What a helpful thread! We started out thinking we would downsize, but in the end I think we’re probably more likely to upsize. Our family of four has lived in an apartment in central Tokyo for about 18 years. It’s about 2500 sq. ft., and we also have a small weekend house, with a lawn and an ocean view (the lawn has been important to my mental health over the years!). Now the plan is to sell both and move to France. Or son will graduate from college next year and may end up in graduate school in the UK. Our daughter is just starting a B.S. in ASU’s online program, so she’ll come with us and study from France. We initially thought we would look for another apartment. Apartments have a lot of good points - mostly being on a single floor, pretty secure, less things to worry about. But when we started looking, we were both drawn by the houses in southern France, with the pool and the garden and maybe a separate guest cottage. I also realized that trying to downsize my husband would be unhealthy for my marriage. He is a total packrat - I only recently got him to throw away his ratty old jacket from his graduate school days (a long time ago!). At the moment, because of the weekend house, we have three couches, two dining tables, etc., etc. Trying to downsize all of that into a single apartment is realistically beyond us, but if we can find a house with a summer kitchen, some guest rooms and a basement for storage, we can probably use most of it. We will still get rid of a lot of stuff before we go, and we realize we may need to do a real downsizing sometime in the future, but this seems to be where we are headed now. I opened this thread with trepidation last night, but it has actually been oddly reassuring - the right answer is different for everyone.
I am an old (73) single mom of a 25-year-old second-year medical student (adopted from China, not a medical miracle!). My daughter goes to school and lives about an hour and a half’s drive from me. I live in Brooklyn, NY and I am a therapist at a community mental health center. I work in the office two long days a week; my office is a 10-minute walk from home.
My daughter will be doing her rotations for the next two years (starting this summer) at a hospital near where she lives–there is a network of hospitals there. She just got engaged last weekend and her fiance is closing on a house in a few weeks in the town where they live. She expects to do her residency in one of the network hospitals. He is a pilot for United and their town is close enough for when he is on call. I am thrilled about the engagement.
I always said that when she figured out where she would live, I would move to that area. I’m a single parent and she’s an only child. This plan is becoming much clearer now. I could work remotely for my clinic for as long as I want, seeing as many clients as I want, in addition to having my own practice. I am renting now and love my apartment (rent-stabilized) and neighborhood. I don’t own a car (parking is a hassle and insurance is crazy) and I rent when I need one. If I move to my daughter’s town, I would likely buy a condo and a car. Such a lot to think about! So many changes in my life this week!
Where are you looking? I was an exchange student in Arles when I was younger; I love looking at houses online and dream of moving there.
We are going to rent for at least a few months before deciding on a place. We are mostly looking further east - Antibes is at the top of the list at the moment - but when we may also consider places like Uzes or Aix en Provence. We’ve been city people for a long time, so we are focusing on bigger towns/smaller cities, someplace where we can walk to shops and restaurants. Looking at houses in France online is totally addictive!
So fascinating to hear all the paths considered here - every one is instructive in some way. And best of luck to those in the process of planning, too!
Following up on ccreader and new preironic’s discussion - a friend of mine (when I shared my “I want to change it up!” thoughts) suggested selling/buying pre-retirement was good because one can qualify for a bigger/better mortgage with larger income.
That never occurred to me (was thinking we’d buy new place mostly in cash from profits of our suburban place in a good school district, etc.?).
But hearing all the stories (including some upsizing!) made me wonder - is taking out a mortgage on a “Stage 2” home something people regularly do? Is it adventageous?
I’m trying to plan for some frugal living for the next few years (to a certain extent) to leave funds for travel/future medical care. But my friend reminded me of the tax advantages of a mortgage. It’s enticing to think about getting a bit of a nicer place (esp. since current destination location isn’t cheap!).
Thanks for any thoughts!!
I mentioned downsizing to my local relative. She just redid her 5 bedroom house, and her kids visit frequently. My “only” lives across country, and I visit them. So I certainly don’t need my 4 bedroom house and pool.
Well, this relative suggested I move into an independent facility. That made me cringe.
I’d love to live by the ocean, but I don’t want an old condo building.
I wouldn’t mind an attached villa, so no one above or below me.
Very important is being able to walk/ bike to shops and markets.
I’ve lived in my house 20+ years, and I enjoy seeing neighbors and dogs.
It’s not easy
Our original plan was to buy a smallish condo/townhouse in the city we plan to move to and then also buy a lake house. That plan changed due to 1. The condo/townhouse properties in that city are located mostly in “hip” places - which I love, but everyone there seems to be 30 years younger than us 2. We weren’t sure we wanted to deal with having two places 3. We fell in love with a neighborhood/s in a certain area of that city. We have spent some time in that specific area and will be there again in a few weeks. It has everything we want (including age diversity) but we are now looking at buying a single family house that is smaller than the one we live in now (4000+ sf/5 br/4.5 baths).
