Well again, this only seems strange from my personal experience. But then my parents have done an excellent job of reclaiming rooms as kids leave (a library here, a study there, a guestroom downstairs, a grandkids’ playroom upstairs) so that they’re never going to rattle around in there; more likely they’ll be smothered by all the crap they’ve accumulated that’s filling up the place. (I inherited my packrattishness from my mom.)
I guess I can abstractly see how if a family wasn’t reclaiming the house as they went, though, that it would eventually become pointless to have so large a place. Abstractly, that is.
My father-in-law stayed in his big old house until my mother-in-law died at 90, mostly because she would never want to leave it and the stuff. But it was over 130 years old and beginning to need lots of maintenance, and he was beginning to fall behind on it. He moved into a senior residence, with a two bedroom apartment (not assisted living) and is having a wonderful time.
I live in a five bedroom house, several rooms of which we use only when the kids come back for Christmas. We fully intend to dump it and move someplace smaller and use the profit for fun. In any case I want to get out of here before the Big One hits.
I specifically excluded long term care for a reason. That and medical stuff needs a separate line item in budget planning, since you will need a reserve to deal with something that can hit at any time and because the amount is large. I was talking about budgeting for general cost of living, entertainment, travel, and food.
As you all know we have a pretty good medical system in Australia and old people tend to get most things paid for. So saving for medicals is not that important, it is if you want to skip a few queues and have a better quality retirement home but not critical.
We have a scheme called superannuation and basically a % of our wages is directly deposited into the variuos plans. We can elect high, medium or low risk and this forms the guts for most of the population. Another area is private property, a lot of Australians’ personal wealth is in the family home and selling this and doing a seachange is a popular way of freeing cash up.
Some people do elect to self manage super but given that most people can’t balance a cheque book.
It seems to work, it has for mom and dad and a lot of other retirees. The issue is that most super is tied to markets and well that have been a bit crook lately.
But remember you are investing for the long term and sudden movements whilst problematic for people who require to get thier money out right then and there and also for people who have narrow portfolios for the rest of us it seems to work out pretty good.
I don’t want to insult you, but your (both of yours) way of thinking is alien to me, yet quite common. I simply do not understand it. Why would anyone give up a home they liked after living there so long? Don’t people ever want to put down roots and remain a part of their community? I can see it if the neighbourhood declines, or the Crips and Bloods start moving in, etc. But if the neighbourhood is good and the house is nice…why move?
Arguments frequently given are that the bigger house “costs too much” to heat and cool (actually, a well-insulated house sees very little differential cost per square foot above 2000, and you can shut doors and vents…), that the house seems “too big” (again, this is incomprehensible to me…if I was retired I’d darned well think of cool things to do with every room, and want more!). Talking with Fierra in the car yesterday about this thread, we came to the conclusion that most people who want to sell an established house they like at retirement fall into two categories:
They didn’t save enough for retirement because they intended to use their house as a piggy bank, or
They feel too sad about their kids leaving, and might even be tired of maintaining their kids’ old rooms as a “shrine.”
People I know IRL who have done this have uniformly had more regrets than benefits with downsizing by choice at retirement. One set of grandparents had a great house - 4,000 square feet with a huge pool in an upscale neighbourhood by a golf course. They’d lived there for decades, and at retirement they decided that it was “too big” and they wanted to live on the road in an RV. Two years later they came back and tried to buy their old house back, offering a fortune over market value, and were shown the door. They left their friends, neighbourhood, familiar stores, everything behind, and now live 2 States away in that same RV and are fairly unhappy. Another grandparent moved on retirement to a house 1/3 the size and complained bitterly sometimes about missing her house and the space she had - she had to sell or give away a lot of possessions at moving time, and she misses those too. Fierra’s mother sold her medium-large house in the middle of England which she had lived at for decades and moved to a smaller retirement house 200 miles away (which in the warped sense of the English may as well be 2,000 miles away). All she does is complain about the friends, neighbourhood, possessions, etc. she had to leave behind.
