What is enough

Not to hijack the thread, but why stop now?

HOA history is in fact quite interesting. The concept was originally crafted by builders who wanted the condition of sold properties to maintain a level of quality while they finished and sold the remainder of their new construction. Wouldnt do to try to sell brand spanking new homes with the customers driving by yards full of dead cars, 20 year old screen rooms in the driveway, and other sundry ugliness.

Only problem is they were intended to dissolve with the departure of the contractor. However they were taken up and persisted for the "greater good of the community".

Having lived in many and observed others, the people who take up running these boards seem to fall into a narrow set of categories. Busybodies, politician wannabees, an occasional do-gooder, and in the case of retirement communities like my dads, people who used to be in senior corporate management positions or politicians who miss "swinging the hammer".

Homeowners associations are one of the largest lobbies in D.C.; you may notice a portion of your HOA dues going to insurance, master associations, property management, etc...some portion of some or all of those buckets flows upwards to fund lobbying and law creation that protects and supports HOA's. At the federal and state level, quite a bit of legislation has been enacted to make it very hard and very expensive to combat a hostile HOA. The only two times I've seen someone get the upper hand is when the family had a lot of money and garnered embarrassing national press attention, and the couple who were both lawyers who took on the fight as a nearly full time job.

You can throw out the board and replace them, but you have to find someone willing to do the job that isnt as big a potential problem. As with politics, anyone who would do a good job with the community in mind wouldnt ever run for the job. In my dads case, most of the less well to do people are in their 80's, and arent really interested or able to put the time and energy into it. My dad has thought about doing it, but he's golfed with some of the current board members and says he wants to stuff them into the hole by the 5th flag. Working with (or more likely against) them full time might be more than he could stand...

I guess the message here is be verry careful when choosing your ER destination home. HOA's and condo associations can throw a big wrench into your plans with unexpected fees and rules and regs.
 
I guess the message here is be verry careful when choosing your ER destination home.  HOA's and condo associations can throw a big wrench into your plans with unexpected fees and rules and regs.

TH, I feel sorry for yoiur Dad! I hope he finds some OK solution.

Very intersesting historical summary. This was all unknown to me.

I guess Condo Associations and Co-op Boards are mostly cut from the same cloth? Often the people would still be working, and thus wouldn't have as much time to try to ruin one's life. But still, all one needs to do is look at church governing committees to see that it isn't just retired people who enjoy small guage despotism.

I guess for me it had better be either house w/o HOA, or apartment. At least the apartment management has the discipline of keeping the place full.

Mikey
 
Well, I'll throw my thoughts into this one. I was away on fishing trip and I was drafted into our very small (14 units) HOA Board. They figured I had a lot of time because I was retired.

I will give you the other side of the coin. It is a lot like a microcosim of our Federal Government. Most of the folks will not educate themselves enough to know what is going on. All they know is that our Homeowners Fees are too high. When you show them our Budget, their eyes glaze over and shortly they are involved with a conversation with their neighbors.

There are only 2 units that continually complain about monthly fees and These are the very same individuals that demand the most services.

At the present we are not building a reserve up to pay for expenses down the road, like new roofs and outside painting and driveways. The real 'Old' folks would like to pass these costs onto the 'next generation owners and reduce our monthly fees (taxes) today.

Now if this sounds familar. Cut Taxes, increase spending and pass the problem onto the next generation. It's because it is exactly what the federal government is doing. The Feds of course are borrowing money to keep this sham affloat.

This is called Human Nature and reminds me of the guys at the bar that are convinced that we can solve all of the Federal Budget woes by eliminating welfare. Most of them do not have time or interest to look at a simple townhouse Assoc. Budget. But Oh can they Complain!!
 
At least he can afford the increases. He was a classic Prodigious Accumulator Of Wealth: compulsive saver (big box o' EE bonds, all paying good interest rates, no stocks after buying some in '65 and riding the market down and sideways for 10+ years).

A lot of his friends and neighbors cant afford it. One neighbor in her 80's has had to cut back on her golfing (making other excuses as to why she isnt playing as much) and has begun conspicuously carrying a cheese sandwich with her when she does play, as she cant afford to buy a lunch at the course. Not the way I hope my older years run. A lot more are sitting at home wringing their hands over the prospects of having to move from a home they expected to live in for the rest of their days. Squeezed on one side by monthly fees that have doubled and will likely double again, and on the other side by higher property taxes on any new homes they'd acquire. Perhaps being forced into a rental or to live with their families and lose their independence.

I guess there are more messages. Emotional consumptive disorders affect more than the people that are afflicted with them. In this case an HOA and monthly fees, in others, governments and taxes. Communities need to plan for at least 80-90% of their consituencies, not just the wealthier and more influential and let the rest 'eat cake'.

Someone needs to write a "millionaire country/state/city/community next door" book and send it around...
 