But that tax “advantage” is procured by debt. A no no in our retirement scenario. Of course this is a personal decision, but a main criteria of our retirement step-off was zero debt.
ChoatieMom - that was my initial feeling too! As I move into a time (eventually) of less earning power - no debt was my goal. Depending where we move, though, we probably won’t be able to get a place as pretty as our current (if we pay cash), even if we go smaller. I have to be okay with that on a bunch of different levels I suppose!
But my friend reminded me of the tax advantages of a mortgage.
If your friend is thinking of property taxes and itemizing deductions, remember that the 2017 Tax Cuts and Jobs Act capped the amount of state and local taxes (SALT) deduction at $10,000. That amount includes property taxes. And the standard deduction greatly increased. So depending on your particular situation, it may not be advantageous. We have relatively high property and state income taxes and we don’t itemize for Federal taxes anymore.
Biggest pro for downsizing…we WILL need to get rid of things we don’t use. It took us over 10 years to get my mom’s boxed up stuff out of our house. We don’t want space to pile up boxes from past generations…and our kids don’t want that stuff.
So…we want a nice open floor plan. About 1800 sq ft max. Getting what we want for the price we want is really not possible now…so we are just staying put.
It helps that we live four houses from a beautiful lake and have beach rights…and we really like our neighbors.
Isn’t that under discussion (May have already passed House - not sure) to be raised?
Though, then there are likely alt min considerations.
Some considerations I have been weighing in our “sell our big house at the top of the market, rent for a few years until retirement, then finally move closer to family and friends and continue renting” plan include: are we too settled in our ways to adapt to apartment living again? Neighbors above and next door? Having to worry about hearing them, and worrying about our dog barking? And frankly, since my partner and I are not a warm, happy partnership (a different topic), having a big house where we each can operate independently for long stretches, is a life saver. I’m not sure we could co-exist in a 1500 sq ft apartment.
It did pass the House but yes, who knows what might change in ongoing negotiations. The change to SALT and standard deductions was due to revert back to pre-2019 amounts in 2025 anyway if Congress doesn’t act.
All this means that one can no longer make long term property tax decisions expecting Federal deductions to stay the same. The old mantra of “property taxes help you save on income taxes” is no longer reliable.
For every dollar you give me, I will give you 90 cents back. Much better deal than the government gives with tax deductions. Now if its something you otherwise want, the subsidy can be helpful. But spending money just to get a tax deduction doesn’t make sense.
I agree that having a mortgage just for tax advantages makes little sense. However you could make an argument that the low interest rates make a new mortgage less intimidating than at higher rates.
My husband and I both like the peace of mind of having our house paid off, lower cash flow needs in retirement. Other couples don’t want to tie up that kind of money tied up in their real estate, prefer to have a mortgage.
OP - At some point when you could probably consult a financial planner for insights about various options.
We took out a lengthy mortgage at a very low rate (under 3%), but we’re cash-flowing college. I make biweekly and extra payments. Once DDs out of school that all shifts to mortgage without a change in lifestyle or budget. We’re on track to pay it off in 10 years. A mortgage is the only thing we go into debt for, but definitely want it off the books before DH retires. The cost of the house, mortgage amount and ability to pay it off before retirement were all factors in our decision. We didn’t factor in tax advantages as debt free was always our ultimate goal. Property tax is really low ($2k) in our area, especially in comparison to the $12k we paid in PA. COL definitely also factored into our location decision. FE: I paid 2.80/gal to fill up last night; higher than last year, but it’s currently 3.69 at home in PA. We gave up some conveniences like shopping variety, but we gained some great farms with fruit/veg/meats. Everything is a trade-off, you just need to decide which are your sticking points. The more we searched/researched areas, the less important some sticking points became.
Moving is one of the most stressful life events one can go through don’t forget. (This is just a general point for everyone). When we moved to Europe 25 years ago we almost got divorced, even though we’d met in school in that country, had friends, knew the culture etc.
Not saying don’t move, just don’t want anyone to be blindsided if they find the move difficult.
Everyone responds differently and that’s great as long as each couple or family can agree. My parents sold their nice (but not huge) house and moved to a 2/2 condo that was less than half the square footage. It was my mother’s idea and dad went along to keep the peace. He was miserable without his garden and garage.
My parents’ neighbors and friends mostly tried condo living by keeping their homes and renting or buying a condo or similar to see how they liked it. Most ended up moving back to their houses but a few moved to independent living in 55+ communities and one couple moved to be nearer their only child and grandchild, especially as medical needs increased and/or were looming.
All of them had some challenges adjusting to living on closer proximity to so many people and many missed their yards since there is no gardening at the 55+ community.