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Bottom line is - I am not even sure what we can afford. I'm thinking that we should take an annuity with his retirement plan because he's the type that will spend it if he has it. The more you give him - the more high maintenance he becomes .
Annuity might be OK, depending on your husband's actual retirement age. There are also tax considerations on any payout. I'm a great believer in not paying income tax on retirement fund withdrawals or, if you can't do that, at the very least, minimizing them. That alone should put a lid on hubby's propensity to spend. You'll be looking at 25%+ in federal taxes at least on all withdrawals unless you do some serious tax planning. That alone would stop me in my tracks. I never withdraw a dime from my retirement funds without calculating the tax ramifications. It's amazing how creative you can get when you face that reality.
Last edited by Ariadne22; 05-12-2011 at 03:16 PM..
OK! Your budget most Americans could live with. Thanks for the input. I'm finding everyone's estimate on food to be low. Are you all survivng on mac and cheese?
I agree this is low:
Gas/Grocery/Goodies ............... 5,200 433
Even for one person.
This too:
NE in the winter $6.50 minimum charge 0 kw.
summer $40.00
SO in the winter $60.00 heath pump with wood stove supplemental
I live in the south - and you cannot leave the A/C off all summer in the south unless you are a big fan of mold and mildew. And as I understand it - up north - don't you have to keep a house at a minimum temp to prevent pipes from bursting?
One issue no one has addressed directly is the possible need for 2 cars. We had one car when we were working (we worked in adjacent buildings). But needed a second when we stopped working - because each of us had different interests. For example - there were many days when my husband would head to the gym in the morning - and I would head off in the other direction to play tennis. About 2 years ago - we got rid of our second car (since we were only putting < 3000 miles a year on it). Figured it made more sense to call a cab - or juggle our schedules than to pay for the second car (which cost us at least $2k a year without taking depreciation/replacement into account).
BTW - you mentioned that you thought we spent a lot of money - but over 1/3 of the people who answered the poll above think they'll need more than $75k a year in retirement. Robyn
Well thanks guys. I didn't put that to get kudos....but you are boosting my spirits about things. The real issue is that my husband had a heart attack a few months ago and quadruple bypass surgery. The stress of living in the No. VA area is a lot for him and we are not exactly sure if he'll be able to go back to work full time or if he should retire early or what.... So - he wants to go to Vermont where we have land, just not a house. What stops us from buying a pre-existing home (some of them are really nice and we could essentially almost buy one outright) are the energy issues. It can be very expensive to heat up there during the winter....we'd like to have a very energy efficient home and basically be hooked up to the grid but live off the grid and sell any excess back to the power company.... However - it will cost us more $$ to build energy efficient than to buy outright.... The last thing that I want is a mortgage.....even if it is small....
So, I guess I'm feeling rather unprepared about things because I'd like this to happen for him in the next one to two years.
Although I don't want to get into a lot of details - I can tell you that building a house is VERY stressful. We built ours when we had no health problems. We had plenty of money (sold our place in Miami before we moved and started to look for lots) - enough for our "budget" and the inevitable it always costs 25% more. We had a good builder. And were building during good but neither bust nor boom economic times. In an area where you can build 12 months a year. And there were still days where we would tear our hair out - and wind up screaming at our builder and/or our architect and/or each other.
Also - I would consider the opportunities for regular exercise - if only walking - in a cold climate like Vermont (reckon your husband's docs have recommended something like that for him). And the state of the job market is important too (I know zero about the job market in Vermont - I know our job market here is not that great).
I think both of you have just gone through a pretty major health shock. And I'd probably take my time before deciding to make a major change in my life if I were in your shoes. Good luck! Robyn
We heat our 2400sq ft house using 3 to 4 cords of wood per year. Depending on where you get your firewood from a cord goes from $100 - $250 each...
We bought bare land in 2005, and began building....
So far our experience has been that building a house can be much lower priced than buying a house.
Mortgage free here
I realize these will sound like dumb questions to you (but remember - I'm in Florida ). Where do you burn the wood - and what do you do with the ashes? Where do you store the wood - and how does it get into the thing that burns it? How does the heat that the wood burning generates circulate around the house? Are there places that restrict wood burning heat due to air pollution problems (I know there are quite a few places in the US where you're not allowed to build wood burning fireplaces these days).
I don't know about building being much cheaper than buying. But you can get exactly what you want. Spend money on the things that matter to you and not spend money on the things you don't care about. For example - the norm where we live (at least in 1995) was houses with big family rooms and silly little living rooms that no one ever uses. We got rid of the silly little living room - and built space we knew we'd use. In fact - we use almost 100% of our house every day (even the guest room - my refuge when my husband starts to snore ).