I reckon I don’t know a single person IRL who was happy with the decision to cash in their house on retirement. I’m sure plenty of folks are, maybe most, I just don’t happen to know any.
For my parents, its too much house and too much yard to maintain as they age. My Dad is 64. My Mom is 66. Cleaning a lot of house, cutting the grass on that much yard, keeping up with the weeds in the flower beds, walking the stairs (its a damn split level, there is nothing but stairs!) - those are just things that physically they won’t be able to do forever, and that’s that is the reality of the situation.
It isn’t that they want to use the house as a piggy bank - although knowing they can’t keep it up forever, its part of their retirement planning.
Their kids have been gone for fifteen years - if they are sad about it and that was a driving factor, they’d have sold fifteen years ago, not planning on selling it five years from now.
They’ll stay as long as they can, but they are aware they can’t forever. Why not be realistic at that point about its value as an asset.
If Mr. Sali, god forbid, passes on before me, I plan to stay in my house for, say two years, while I look around for just the right place, maybe visit some relatives out of state and see what’s available there. No way in hell am I going to be saddled with a house that needs constant repairs, mowing huge lawns front and back, shovelling a steep driveway, six months of winter, taxes creeping up and up every year. My only fear is between the cost of repairs and the housing market, I won’t get enough to make a down payment on a nice condo or duplex :(.
[QUOTE=Una Persson]
I reckon I don’t know a single person IRL who was happy with the decision to cash in their house on retirement. I’m sure plenty of folks are, maybe most, I just don’t happen to know any.
[/QUOTE]
You obviously don’t know them, but my folks have been overall pretty happy with their decision to sell their old house and move out. For what they got for the house, they were able to buy a smaller, 3 bedroom place closer to my oldest brother (and his kids) and my youngest sister (and her kids as well), plus by a cabin and some nice land up in Sholo, in the White Mountains.
As you say, it’s probably not for everyone, but my folks went from a house close to 5000 sq ft to something closer to 2000 sq ft, and without stairs or sunken living rooms, and that makes thing much easier on both of them.
IMHO, considering your home as a ‘retirement asset’ is a relatively new phenomenon - perhaps a hangover from an other-enthusiastic real estate market. Many studies show real appreciation in real state is far less than the stock market.
My parents retired 30 years ago and their experience (and their peers) was to sell the house only if they were relocating to warmer climes. At the time, I was living in California - in the midst of one of the periodic real estate booms there. I noticed folks starting to sell off and move to Oregon, Washington, Vega etc. because they had so much equity in their homes. Of course, that then distorted the market in those locations.
Currently, from my initial investigations of relocation for retirement, I find that even though I have a very nice home (but not a McMansion), it will probably cost me money to relocate and downsize. Unless I move to a less desirable location and/or downsize severely or into a much older home. This is true even though we want to avoid typical sunbelt locations.
Unloading a large home for less maintenance, easier access is fine. However, I also notice a tendency to avoid going too small - or there is no place for the kids to stay when they visit. A bit irrational perhaps, but tell that to my wife and sister who are firm in that aspect of a new home for retirement.
No insult taken or assumed. We are all just looking at life from different perspectives. Sam and I are just trying to explain our viewpoint as folks who are in the midst of this situation.
That’s a good point, and one of the main reasons why we haven’t moved yet.
Because the place just doesn’t fit anymore. It’s too big. Too many steps (which we can handle just fine right now, but in five years maybe not so much). It costs too much to maintain (and I’m not just talking about heating bills - I’m talking repair bills, real estate taxes, lawn care,…).
Let’s put it another way. When the girls were growing up, we used to drive family-sized cars (and rent big-ass SUVs on those occasions when the cars weren’t big enough). Now I drive a Honda fit. Each was the right-sized car for me at the time.
Uhh, as someone who owns a big house (and has shut off the entire top floor) I can tell you that this is just flat out not true. Also would you kindly explain to my township, county and state that my taxes shouldn’t be significantly higher than those of a smaller/cheaper lot/house, because that would help me out a lot.
