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Old 04-08-2015, 08:43 PM
 
1,168 posts, read 2,400,313 times
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And by upsizing I mean cost- more than size- I don't necessarily want a bigger house than what we have now-

We are heading out in the next month on a scouting mission for our retirement area and to look at some houses. We have 2 areas in mind- one area is Tennessee and the other is my home state of Wa. We should get around 400K when we sell our NJ house which would get us a very nice house in Tn -but a pretty generic house in the area of Wa we would like to be in. I have no problem with staying with the 400k budget if Tn is our choice- but when we get to Wa to look I would like to raise the budget up to 5-600K which means we would have to take the difference out of our 401ks. My husband isn't so hot on this idea and pretty much thinks we should stay around whatever we get for our house in NJ. It seems to me that taking 200K or so out of our 401ks to put into real estate would almost be safer than leaving it vulnerable to stock market fluctuations-any thoughts?
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Old 04-08-2015, 09:22 PM
 
Location: Sacramento
13,784 posts, read 23,800,954 times
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Real estate isn't a guaranteed value, so that can decline too.

As far as taking money out of the 401K, as an alternative you can take on a bit of a mortgage instead of withdrawing the funds.

We moved up significantly in price when we moved in retirement, so it isn't unheard of at all.
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Old 04-08-2015, 09:31 PM
 
30,064 posts, read 47,304,581 times
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And it might help w deductions to,offset taxes
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Old 04-09-2015, 07:21 AM
 
Location: North Idaho
2,172 posts, read 2,080,012 times
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Retirement savings put into your primary residence aren't very accessible if you need them for expenses. Sure, there are tools like reverse mortgages, but they all come with a cost.

It's a personal decision, but I would not take money out of retirement savings to buy a retirement home unless it still left me with enough retirement savings to cover our anticipated expenses after accounting for social security and any pensions.

Dave
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Old 04-09-2015, 07:53 AM
 
29,764 posts, read 34,851,819 times
Reputation: 11675
Quote:
Originally Posted by exit82 View Post
And by upsizing I mean cost- more than size- I don't necessarily want a bigger house than what we have now-

We are heading out in the next month on a scouting mission for our retirement area and to look at some houses. We have 2 areas in mind- one area is Tennessee and the other is my home state of Wa. We should get around 400K when we sell our NJ house which would get us a very nice house in Tn -but a pretty generic house in the area of Wa we would like to be in. I have no problem with staying with the 400k budget if Tn is our choice- but when we get to Wa to look I would like to raise the budget up to 5-600K which means we would have to take the difference out of our 401ks. My husband isn't so hot on this idea and pretty much thinks we should stay around whatever we get for our house in NJ. It seems to me that taking 200K or so out of our 401ks to put into real estate would almost be safer than leaving it vulnerable to stock market fluctuations-any thoughts?
Lots of variables that only you know. My only advice and it is based on after being in a similar situation is to remember that in retirement you will probably be spending more time in the house and it will be a central part of your lifestyle. Make it support that lifestyle as best you can. Duplicate living areas can help change things up etc etc.
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Old 04-09-2015, 08:06 AM
 
Location: Los Angeles area
14,018 posts, read 17,723,738 times
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To the OP: You are asking for our thoughts, but in my opinion we don't have enough information to go on. Whether it makes sense to take $100K or $200K out of a 401k to put towards the purchase of a home for retirement depends on how much was in the 401k to start with and what the other sources of income will be in retirement, if any.

Will that 401k be the primary source of monthly income once you are retired? You don't want to risk running out of money in the event you live to a ripe old age, in my opinion. So are there pensions involved? And how about Social Security (minimal or maximal)? I agree with others here who wrote that money in a house is relatively, but not completely, illiquid.
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Old 04-09-2015, 08:15 AM
 
Location: Dallas, TX and Las Vegas, NV
5,686 posts, read 4,408,388 times
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How do you plan on spending your time as retirees? We bought a smaller and less costly place because we want to travel for 5-10 years while our health and vigor still remains good. Perhaps our desires for a more homelike place will kick in when we are thru with the wanderlust. However, we don't find joy in most home centered activities such as cooking or gardening. So, it all depends on what lifestyle you have planned for the next decade.
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Old 04-09-2015, 09:20 AM
 
Location: WA
5,392 posts, read 21,385,099 times
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When we moved from an TX in city condo to WA suburbs we wanted certain things in lot and floor plan that resulted in a large increase in budget. We have been very happy with the result as we have the budget under control and are pleased with how we are living. To each their own.
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Old 04-09-2015, 09:53 AM
 
Location: The Triad (NC)
28,484 posts, read 62,084,629 times
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Quote:
Originally Posted by exit82 View Post
And by upsizing I mean cost- more than size-
I don't necessarily want a bigger house than what we have now-
The issue isn't the house cost number per se...
The concern is far more about it's portion of your total net worth.
Too many will go too far into investment reserves that should be earning income.

Quote:
which means we would have to take the difference out of our 401ks.
^^Yeah... like that.

Can your dream be bought with less than 25% of your total net worth?
Can a perfectly fine example be bought with less than 15% of your total net worth?
Choose well.
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Old 04-09-2015, 11:25 AM
 
Location: MMU->ABE->ATL->ASH
9,123 posts, read 17,121,718 times
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My Plan is to Same Size it. (Maybe a little smaller but not much maybe ~500sqft less)

Have a 3br + Office Formal living/Dinning & Family room

when I retire would like a 3br, (Don't need/want a "Formal living/Dinning room" - Want Master, Guest Room, a "office" can be a office room or one of the Bedrooms, Family Room. EIC Kitchen.
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