learning from each other what this and most forums are for primarily?

If it doesn’t float your boat, no worries. It would be impossible for every thread and post to appeal to every reader.

 

[Midpack]

No regrets. Our current home, purchased six years into FIRE, was 50% more expensive than the selling price of our prior home, but it also came with a complete change in lifestyle that is hard to put a price value on. In addition to getting the coastal-close view location we'd long desired, we are able to play daily at the beach, always temperate here in S. California, and that has resulted in unexpected savings elsewhere. Our utility bills are lower due to cooler climate, as is our EQ insurance (we're now further from a major fault line), we do less fine dining in that we prefer to eat out in our lovely backyard, and less travel due to still much enjoying our new geographic location. Should any of these things change for the negative at some point, we can always sell and relocate either elsewhere, or to someplace less expensive. We won't regret our years here, regardless.

Lovely post, thanks!

 

[SomedaySoon]

Sold our home in an expensive NYC suburb for a similar sized home in Eastern PA. The original house was old, 3 levels, high property tax, etc. The new house is brand new with customizations the DW wanted, on one level, energy efficient, and lower costs overall. It's in a 55+ SFH condo community so there is no more mowing, raking, or shoveling. Even cleared a pretty penny on the old house to add to our savings.

 

[Fedup]

No, not the most expensive home. It’s nice and sort of luxury but not the most luxury. Our area is like living in a resort in Hawaii. But the property tax is the highest we pay.

 

[Alan]

We moved into our "forever" home 20 months ago and it is not the most expensive house we've bought but is much larger than we really need. We bought it for several reasons including location and the fact it gives us plenty of space, especially when we have family or friends staying.

 

[imoldernu]

For the first 15 years of our retirement (1989-2004) we lived 6 months in our Woodhaven Campground, in Illinois, and six months in our Lake Griffin Harbor 55+ Community in Leesburg FL.
In 2004, we bought into our CCRC, Liberty Village in Peru, Il. At that time, our home cost $140K... Now valued @ $180K. It's where we live today, 'til it's time for us to move into the apartments.

But... on a totally different note, we bought our first home in Falmouth, Mass. 78 Oakwood Ave, in 1966. That cost $12,500 plus $1,500 for renovations. Looking that up on Zillow... the same house, today... $527K. Zillow shows it as being built in 1982, but the real date was 1940.... I looked it up on Street Scene, and for sure, it's the same house. Go figure... Same increase for all of the rest of the houses on that street.

https://www.zillow.com/homedetails/78-Oakwood-Ave-Falmouth-MA-02540/55892680_zpid/

 

[Another Reader]

At the time 30 years ago, this seemed like a very expensive home. What made the purchase possible on the household income was the appreciation of the prior home. The mortgage made everyone nervous, although the interest rate was much lower than on the prior home. Now you can't buy a studio condo in the worst part of town for the purchase price.

A smaller and newer house in a less crowded but more attractive area is certainly appealing. This house is now of an age where maintenance and repairs are constant worries. However, the tax consequences of selling this house would be very costly. Buying down and renting out this house remains on the table.

 

[HFWR]

The only house so far...

To paraphrase Jerry Reed: I’ve got a house that’s mine alone, that me and the finance company own...

 

[Andre1969]

I'm not retired yet, but I just settled on my "forever, or at least for a long damn time!" home on September 7. I plan on retiring in about 2 1/2 years. And, it's by far, the most expensive home I've ever owned.


However, I've only owned two homes before. The first was a condo I paid $84K for in late 1994. In late 2003, my grandmother put my name (and my uncle's) on the title of a second home she owned. She's since passed away, so now I'm a 1/2 owner.



Adjusting for inflation, what I paid for that condo would be around $142K today (I sold in for $185K in 2004, and it resold for $245K in 2007, and again for $190K in early 2017.


As for the house that I co-own with my uncle, I'd take a wild guess and say $250-300K is what it's worth, mainly because of the land.


The house I just bought was $630K. It's a 4br/2.5ba 2-story. About 2440 square feet, plus another 432 for an 18x24 sunroom that the real estate listing counted as living space (it has electric outlets, a window a/c unit, and electric baseboard heat, and an insulated ceiling, but just storm windows all around, so it would be expensive to keep heated in the winter). Also has a 960 square foot basement. Plus a carport closed in on three sides, with a workshop, and two other outbuildings. 6.5 acres, on a fairly quiet back road. And an in-ground pool. Only thing I'm going to need to do is build a new garage for my antique cars. It's also ideally situated, in my opinion at least, where it looks all country, but not far from DC, Baltimore, or Annapolis.


Now, as I get older, I could see the house becoming a bit much to keep up. But, I figure that as long as I can afford it, I could always pay someone to cut the grass, and maintain the pool. It also has the master bedroom with full bath on the main level, so if stairs ever became a problem, that solves that. But, I can't see myself wanting to leave this house, in the forseeable future.


Maybe if the neighborhood went downhill? But, everybody's on well and septic out here, and no public transportation to speak of. Hate to sound elitist, but that tends to keep out the high-density housing, Section 8, and so forth. Also keeps the property taxes down.


But, I couldn't see myself wanting to get out of this house, any time in the near term future. And if I did, I don't know if it would be into anything bigger/more expensive.

 

[brett]

We rented for four years. Then purchased another home. It is just a home, might not be our last one. We did not have a notion to have a retirement dream home. We wanted one with low maintenance and one that would allow us to lock and go. Slightly less expensive than the one we sold five years ago but it could just as easily been more expensive.

 

[Teacher Terry]

We moved into town 6 years ago and downsized to 1 level 1400 sq ft. We completely remodeled it inside and out to exactly what we wanted. It was not expensive. Now it’s very expensive as the neighborhood is hot and the housing market tight. Young people want to be walking distance to downtown and retirees are also moving in.

 

[Bestwifeever]

Since retiring we have put more than $150K into our little house, which probably increased its value by $0 ��. It’s what we want, and our walkable town has turned into a showcase in the 40 years we’ve lived in this house. We never cared what most people do. Life is getting shorter, do what makes you happy (obviously your happiness is tempered by cost, but you probably can comfortably afford your new house). I hope you are joking that your current house is a dump.

 

[Ian S]

We plan to move next year into a "forever" home. We're looking for something similar in size to where we are now but will be in an area with better climate and a more small town feel. Less pollution too. We expect to pay 30-50% more than what we get out of our existing home. However, our existing home needs extensive updating probably to the tune of $100K or more and the place we expect to move to will not need that. So the actual differential is not as great.