Let’s just say that we seem to know different sets of people. The ones I know who have done it seem to be having a grand time.
What happens to all your friends in the neighbourhood? All your favourite stores and restaurants? Parks and places you like to go? The trees you or your kids planted? The memories in the house? Having roots?
Won’t the new home have maintenance, or a lawn to take care of? Even if it’s a brand new home - shoot, all I have to do is see my co-workers cases, where their new cookie-cutter Pleasant Valley subdivision homes are developing major system failures with 5 years of purchase. My assistant’s home he moved into in October has already needed a new furnace for crying out loud, and another lady here has had to replace her driveway after just 5 years. Still another has had to have giant floor-ceiling cracks in the drywall repaired on a 8 year old house. And what is the real time spent cleaning a room, per week? 15 minutes, tops? And if one is retired you sort of have time to do that.
I guess if the choice is home->condo I can sort of see that. However, it gave me the creeps knowing that during the day anyone from or on behalf of the condo or apartment complex could just enter my space and poke around, let alone the innumerable rules and bylaws, noise from the neighbours up, down, and sideways, etc.
Going too small like jasg points out seems to be a serious problem. I cannot count the number of times I’ve seen family heirlooms sold at garage sales, given away, or even thrown out as trash because someone downsized their 4000 square foot home to 1500 - or less. Fierra’s mother threw out paintings and books for crying out loud, because she had no space to keep them, let alone furniture, when she downsized for retirement. My grandparents who went to the RV had to unload about 90% of all their possessions (most of the remaining 10% sits rotting in a storage shed) - they essentially flushed their entire life accumulation of stuff they liked.
We plan on staying in our house unless the neighbourhood declines (crime increase, really) or we win the lottery. We want to make an investment in our community - on the micro (neighbourhood) and macro scale, and not abandon ship as soon as age 65 comes. Plus we’re not so unwise as to have bought a McMansion in lieu of saving a sensible amount for retirement. Buying the home you want, and sticking with it, I argue, is a Conservative financial strategy which helps make America stronger by keeping communities together, and one which should be a part of a good retirement strategy for savings.
Then no offense, but I will hazard that your home is not insulated very well, or not as well as you believe it may be. No snark intended whatsoever, if closing off an entire floor and the vents makes little to no difference, perhaps an energy audit would help you out.
Good point. I guess our property taxes are so laughably low ($2k/year) I never even think about them; obviously some folks in some areas of the country may be more heavily burdened with them.
Yeah but you’re assuming someone has lived in one place long enough to grow roots. Or that they like their neighbors. Imagine you moved two or three times before the age of 18, from one suburban subdivision to another, where you didn;t know your neighbors and didn’t want to.
There are good reasons to stay put but for parks and restaurants?? Thats one of the stupider reasons I can imagine. Yeesh, there are parks and restaurants in other places. Children are also highly mobile. If my parents want to live near their grandson, they’re going to have to move.
Most of my parents neighbors have moved away themselves. There are very few people they’ve known for years in the neighborhood. And they’ve picked a townhome complex to target (maintenance included in association fees at a fraction of what maintenance services on their large home costs them) in the neighborhood they tend to shop and eat in, so they’ll still go to the same restaurants. Which is part of the deal as well - my parents live in an outer ring 'burb. You have to drive to get anywhere. They need to move closer to services as driving becomes more difficult.
Heirlooms? - my parents have spent years dumping the crap their parents left them - after going through that with their parents, they feel pretty strongly that they don’t want to burden us with Aunt Rose’s egg beater that she made divinity with for Christmas. If we want it, we’ll take it when they move out. There are probably a few dozen things in their home that will get passed on.
Now my inlaws are a different case. They are adding onto their home to be able to stay there. There only bedroom is upstairs and as they age, they don’t want to take the stairs - so a first floor bedroom needs to be added. Their neighborhood is wonderful and inner city - they can walk to restaurants and the grocery store. They don’t want to get rid of their things and treasure them (my mother in law has no problem burdening me with her mother’s egg beater, and expects me to treasure it and pass it down to my daughter, who is expected to treasure it and pull it out every Christmas while she tells stories about her great grandmother who was dead a decade before my daughter was born - my mother in law is a sentimentalist. I suspect you can tell I am not, nor are my parents.). They’ll stay there as long as they can.
