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Hello everyone! This is my first post. I'm confused in the direction that I should take to enter retirement. I need your input. I'll be as straight-forward as possible.
I'm a divorced female soon to be 58. I work full-time and do not plan to retire until FRA 66 plus 8 mos.
I am currently renting, and I've owned properties in the past and know that I'm throwing money out the window. Years ago, I got divorced one year, and laid-off from my job the very next year while getting my daughter through college. It was the worse financial time of my life, but I grew and got through it.
I've had to climb back up the financial ladder, and I don't want to throw money away on rent during my peak earning years. In retirement I'll have a small pension, SS and my 401k. I'd like to save the money that is going toward rent.
I am healthy, active and social. I have friends, like to travel, and enjoy the arts. I'm still working on "Where" I'd like to retire.
So far I have several options and I need help determining which choice would make the most financial sense while making myself happy at the same time.
1.) I could buy something now while I have another 8 years of fulltime work. I don't really want a condo because of the condo fees and special assessments. Would love a townhouse, but will have to deal with steps if I decide to "age in place". The 55+ communities are far from work.
2.) I could buy a home elsewhere, and perhaps rent it out until I am FRA and can move into it. Has anyone done this? I'm still researching where I would like to live. It will definitely be in a cheaper area.
3.) Just yesterday, my DIL suggested that I move with them. They are looking to move-up. They own a mid-size townhouse and have two children. They would like a larger home. This was an idea she just threw out in the wind, so we haven't sat down to discuss it. I absolutely adore my grandkids and would have no problem seeing them everyday. My contribution to their household would be less then what I am paying for this lovely apartment. However, I'm not really interested in being on the loan with them, but I'd be willing to rent from them. They know that I would need my privacy.
Hope my dilemma makes sense. If you see other options please don't hesitate to share. Thanks for your input.
We share a house with my daughter, SIL and grandkids. Even though the living areas are separate and we have a separate kitchen, privacy is minimal. I doubt you will shut your door on your grandkids. If you go the route, realize what you are in for.
I would also avoid buying a house in a different area with the idea of eventually retiring to that location. First you will need to maintain that house and later on your plans might change. Buying a house can be a risky endeavor.
I would NOT avoid buying a condo just because of fees. That decision would depend on the total costs and the likely resale value later on. I suggest you reconsider this option. Also is renting really such a bad option? I don't think paying for a place to live is necessarily a bad choice or equivalent to throwing money away. If your rent is low enough, you might be able to invest more and save more towards your retirement.
Have you considered buying a house using a reverse mortgage? You will need to put about half down, plus closing costs. Then no more mortgage payments as long as you live in the home. It's an option I keep on my back burner. Perhaps you would be able to save up enough in the next 8 years to make that work.
I think renting a room(s) from your son and DIL could be an excellent arrangement for everyone involved.
Personally, I would not consider buying a home in another location for "someday" and turn it into a rental in the meantime. Your plans could change and long-distance land-lording can be very expensive.
#1 This could work since you will be their for 8 years. I would probably vote no for my self.
#2 No I can think of a number not to buy.
#3 Depends on how well you will get along but I would at least give this a try.
Be sure they agree that if you move out in a year or 8 years it is ok and they can afford the home.
You can always do option one and two if the #3 does not seem to be working.
I'll think long and hard on living with my son and DIL. I do get along with them well. I like where I'm living, but currently the price of rent is higher than a mortgage payment.
I'll think long and hard on living with my son and DIL. I do get along with them well. I like where I'm living, but currently the price of rent is higher than a mortgage payment.
The rent may be higher than a mortgage payment now, but there is maintenance and upkeep to consider that could easily eclipse your rent payment if you don't want condo fees and are responsible yourself for things. You are essentially free to go wherever and whenever you would like at this point, with little responsibility for your rental, not a bad place to be in.
I don't really want a condo because of the condo fees and special assessments. Would love a townhouse...
From the standpoint of monthly fees and special assessments, a condo and a townhouse are really no different. Both pay for the maintenance of the grounds, any special communally-owned elements like swimming pools or gyms, and the exterior elements of the buildings by assessing monthly fees. And both can charge special assessments if a big repair exceeds the association's reserve funds.
If you want to avoid both stairs and monthly association fees, consider shopping for a small ranch single family home (ideally on a small lot, to minimize the amount of yard work).
Buy a 4-plex. Live in one unit for FREE (as owner/manager), because the rent on the other 3 should cover it all, plus give you some positive cash flow. Even if the cash flow is just break even at first, you can sock away what you are presently paying on rent.
The interesting thing about 4-plex's, is that you can buy one with a standard mortgage! No need for a commercial mortgage, until the unit count is above 4.
So, downsides is that you'd be a live-in owner/landlord, so the other renters can find you easy. You will just need to screen really well, and set proper limits and expectations for them right away. Upsides, is living for FREE, and being able to sock away a lot of money where it can earn more, and do you good in retirement.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Research 'Equity Share' / co-op ownership for an option with DIL. There are many ways to tailor it to benefit both, but you might prefer to just be a 'tenant / boarder'. (ez exit)
While I have extra homes in areas I may retire to... I don't recommend it, as much can (will) change. I get great rental returns, (10%+) and even keep a 'boarder' at my main home, so I can live different places for free (each of my distant homes has a cabin / guest home for me, but main home is rented out for very good return. I fly between as desired, (i keep a cheap car at each place).
Live as cheap and happy as possible. Travel while you are physically able. Take a grandkid with!
Not enough vacation take time without pay. I have frequently taken a month off in summer, or during homeschool fieldtrips with my kids. (We did lots of 12 week trips / study vacations.)
Enjoy the kds, enjoy the moment. You have endured the 'wringer', now make life good! ( for you and others).
Your retirement abode will work out better than you can even imagine at this time.
How has your kid done since college? ( probably better than expected)
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From the standpoint of monthly fees and special assessments, a condo and a townhouse are really no different. Both pay for the maintenance of the grounds, any special communally-owned elements like swimming pools or gyms, and the exterior elements of the buildings by assessing monthly fees. And both can charge special assessments if a big repair exceeds the association's reserve funds.
take time without pay. I have frequently taken a month off in summer, or during homeschool fieldtrips with my kids. (We did lots of 12 week trips / study vacations.)
