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The feedback I have gotten on another thread tends to disagree with Warren
I thought I would start a separate thread so we could have a one topic discussion. How far out do you feel one should plan for where to purchase or rent a retirement home?
we made the mistake of trying to do it 5 years in advance .
now after tasting a more country rural life after living in nyc we have no interest in making the change.
we live in nyc and have a home in the pocono mountains in pa we are trying to sell .
we realized over the last 5 years our entire thinking about the life we wanted in retirement has changed and we are pumping almost 20k a year into supporting a 2nd home .
while we love it there in the summer the winters are just to harsh as well.
My $0.002: How far out - at 5, really start looking and seriously checking the location(s) out (extended stays, all seasons, etc.). At 3, reduce the list to the optimal candidates. At one - go for it.
At the risk of committing heresy, I've got to strongly disagree with Mr Buffett (who I generally consider to be an American national treasure).
Making a geographical decision ten years out is, IMHO, a VERY, VERY bad idea. Using current low housing price as the determinate for making a serious financial decision NOW for retirement is really rolling the dice. Way too much can change in a specific location that could significantly impact the wisdom of retiring there in a decade.
I absolutely would not follow his advice on that issue. Definitively explore/investigate an area - ABSOLUTELY - buy now, no way. (Unless you have so much money that changing your mind is totally painless. Billionaires have a slightly different perspective that mere mortals ought to be wary of (hanging prepositions are bad form but you get the point. )) JMHO
Last edited by Pilgrim21784; 02-16-2012 at 06:14 AM..
As I said in your other thread, OP, if I had ten years and the means, instead of buying the retirement home now I would take an annual 2 - 4 week vacation in ten targeted places (one each year) to really get a feel of the places. You will be weeding out at least half. A year or two before retirement, if you're still interested in these places, check up on how they've held up over time with safety, resale value, general desirability and then pick from your selected list. With this plan those ten years will go by quickly as you get involved in each of these places, mixing with the locals and going to events, etc. It's something I wish I could have done. And who knows, sellers may be giving away houses in ten years.
Face the unpleasant reality that your knees will not like stairs in a few years. Face the unpleasant likelihood that you'll eventually lose your driving privileges and will need public transportation. Keep in mind that brick doesn't need replacement/paint like siding. Don't get more yard than you'll be able to tend to when you're 85. Those are my thoughts.
1. I wouldn't trust a word Warren Buffet says. I worked for one of his companies. (Geico) Probably the worse job I ever had and the worst place to work I have ever seen. Talk about abusing employees!!!!!. He likes to buddy up to obama, so he will say things to further his own interest, and that would be to help Obama by stimulating the market and part of that is to stimulate the housing market.
2.Articles in the paper in the last few days indicate that the forclosure rate will increase significantly this year. That means prices will drop even further in housing. IMHO, a lot of people were buying and investing in 2nd houses for years because the price kept going up. A lot of those homes are on the market or forclosed on because the drop in prices. You will not see the demand for 2nd homes come back for some time. Just check on the number of unoccupied housing units in Florida. Its huge.
3.You'll have substantial costs maintaining two homes.
4.You choice of retirement location may change, and then like a previous poster, now you have a house in a place you don't want to move to.
Warren Buffett isn't telling boomers in general to buy sunbelt homes. The story quotes Buffett's secretary, not Buffett. The secretary said:
"I just thought it was time to buy a home," she said. "Warren tells me that it will be the best opportunity in my lifetime. "
It sounds as if she decided to do it and Buffett agreed with her. What's right for her may be wrong for others.
I would not buy a home in another location ten years before I planned to move there. There are the headaches and costs of renting a place in another state. Also, many things can change in ten years.
I suggest saving money and investing it conservatively, then making your decision much closer to retirement.
Or, if you're sure you want to live in a particular location, find a job there and move now, if possible, instead of waiting.
Ten years before I retired I made the decision to retire ABC - Anywhere But California in which I lived and worked. At that time I did some cursory research on potential retirement locations. Five years out I began more serious research and narrowed my choices considerably. Three years later I got serious about location because I retired two years earlier than originally planned. I decided to stay-put for a year and adjust to living where we were on the reduced retirement income. But that time I'd pretty much narrowed it down to one state. At issue was precisely where. Finally the big day came to travel there and look at all the options. It didn't take long. In four days we found the area we wanted, looked at houses and bought one. A month later we closed and moved in. The rest is history.
Having been raised in the military and seeing what my parents experienced there was no way I was about to buy well in advance and become an absentee landlord. Too many headaches even with a property manager. Thankfully the housing market downturn favored us, we made a good purchase and have never looked back.
I'm about 3.5 years away from what might be my retirement. I'd be 66 then. For the past year I've been more seriously thinking about "where." I narrowed down my preferences to: S. Florida, the Tucson, AZ area and several communities in Mexico (a country I lived in for 6 years and have traveled through extensively for more than 40 years).
Low condo/townhome prices in FL and AZ are a plus, now. In FL I'm considering one of the Century Village communities. Activities and good transportation are the draw - but the very low purchase prices are the most attractive component there. In the Tucson area, where I lived and worked previously for 2 years, I'm attracted to the Green Valley community. Public transportation isn't as good there as it is in S. Florida but there are good activities, health care options, weather (dryer than FL), and inexpensive housing (but more expensive than S. FL). Though I'd been thinking for years I'd retire to Mexico, build a small home, etc., my current thoughts are that I'd rent there instead. It could be a 10-year or less move, though, because healthcare options aren't very good, unless you're located in the largest 4 or 5 cities. Once my health declined I'd want to return to the USA. So, why move there in the first place?
I couldn't / wouldn't want to support two homes, though. I'd sell or rent my condo in Chicago to take-in someone to share 1/2 the costs if I decided to keep the place. I love Chicago and could easily spend 6 months here and 6 months (Winter months) elsewhere. Some of my senior neighbors do that.
A 'wild card' option which I've added to the mix of considerations, just in the past 6 months, is to purchase a motorhome or truck camper and travel almost full-time for 5-10 years following retirement. It's an 'itch' I'm tempted to scratch, if I can figure-out what to do with my condo and the expense of maintaining it. I'd want a "home" to come back to if the RV lifestyle lost its allure sooner than I think it will.
I've been feeling some self-generated pressure to buy something, my retirement home, while the purchase price and interest rates are low. I could purchase something in S. FL and have it paid in full before retirement, which is a plus. But the short-term mortgage and HOA/recreation fees would be $5,000-$7,000 per year and I wouldn't be using the place but for several weeks a year until I retired. And if I decided to work beyond 66 I'd be carrying those costs for a longer period. So the timing of when to 'pull the trigger' on a purchase, if purchase is what I do, is the gamble.
Anyhow, these are the gyrations I'm puttng myself through at the moment.
Face the unpleasant reality that your knees will not like stairs in a few years. Face the unpleasant likelihood that you'll eventually lose your driving privileges and will need public transportation. Keep in mind that brick doesn't need replacement/paint like siding. Don't get more yard than you'll be able to tend to when you're 85. Those are my thoughts.
Well we bought our retirement house in the northern panhandle of WV it is brick and is near everything, and has public trans. no yard to speak of,
it does have four flights of stairs but I have bought Stair lifts for them so have that part covered.
Very inexpensive place to live, good medical care nearby large city not that far away. Oh and house was very very cheap.
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)) JMHO