This is for Bob_Smith. On May 4 he opined
that he still liked me even when he didn't agree with my
"strong opinions". Nice compliment, especially since
so many of my opinions are of the "strong" variety.
It is not so effective with some (ex. wife for example),
but some people like it I guess. At least I'm not
boring :)

Re. HOAs, I have not had much direct experience, but I will now having just bought a condo. Have not been to a meeting as yet and only met one other owner so far.
The monthly fee seemed quite high in relation to the number of units and value of the condos. However,
the common areas look pretty good and the rules and regs do not seem all that draconian. If I kept it rented full time (not my intent) it would cash out okay with the
current HOA dues included. My report at this early stage would be "so far so good".

John Galt
 
What is this? John Galt, rugged individualist, has left the ranch, bought a condo, and is happy with his home owner's association? No references to Big Brother, even?

Is nothing constant in this world?
 
First, no nothing is constant! Secondly, I have to
live in the world and so I need to accept some
of the same things others take for granted. It's
either that or go find a cave or an island. This would
have appeal accept I'm too old now. Finally, Big Brother
is coming. Only the timing is uncertain. I have never
been more certain of anything in my life.

John Galt
 
TH's story makes me wonder about all our assumptions about spending in our later years. Going into ER means making assumptions about inflation and spending for the next 50 years or more. Do we have enough of a cushion in our numbers to take a random doubling of homeownwers fees every now and then when we're in our 80s? I wonder how others look at their long run spending with so many unknowns or uncontrollables out there. If you are at a 4% swr, you don't have a lot of room to manouver if something like this goes rocketing up... Should we really be building our budgets around something lower just in case stuff like this comes up in the years ahead?
 
Good point ESRBob! But these things (trying to plan 50 years in advance) are of no concern to me.
First, I will not be here in 50 years. Secondly,
when you get way out there too many variables
can screw up your best laid plans. Third, if I do
live into ripe old age, I can see some of my
non-fixed expenses dropping way off; travel and hobbies, etc. Plus there is always the possibility of an inheritance. The HOA jacking up my fees is not on my
list of worries.

John Galt
 
Do we have enough of a cushion in our numbers to take a random doubling of homeownwers fees every now and then when we're in our 80s? I wonder how others look at their long run spending with so many unknowns or uncontrollables out there.

Actually Assoc. Fees are easier to budget for, than what I just shelled out this morning. I had a dental implant and this mornings fees came to $2,853. We have dental Insurance, but this is considered a 'luxury' item and is not insured at all. Next year, I'll get the top put in for another $1200.

My Assoc Fees are set to rise with inflation, are currently $3600 per year (cheaper than 1 Dental Implant).

Everyone should have some slop in their budget to allow for some unexpected expenses. I also budget heavily for Travel, Eating Out and other Items that could be cut, if need be.
 
ESRBob -

This is why I avoid "uncontrollable" expenses (yes JG, I know...nothing is really and truly in our control, but we can certainly exert some influence) and pad the heck out of my budget. I think some folks forecast a pretty optimistic budget and hope for the best.

When I budgeted for my needs, I went forward 40 years, forecasting yearly requirements, but also things needed every 10 years or so (like cars some furniture and some major appliances) and 20 years (like water heaters, the rest of the furniture, and a/c compressors), then instead of lumping those as costs spent in those future years, I determined their net present value and that gets set aside as part of my annual "withdrawal" which is actually never spent until needed. Sort of a christmas savings fund.

I also pad every significant budget item by 30%. Just in case.

My core spending - remembering that I have no debt of any kind - is about $16k. Thats got some room to cut, but I live a very nice middle class life on that. In addition, about 8k per year is "stuff", entirely discretionary. About 6k a year is set aside for the "future expenditures" fund for surprises and expected periodic major spend.

But one year into this new place and I've got an extra $400/year assessment...county well water went bad and the hookup to city water gets paid by residents on a 20 year bond.

Then theres the @$^%#^$#$ ticket I got yesterday for running a yellow light. $271. Tried to talk myself out of it but wasnt helped by my dog Ted trying to eat the nice policeman while I was talking to him. @!#^%#^#$&^@%$&^%@&$%&@^$%&#^%@$&!!!!!

Now, if "real" inflation outpaces the CPI by 30% or more, or we get more funny surprises like ALL my bills creeping up due to one disaster or another, then things might get a little tight. Meat, milk and gasoline have certainly spiked, and electricity here in CA is quite a bit more expensive than it was a few years ago...so its possible...
 
I run "back of the envelope" budgets all the time.
Must confess that I do very little "padding" although
I certainly see the logic in that. But, I do have some
fat in my actual expenses and could cut back if necessary. Also, if I live long enough, future events
MAY bail me out. My net worth has dipped a bit over the
past year, which is worrisome. Was the decline avoidable? Mostly not. However, future plans count
on at least maintaining my current net worth, so
further decline would need to be dealt with
aggressively.

John Galt
 
At the tender young age of 60 with almost eleven years of ER, we're thinking about a new plan for how much is enough - it's what you got:

Retro city: spend div/interest and reinvest cap gains. The distance between that and 4% SWR is the reserve - which will accumulate if not spent year by year. When draw on engineering graph paper in looks 'pretty' as the area under the curve.
 