We don't have a mortgage either. But with interest rates being so low these days - a mortgage is not something I would automatically rule out for everyone (e.g., for some people - it may make more sense to take out a manageable mortgage than to pay for a house with money from a retirement account). Robyn
Keep in mind there is a snow-belt. It blows from the Great Lakes regions dumping huge amounts of snow starting in Chicago, through Buffalo, Syracuse, NYC, Hartford, Boston.
However you can side-step it and avoid most of those huge dumps of snow.
It is possible that Vt is South enough that it still gets a good portion of that effect...
We began planning our retirement home 14 years before I became eligible for my pension.
Every year I would clear off our kitchen table and bring out our drawings. It became a big ritual for us. My career moved us around a lot and it gave us a continuity.
In our research we found that steel buildings [think warehouse] are much lower priced [per square foot] as compared to wood-stick or modular.
No interior walls, just a blank slate really where you can put anything anywhere inside.
I hired the well dug, the foundation poured, and a crane operator for 3-hours to help me stand-up the girders. Otherwise I have done the rest by myself.
We have large panoramic windows on three sides of our house, living surrounded by forest, it gives us the surrounding view of being in a forest. Our house over-looks water.
Our walls are finished with light wood-grain paneling and dark wood trim, black wrought iron accents.
We have a large sunken living room in the center of our house. Four built-in bench-couches facing the center, with steps leading down in each corner, and an open-hearth fire-pit in the center and a suspended exhaust hood over it. The bench seats and backs are heated as a part of the radiant heating system, as is the floor of the living room.
All of our floors are radiant heated. It is nice to walk on a warm floor.
We have a large fire-stove with a ceiling fan directly over it. The ceiling fan really throws the heat out very efficiently. That wood-stove heats our water, which is then circulated through our floors, etc.
I assume a fair amount of Vermont gets at least a fair amount of snow - since it has "destination" ski areas (like Stowe). My husband and I both spent parts of our lives in various parts of the "snow belt" - Buffalo and Cooperstown and Finger Lakes in NY - Boston. I think we would have enjoyed those years a little more if we had swell zippy clothing like the stuff you can buy now (instead of all that itchy wet wool). It used to snow a lot when we lived there. Then there a couple of decades when it didn't snow so much. But the snow seems to have come back (at least in recent years).
How do you insulate a steel frame building? What kind of roof do you have? Living in a state with a harsh climate (Florida) - I've developed an interest in architecture and appropriate building techniques for different climates and geographical areas. I know lots about building in Florida - but relatively little about other areas (other than the last thing you want in Florida is a house designed for California climates and earthquakes). I always shake my head when people move here and want to build something like they had "back home" - when it makes absolutely zero sense here. Robyn
HappyTexan - that is a good thought and something I have considered. That being said - my husband is the one that has the 'needs'. However - I think he is starting to see the light. We have a gentleman who is going to actually build the home....log home...and everything will hinge on what he says. He has done great in convincing my husband to go smaller.... I'm thinking a kitchen, combo dining/living area and bedroom plus laundry room - that coupled with a full basement - I think that is more than enough. He wants a three car garage attached with a breezeway and a huge workshop on top....
Bottom line is - I am not even sure what we can afford. I'm thinking that we should take an annuity with his retirement plan because he's the type that will spend it if he has it. The more you give him - the more high maintenance he becomes .
I would never rely on what one person says about building anything anywhere. Come up with some plans - and put them out to bid.
But - more important - if your husband is a handy guy - he will want a workshop. You're on a computer now - and I suppose he has one too. Where are your "work stations" - or your home office? Where is the space where you get away from one another? We have used 2 of our bedrooms as his/her home offices. But even when we lived in smaller condos - we had separate work stations set up in the second bedrooms (as well as a sofa bed for guests). I mean - what is he supposed to do during an 8 month long winter in Vermont? You too for that matter? The house you're describing sounds like a recipe for "cabin fever". With a lot of people - sometimes it's more stressful doing nothing than doing something.
And perhaps some people from up north can help me out - because we don't have basements in Florida. But my BIL in the greater Detroit area has one. And it is freezing in the winter (my BIL is very happy working in his basement workshop in the winter when it's 60 - inside - but he also likes to camp out on multi-day hunting trips when it's 30!).