Una, I think you’re letting your own biases creep in here a bit. Everyone is in a different situation.
For example, we have no real roots in our local community. My wife and I have lived in five different areas of this city in the last 25 years. We hardly know our neighbors, other than to say ‘hi’ to them from time to time.
Our house is a two-story. We bought it for the following reasons:
We wanted to be able to watch movies or play pool or listen to music without disturbing the child, so we wanted a developed basement.
We wanted a large home office, as we both bring home work.
We wanted a neighborhood with a good school and access to parks and other kids for our child.
We wanted a large garage, because we had a minivan and a second car, plus we needed room for storage.
I wanted room for a pool table and a soundproofed home theater.
We wanted a big yard for our child.
So here we sit in a house that has 3400 sq feet of developed space, exactly the way I designed it. It’s great. I designed and built the theater and games room and office, and it’s very personal and I’d hate to give it up. However… The house is a lot of work. As it gets older, it will become even more work. It uses a lot of energy. We have about a quarter acre of lot to care for, which means hours of work per week mowing, weeding, and tending to landscaping. Vacuuming requires hauling a vacuum up and and down two flights of stairs. We have rooms that even now we don’t even use once in any given week.
Technology is changing. I built my home theater around front projection technology. In 20 years, I imagine we’ll have much better alternatives. Our home office isn’t as useful now that we mobile devices more for web browsing and such.
When we get older, a more appropriate home for us will likely be a 1500 sq ft bungalow. I’ll get to design and build a new theater and office, which should be fun. We’ll have one flight of stairs, and a nice big open floorplan for the two of us. We won’t need three bedrooms or a huge garage, and we’ll have a small lot with a zero-maintenance design.
I come from a family of farmers, and farmers usually retire to the city or a nearby town once the farm becomes too much work. So I’ve always had that mindset that one day you retire and then scale back your workload and move to a more appropriate place. But who knows? By then we may love this place so much we won’t want to leave - which is why it’s not the core of our retirement plan. It’s just a security blanket - additional funds for emergency. Notice that I said we would use it for things like paying for nursing home care if we needed it - by default, if one of us is in a nursing home, the other isn’t going to be moping around this giant house alone. So it would definitely be sold.
Another retirement option for people who want to stay in their house is to turn their home into an annuity by taking out a reverse mortgage. Most of them guarantee that you can stay in your home until you die, so you don’t have to worry about the mortgage running out early and being kicked to the curb. But it gives you a way to extract value out of your home in your retirement. You just won’t be able to pass it along to your children.
15 years ago we moved from a nice town in NJ to Silicon Valley because of my work. My town is fine, and the neighborhood is good, but we still have friends in our old town. Moving back there - or maybe to nearby Princeton where we lived when I just got out of school - would be like going back home. We are both from the East Coast, so NJ just seems more comfortable to us.
We have 10,000 books between us (at least, I’ve got 6,000 sf books myself) so we can’t go too small. Three bedrooms - one for us, and one each for projects/returning kids, seems fine, as opposed to our current 5. In any case the kids are old enough so that by the time I retire we’ll be going there, which is much easier when they have kids. The kids grew up in NJ also, so for my oldest, especially, not going back is not going to be a heartbreak.
Nope. The money from the house is going to be nice, even after buying a new one, but we’ve got plenty saved up without it.
Nope. First, people who retire usually have had years to deal with whatever ill effects there are (I can’t think of many besides the improvement in our sex life.) Shrine? Not hardly. When they are gone, the only use either of their rooms get is when the dog sits on the bed looking out the window at the kids going to the school across the street.