Hey unclemick.............Re. "How much is enough....
it's what you got!" I like it :)

John Galt
 
TH's story makes me wonder about all our assumptions about spending in our later years.  Going into ER means making assumptions about inflation and spending for the next 50 years or more.  Do we have enough of a cushion in our numbers to take a random doubling of homeownwers fees every now and then when we're in our 80s?  I wonder how others look at their long run spending with so many unknowns or uncontrollables out there.  If you are at a 4% swr, you don't have a lot of room to manouver if something like this goes rocketing up...  Should we really be building our budgets around something lower just in case stuff like this comes up in the years ahead?
Great! Just as I was beginning to get comfortable that I would outlast my money (from another post) someone else comes along and echoes my underlying worry. Ah well, perhaps it depends on whether you are a defined benefit pensioner with a built in COLA as in an ex-public sector employee, or relying on your own retirement accounts, as in a 401k retiree, then factor in whether you are in a single family home w/o HOA in prop 13 state or living with HOA in a state where prop taxes can drastically rise. IMHO
 
OR - after a decade or so of worrying in ER - we could bestoe you with an honorary 'curmudgeonette' degree. Almost as good as a Masters in dryer sheet recyling.
 
Great! Just as I was beginning to get comfortable that I would outlast my money (from another post) someone else comes along and echoes my underlying worry.
Your reasoning in another thread is that you like to travel and dine a lot and expect to do more as you get older. Think of it this way: If you're healthy enough to be active and travel, you'll be healthy enough to take a job if the worst happens. Heck, get a job as a travel agent with all your experience. If for whatever reason you travel less you won't need to spend as much and will have enough.

See? You got it made.
 
I stand by my observation that you perhaps enjoy worrying?!  Look on the bright side the world could blow up tomorrow and you'll have more money than you'll ever need. :D
Should'a stuck a wink in there. :p Nope you convinced me .. gotta get out of this saving habit. Calling for estimates on new carpeting tomorrow as it is 20 yrs old & I'm one of the lucky ones... I have a built in cola  :D

I hate to get personal, but am I the only one who wonders about this when they first retire?

If you're healthy enough to be active and travel, you'll be healthy enough to take a job if the worst happens.
Being retired can be addictive in the best way::) I'm still getting my new mindset but I'll avoid returning to work even if it means doing a negative equity on property. Besides as previously pointed out, early SSA is only 9 yrs away -- full SSA 14 yrs away. I'll make it ... on to reinventing myself
 
I hate to get personal, but am I the only one who wonders about this when they first retire?

No, I think it's perfectly normal.  I also think it's good to have a budget with plenty of fluff in it. Plenty of Travel, eating out etc. etc. That way, if the budget needs to be tightened you'll have something to cut.

If your budget is so lean that there is nothing to cut, I would tend to be more worried. ;)
 
I agree with Cut_throat, i.e. perfectly normal to worry.
I have found that I worry less and less as time passes.
The proximity to SS benefits has a lot to do with this,
in my case. I can't imagine going back to work, other
than ramping up my small holding co. a bit.

John Galt
 
Goin into retirement is a little scary. But I'm going to try to be a little bit like Alfred E. Newman

What? me worry?

I think smart people think to much. They consider all the possiblities, scenarios that could play out, the worst case scenarios etc. to the point they can't sleep at nite. I, know cause I've done it. But the time to do some of this is well before retirement to make sure you can make it ok. Then once you've made the decision to FIRE you must become Alfred E. Newman.

I wonder what personality type Alfred is.
 
You always need SOMETHING to cut back on in tough times. If you don't have that you're probably not having any fun.

Remember this, "When the going gets tough; the tough cut back on the wife's beer." ;)


BUM
 
So is anyone else laddering into drawing from retirement funds? Before you jump down my throat, I am drawing on my DBP plan now, have a 457 and IRA in reserve, as well as SSA in 9 yrs. Will take from 457 in 3 yrs, add in IRA in 6, then early SSA in 9. My only other option is to fully investigate this SWA thing and that seems like work.

bobbee25, you could ostensibly do the same thing to increase your comfort level with your pension, 401K, IRA, and Social Securty. Makes sense to me but I'm a newbie here
 
Laddering into retirement - !thru a brilliantly executed well calculated plan! - heh heh not exactly. But with the benefit of 20-20 hindsight that's kinda what happened.

Consumed severance pay, saved cash, one year temp job for big $, cap gain I couldn't refuse (divorce sale of owner financed duplex), small defined pension at 55.

Except for pension at 55, a lot of things that weren't on my radar screen. Also practiced a 'barbell' strategy - core budget frugal plus splurges when the mood to travel, etc. Went 49-60 before you knew it and have the fun of figuring how to spend SS when it arrives. The only minor blips were a tornado in 95 which tore off the roof and we lived with friends for six weeks while I rebuilt the entire interior and rebuilt parts of the house due to Hurricanes in 98 and 02. And haven't really touched our IRA's yet. ? planned ladders and ? unplanned ladders - they both seem to work.
 
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