BTW - although you said you were a fair amount younger than your husband - how old is he? Unless he's a really old geezer - he may well wind up in good shape once he recovers from his surgery - and go back to work (if I had to guess - your husband is in his 50's - maybe early 60's). And both of you can spend X years improving your financial situation. My late mother had her first bypass when she was 59 - and still boated with my father until she was almost 80 (they'd take their boat from Florida to Bimini and spend a couple of weeks there at a time). Robyn
Between wife's social security, my social security, 401K withdrawals, and wife's pension, I expect we'll have somewhere between $80,000 and $90,000 a year income.
It ought to be adequate. The problem is we are used to living on more than that.
Just one other reason, I intend to keep working beyond 66.
I realize these will sound like dumb questions to you (but remember - I'm in Florida ). Where do you burn the wood
We have a woodstove that heats our home directly and it heats water that supplies our radiant floor system.
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... and what do you do with the ashes?
Once a week one of us dumps it out.
My Dw was using our ashes to make lye, for her soaps. She was making a selection of soaps, her p/t job suddenly became f/t so now she does not have enough spare time to focus on her hobbies.
I spread ashes in our garden, where they work to adjust the pH of the soil.
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... do you store the wood - and how does it get into the thing that burns it?
Yes, we have stacks of firewood, both inside our house and outside. Stacks of firewood are a very common sight in this region.
It gets there by picking up a piece and moving it.
Quote:
... How does the heat that the wood burning generates circulate around the house?
Our wood stove radiates heat directly.
Plus it sits under a ceiling fan, which really helps a great deal to push the heat down and keep the corners of the house warm.
Plus our woodstove heats water. The heated water circulates through a thermal bank down stairs, and from there it circulates through a radiant tubing loop in the floors to heat the floors. We also have a loop that provides hot water to our towel rack to keep our towels warm and to quickly dry off any wet clothes. [We like jacuzzis so having warm dry towels is nice]
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... Are there places that restrict wood burning heat due to air pollution problems (I know there are quite a few places in the US where you're not allowed to build wood burning fireplaces these days).
I have no idea.
Like you said I think there are urban areas where wood burning is restricted.
Also in my hometown [in California] it has been out-lawed because the weather pattern does not allow the smoke to leave the valley.
Here we live in a forest. Neighboring homes are generally a 1/2 mile to a mile apart from each other. We have never seen any smoke from any neighbor, and I doubt if any neighbor has seen any smoke from our woodstove.
We have no restrictions on wood burning. In fact it is the preferred method of home heating. 'green', sustainable, local, bio-friendly and all that stuff.
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... I don't know about building being much cheaper than buying.
Oh, yes, even after having done it, we attend home shows and whatnot and generally owner-built runs 50% of the price of otherwise.
Quote:
... But you can get exactly what you want. Spend money on the things that matter to you and not spend money on the things you don't care about. For example - the norm where we live (at least in 1995) was houses with big family rooms and silly little living rooms that no one ever uses. We got rid of the silly little living room - and built space we knew we'd use. In fact - we use almost 100% of our house every day (even the guest room - my refuge when my husband starts to snore ).
I agree.
I served as a crewmember on three different subs, and I found that I really like high ceilings. By designing our home I was able to have 12 foot and 14 foot ceilings, which I like.
Also it was up to me, how much insulation I put it our house. So I put in enough to bring it up to R-60. Which slightly exceeds codes. It is not possible to get that in a modular home. And we see the effects of this in our heating costs.
Quote:
... I don't have a mortgage either. But with interest rates being so low these days - a mortgage is not something I would automatically rule out for everyone (e.g., for some people - it may make more sense to take out a manageable mortgage than to pay for a house with money from a retirement account). Robyn
If you have a mortgage then it is an added living expense.
Most people have to deal with either rent or a mortgage. By not having it allows much greater freedom in your budget.
It is nice that interest rates are low now. But they were not always low. When we first began to focus on retiring they were still fairly high. So we thought it was wise to invest hard and work out a method to own our retirement home with no mortgage.
i am not an average American, no pension only source of income is SS benefit for $14,500 a year.
building a house in New England on 2 1/2 acres of land, not up to American Standard but comfortable for summer home.
built a house in the south on 20 acres of land for the winter to save money on heating bill again not to American standard no granite counter top, no subzero refrigerator just comfortable home well insulated a lots windows and sky lights to save electric bill.
i will use Mr Rational item and sub my number. the number are monthly.
I am surprised in this thread that a fair number of people living on very limited resources think they have to have 2 houses. Just my personal opinion - having perhaps one somewhat nicer house and not having to worry about paying for a trip to the dentist makes more sense to me. Robyn
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