If the choice were staying or living in an RV, I’d stay. My wife drove one around the country with the kids, so that change seems a little extreme. My father-in-law’s retirement home is great, and he loves it, but he was over 90 when he moved there. I can’t imagine living in one when you are 65 or 70. Circumstances change, I don’t see why your living circumstances couldn’t change with them. Maybe the quality of the school district doesn’t matter any more. Maybe being in walking distance from shops is more important than having a giant lot. Maybe being within easy commuting distance of work doesn’t matter. Of course you have to make a list of what is important to you. Is someone forcing your grandparents to stay in the RV?
When we moved in to our house the house next to ours was occupied by an older couple. She was very nice, but she died soon after. He was a rat, hated by his children, a drunk, and had full time care. When he finally died, our neighbor on the other side of him bought the house for his daughter, so we got to see what a mess it was. I just don’t think he was really better off in there than he would have been someplace else. His choice, sure, but it is very easy to get behind. (He had plenty of money also, it would be worse to be retired and not have quite enough to keep things up.)
So there are tons of good reasons to move - if that is what you want to do.
Sam, our home is very similar. We bought it to raise kids in. The neighborhood, the schools, the floorplan, the yard - everything was chosen for the purpose. When the kids are raised, it will have served its purpose.
We have no desire to live in the 'burbs. We are city people. When the kids move out, we move out. But we didn’t want to raise kids in the city.
I just wanted to address this one item, and here I’m speaking as someone who has cleaned out both my mom’s and my wife’s mom’s houses after they’ve had to move into independent/assisted living because of failing health. Those heirlooms you love? Give them to the kids. Now (or as soon as they’re in their own houses). If the kids don’t deem to want them, give them to a museum. If the museums don’t want them either then they’re not heirlooms - they’re junk that you happen to be fond of.
What your kids are going to want are your old photo albums and diaries. (Those old pictures in picture frames that you love? Throw away the picture frames and put the pictures in large albums. They’ll keep better, they’re easier for you to look at or show people, and they don’t take up near as much room this way.)
When my mom moved into assisted living, her house was cluttered to the point that you literally had only a two-foot-wide clear path that you could wander your way through to get from room to room. She’s gone now, and my sister and I have roughly ten large sturdy rubber/plastic bins chock full of diaries, albums, and pictures (which we removed from their frames) that we keep and cherish. I think my sister also kept a couple of small china pieces. Everything else was sold off or trashed.
Having said all that, I’ll freely confess that each time my wife and I start thinking about downsizing and moving into something more reasonably-sized we start looking at all of the junk that we’ve accumulated over the last twenty five years of living in this place and say to each other “how’s about we just die here and make the kids sort it all out?”
(We have videos that I took of the kids riding their Big Wheels around the basement back when we bought this place and the most amazing thing about those videos is that the basement they’re careening around in is almost completely empty! I didn’t know we had walls behind all of those boxes!)
I have favourite places to hang out, where the manager is my friend, and he comes out and chats with me about family, how I’m doing. I’m a “regular” where when I walk in they say “Welcome back!” and they mean it, and they bring out my favourite things fixed just right, without asking, as well as all sorts of free special dishes or desserts. I meet with friends or family at these places regularly and chat and talk and share life together…and that’s stupid?
And let’s look at parks - nearby is a large park with a heavily wooded walking trail 13 miles long, which I’ve been walking on for more than 24 years. I know the routes, I know where the deer hang out, the beavers build their dams, I know where the nice place is to sit and watch the hawks circle. I know where the trees form a tunnel which in June nights is filled with fireflies like being inside a planetarium. I know where to find copperheads sunning, where the whippoorwills call out at dark. I know where the abandoned pioneer home is fallen down amongst the trees that I can poke around in, where I can dig for fossils in a cliff, where I can sit undisturbed by a small waterfall where an old mill used to be, where I can go out on an island in the river in the winter when the ice is creaking and breaking and look at the majesty of it. And that’s a “stupid” reason to make the Herculean effort to simply not move?
Obviously you are a very different person than someone stupid like me.
ETA: actually, the fact that I’m the lone voice against ditching one’s home at retirement is both surprising and somewhat…I don’t know, to me.
