Poll: How Much Money Do You Have Saved for Retirement? (friend, payments)
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Suppose that you bought a house in a high-cost area, at market-rate. Then, over the ensuing years/decades, ill-luck visited you, and house price was essentially stagnant. You sell, recouping your costs - and relocate to a cheaper area, buying a much cheaper house. Have you benefited from this transaction?
I would argue that you haven't benefited at all! Sure, your new house is much cheaper. But you've spent all of those intervening years, servicing the high-cost house (mortgage, taxes, etc.). You have sunk-costs. Your hypothetical twin, who bought a cheap house in the cheap area years ago - and saw no price appreciation either - wouldn't be far behind you, assuming that he/she invested in difference in running-costs.
The real benefit is when your originally-expensive house becomes even more expensive... when the $2M bungalow in Palo Alto rises 20 years later to $20M. The advantage comes, not from downshifting from an expensive area to a cheap one, but from a high-gain area to a low-gain one.
What does however seem to be happening, is a kind of Matthew-effect, where expensive areas get increasing ever more expensive, while cheap areas are stuck remaining cheap.
As to the couples vs. singles thing, sure, nothing prevents a single person from buying a house, be it the humble bungalow in the inner-suburbs, or a sprawling McMansion in the exurbs. Nothing, that is, financially. But what about culture? The culture posits, that singles rent and marrieds buy. It's not a law, it's not an imperative. But who is sufficiently brave, as to buck the culture?
Are you stuck in the 1950s? I have always owned -- single mother from the time my son was an infant. Lots of single women buy houses. Where have you been for the past 40 years?
... As to the couples vs. singles thing, sure, nothing prevents a single person from buying a house, be it the humble bungalow in the inner-suburbs, or a sprawling McMansion in the exurbs. Nothing, that is, financially. But what about culture? The culture posits, that singles rent and marrieds buy. It's not a law, it's not an imperative. But who is sufficiently brave, as to buck the culture?
Our eldest son bought his first Tri-plex when he was single and 22 years old.
Are you stuck in the 1950s? I have always owned -- single mother from the time my son was an infant. Lots of single women buy houses. Where have you been for the past 40 years?
Quote:
Originally Posted by Submariner
Our eldest son bought his first Tri-plex when he was single and 22 years old.
For my locale, the 1950s would be a leap into the future. The area is stuck in a pre-WW2 stasis. But that's a digression.
More to the point, is that it is family pressures that often drive renters to house-ownership. Having a child is one such source of pressure. So, to clarify, by "single" I mean "a person with no close relationships or relations".
As to Submariner's point, I also bought my house while still in my 20s... a sprawling rural place. It was a decidedly odd and incommodious experience. As most real-estate agents are older women, it was an odd dynamic, to be driven around from house to house, as a single man, by an older woman. So was the experience of scheduling subsequent visits, inspections and the like. I bought my house from a youngish widow, with two kids... a feisty woman who largely acted independently of her own real-estate agent. Showing up at her doorstep, to make another review of the house... weird.
Regardless, in the absence of lifestyle-reasons to buy a house, we consider financial reasons. In an area with low ratio of rental costs to ownership costs, absent lifestyle reasons, why buy? If one goes ahead and buys anyway, the long-term result may not be entirely favorable. Those of us in such predicament, very much applaud the idea of considering "wealth" as being only one's investible, disregarding the value of one's house. That way, at least, I feel to some extent competitive with those folks in San Francisco.
this is way to broad of a question . many may not have much saved but will be selling homes and businesses when the time comes . plus it is not just about retirement savings . all savings and investments would count once retired .
i don't see how me telling you our finances for living in westchester in ny , one of the most expensive places in the country to live would mean a thing in comparison to someone living in Appalachia.
social security for us is 25% ... but again the bigger the ss check you get the more it can count or the smaller your savings and smaller your ss checks the more it can count . a couple today can see almost 90k in ss ...
that can represent 50% of a 180k income .
on the other hand someone living just on ss can have ss represent 90% of their income .
someone like us with a lot of assets but relatively lower ss can have ss represent 25% and yet the person with ss representing 50% is far wealthier.
so again i don't see much use in comparing to others blindly .
Last edited by mathjak107; 09-21-2020 at 04:28 AM..
this is way to broad of a question . many may not have much saved but will be selling homes and businesses when the time comes . plus it is not just about retirement savings . all savings and investments would count once retired .
i don't see how me telling you our finances for living in westchester in ny , one of the most expensive places in the country to live would mean a thing in comparison to someone living in Appalachia
The one reason we moved, Westchester is a great place, but WOW, expensive
The one reason we moved, Westchester is a great place, but WOW, expensive
i know but for us it is not that much more than queens where we are in bay terrace . westchester is far more centralized for us running to 3 sets of kids and grand kids .
we are adding about 10k a year to costs but also saving on no nyc income tax , lots of tolls to see the kids , etc.. but we rent and that represents buying a 2 bedroom ,2 bath apartment in a high rise condo with 40% down .
the city is turning bad so westchester represents a far better lifestyle. we hope to do this in feb .
Everyone needs to to their own analysis as the individual lifestyle and location variables are too significant to provide any kind of narrow range of answer. In our case, we have enough for our needs and wants, plus a comfortable buffer.
If you are retired or plan to retire soon, curios to know:
How much do you have saved for retirement?
How much of your retirement is dependent on Social Security?
Thanks
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Average Retirment savings?
