Will this work- what would you do???

[Foodeefish]

My wife and I would like to build our retirement home in South Carolina and semi-retire. Each year we pay at least 33% in federal taxes due to AMT and were wondering if we can move south now, get jobs just for basic costs (2-$20K positions at the least) and be covered for health insurance. We live well below our means and do not "keep up with the Joneses"

Basics

- Wife 53 and I am 46 years of age
- No children and we will not be having any
- Income of $220K each year- but we work too many hours
- 401K maxed out each year- $15,500 for her and $15K for me
- 401K plans worth $700K currently- diversified portfolio w/ 10% Bonds and the rest stocks(I know some may think I should be heavier into bonds)
- IRA with $100K
- $85k in money market account
- House is paid off and is worth conservatively $650k
- Cars are both paid for
- Have 2 acres in South Carolina on a lake where retirement house will be built for $350K
- Have no debt whatsoever


Does it make sense to downsize our home by selling our existing house, build the new one down south, and get out of our high stressed jobs we have now?

Would it make sense to take out a home equity loan and begin to build the new one down south prior to selling our existing home (tax write-off or any other advantage?)

What would you do?
Thnx

Foodeefish

 

[Sam]

So you pay 70K in federal tax. You save 30K. Let's assume you have another 10K in state tax.

You annual expenses is 220 - 70 - 30 - 10 = 110K

Assuming the above number is right, I don't think it would work.

 

[cute fuzzy bunny]

About all I can offer is that I've never, ever heard of a couple building a house and not wanting to kill each other during the process and swear its the worst thing they've ever done. Couple that with retirement and moving stresses and its sounding like a bad formula...

 

[Alex]

What do you estimate your income needs to be if you make this move?

 

[LOL!]

Your wife has not maxed out her 401k. Her max is $20500 this year. Your max this year is $15,500.
On $220K income with $36000 going tax-deferred leaves you with $184k income. You have only $85K in taxable accounts, so not much taxable income from investments. Subtract on deductions and exemptions, how come you are not in the 28% tax bracket? There is no way you pay $70K in federal income tax. We have more income and pay less than $30K in federal income tax and don't pay AMT. We have kids which helps, but without kids, I can't see getting to $70K. (I know $70K was not a number from you.)

Anyways, if your expenses are $40K a year and you get $40K a year in jobs with health insurance, you might be able to do it. I would not want to myself.

 

[donheff]

About all I can offer is that I've never, ever heard of a couple building a house and not wanting to kill each other during the process and swear its the worst thing they've ever done.

Now you do. DW and I built our weekend home 14 years ago and enjoyed the whole process. No fights, no angst. It was interesting and fun. The only negative was the last couple of weeks when the builder got in financial trouble and fled to Florida. Luckily we were done except for a few punch out items. A guy nearby with the same builder was left with a foundation and un-paid subs

 

[dumpster56]

HuH/

40K in pensions no mortgage house worth 600K want to build something like 350K?

I am confused. It sure sounds like it would work. If you sold the house. Right?

I mean I am living on 50K with no mortgage and doing fine.

 

[Moemg]

I would make sure to sell the house first .My sister recently built a house in Florida and is unable to sell her house in Long Island ,Ny..Very stressful !

 

[73ss454]

I would make sure to sell the house first .My sister recently built a house in Florida and is unable to sell her house in Long Island ,Ny..Very stressful !

I sold my house on Long Island last year and also moved to Fla.

Your sister can sell her house, that's all she has to do is lower the price. I started at 725K and sold for 570K. A big hit but I wanted out. Remember, everything sells at a price.

 

[FinanceDude]

I sold my house on Long Island last year and also moved to Fla.

Your sister can sell her house, that's all she has to do is lower the price. I started at 725K and sold for 570K. A big hit but I wanted out. Remember, everything sells at a price.

Ouch......that was a hit..............

 

[kaudrey]

Originally Posted by cute fuzzy bunny
About all I can offer is that I've never, ever heard of a couple building a house and not wanting to kill each other during the process and swear its the worst thing they've ever done.

------

Now you know two. My parents did it 12 years ago, with minimal stress. They love it.

 

[Sarah in SC]

We built our house and still want to kill each other--pretty sure it was like that before we built the house, but certainly worse during construction. I'm a great general contractor, he's a fairly disgruntled subcontractor.

Sounds nice to build on the lake--Murray, Marion, or Moultrie?

Sarah

 

[kcowan]

Sure you can do it. Just be smart about it. Sell first. Do the numbers. Be the prime contractor. Rent nearby. Have penalties for not meeting schedule. Communicate!

Set your budget and get creative about making it.

 

[73ss454]

Ouch......that was a hit..............

Yeah, but what price do you put on living in Fla. and being ER'ed. Also being out of the car biz. ( you know what I mean FD)

 

[Moemg]

Yeah, but what price do you put on living in Fla. )

A very high price so you can pay your taxes and insurance if you are lucky enough to have insurance !

 

[73ss454]

A very high price so you can pay your taxes and insurance if you are lucky enough to have insurance !

Thank God I have enough.