<p>@busyperson, I didn’t mean to say that our friends’ home is one story - it’s three levels including a finished walk-out basement in the 8500 SF I mentioned. The husband now regrets that they didn’t buy a home with an elevator since he’s having trouble with the stairs. I expect they’ll remodel in a few years.</p>
<p>Where I hope to settle, it’s common to build “slab on grade” and a crawl space can add $8K - $12K+ for a 2500 - 3000 SF house. Basements are rare, I guess because of the heavy clay soil and lots of rock/ledge, and expensive. Some people will pay the cost because they don’t like walking on floors laid over slab. I have to wear shoes inside anyway, so it doesn’t really matter (plus, I hope to install radiant floor heat.) A house with builder grade finishes there runs <$100/SF and one with granite counters, hardwood floors in common rooms (carpet in bedrooms), better quality cabinets, etc. could run $130 - 150/SF. You can imagine the shock I feel when I look at house prices in part of CA or NY or other costlier markets. </p>
<p>Between GardenWeb and Houzz, I could really get carried away planning a retirement home. How about a tiled shower for your dog that’s raised to save your back from having to stoop over during shampoo time? Or an additional detached garage that has a mini-split A/C along with an exhaust vent so you can engage in hobbies like painting, pottery (w/ a kiln), stained glass, etc. in comfort? One splurge I really plan to do is a series of raised planters, at least table height, with a drip irrigation system for growing vegetables and herbs. It would probably be cheaper to just buy what we want from local farmers at the weekend markets, but it’s a hobby that dh & I could share even if I end up in a wheelchair again.</p>
<p>—there’s the rub. 0% fees forever for the managing of the annuity. After 15 years, should we both die, there would be no benefit from that for our children. Still the other 1/2 of our total would be invested with our financial person and there would be that for them. I won’t make a decision based on our kids and inheritance. But having a bird in one hand that is a totally unchangeable entity ( we are married to the annuity forever if we sign) versus the money maybe(!) growing is a dilemma. We always assumed that we would do the annuity but faced with it became unsure. Traditionally 15% at this company has taken the annuity but in the last few years that has grown to 30%.
Our financial adviser would take 1.2% for investing the other 1/2 half of our total.
Thanks for any words of wisdom.</p>
<p>@oregon101: First word of wisdom: you don’t need a financial adviser. Especially not at 1.2%. Buy or borrow Bogleheads Guide to Investing (and/or Bogleheads Guide to Retirement Planning), read it, save thousands in AUM fees, year after year after year. </p>
<p>Second word of wisdom: price a comparable annuity (I think Vanguard has a calculator). Most often it’s a matter of placing a bet on your longevity, inflation, and market returns. There are no crystal balls that aren’t cloudy. If I knew that I was going to be dead within a week, I would take the cash option. Beyond that, it’s a guess. </p>
<p>Don’t forget the tax one would have to pay on the lump sum distribution tho. I’d thinkthe tax on annuity income would be much lower. If annuity is just actuarial amount, I think annuity wins due to tax savings.</p>
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<p>That is already priced in in the higher annuity distribution than just interest distribution.</p>
<p>@igloo, actually, sort of the opposite. You would roll the lump sum into an IRA. You would be taxed on the withdrawals, but to some extent they’re under your control (RMDs aside). Monthly payments are taxable. </p>
<p>@busyperson: Moving involves costs. Lots of costs. There are the bank fees if you’re taking out a mortgage, plus real estate commissions, plus moving costs. And of course once you’re in your new house, nothing fits right.</p>
<p>Here’s an idea: Stay in your current home for the time being. If/when you need more space, or a different configuration, invest in changes in your current home. </p>
<p>^That’s my plan except renovating. I plan to stay in my house as long as I can take care of it. When I move it will be to a retirement community with a full service.</p>
<p>I’d think RMDs are calculated to exhaust the fund at the end of life. That is if the GOV did its job.</p>
<p>In my case, we are definitely going to move from NJ to a state that has no state income tax. That is a huge savings for retirement. Also, our home is a tad bit big for two of us and it has two stairs (basement and 2nd floor) which isn’t practical. So we will be moving to a one story home. I have no idea where or when yet… That’s our new project… which should be fun! </p>
<p>Also, in regards to aging parents, my mom decided she wanted to move into a full service retirement community. She moved into an apartment that was completely gutted to the studs so she had walls taken out, redesigned the apartment and picked out everything since it was completely bare. She picked out the cabinets, tile, counter top, carpet, etc. She decided she better move before she isn’t able to do things for herself anymore. She hired a mover and they helped her move in (including hanging up the pictures, setting up her internet, etc.). So everything is new in her apartment including the appliances (washer/dryer,refrig,dishwasher,etc.). She also loves that she no longer has find help. Now all she has to do is call her director and tell them what is wrong and presto someone shows up to fix whatever needs fixing.</p>
<p>She loves her new place and two of her friends followed her and did the same thing. She spends all day doing all sorts of activities - walks on the treadmill, movies, cards, pet clubs, haircuts, doctor visits, to name a few. Her friends easily visit each other at their apartments and they go and eat together. It is like one big family and she is very social. She is happier than I’ve ever known her. She was alone before and now she is busier than ever. I’m so glad she found a nice place.</p>
<p>She is definitely happier there than she would be with us (she was trying to decide if she should move in with us or move into a retirement community). We are always busy running around and working. She would have been alone with us. It was the smartest decision she ever made. She says it is like living on a cruise ship but on land (with the same age group). They have swimming pools, tennis courts, etc. She says a lady that lives across from her is 65 years old. She loves that she doesn’t have to cook ever again too! If she is happy, then I’m happy. Also, they have an after care (for post surgeries) and a nursing home that she can move into if she ever needs it. She also has a wristlet where she can press for help anytime. She is happy that she doesn’t have to rely on us and is very independent. </p>
<p>FWIW, I recently did a calculation to see if I should take a lump sum distribution or an annuity from a previous employer. The lump sum figure they supplied was lower than expected (based on my calculations), so I will be taking the annuity at age 65.</p>
<p>@VeryHappy, that too is a very wise idea. We do have a small side yard which probably could be a spot to add on a full bathroom and convert the living room/dining room to a living space on the first floor if the parents moved in. I didn’t fully plan out all the costs. We’ve been here over 25 years and you’re right, it would be very expensive to move. I’m not even sure what the going costs of things are these days.</p>
<p>The whole elder parent thing is just something I worry about almost every day. I see them all declining in health. The siblings on either side would probably not be in a position to take care of them. That’s why I figured that these costs need to be planned into any retirement calculations. </p>
<p>I also really do like the idea of being able to have a place all the busykids and potential future families would be able to visit, stay or have nice holiday gatherings. I was thinking that it could all be managed in the future, once we got everyone through high school, college and graduate/professional school. We still have a very long way to go on that.</p>
<p>@silpat, I’m sorry, I didn’t read your post correctly. I thought all one level. Sounds like a nice home either way!</p>
<p>Your idea of a one level in a place that traditionally doesn’t build basements or 2nd stories is a great idea to pursue. Radiant heat in the flooring sounds great! I’d like that! The raised dog shower is quite an innovation that would really help the back.</p>
<p>I’m sure there are all sorts of features for every different hobby or need. It would be fun to research all the cool options and plan a dream retirement home!</p>
<p>We downsized for retirement. Our previous house wasn’t huge (2200 sq. ft, 4 br,2.5 baths). All bedrooms were upstairs. I was really sick of stairs and knew it would only get worse as we aged. </p>
<p>We built our retirement home to be as “senior friendly” as possible.
House is all one level. All doors are 36" wide. Walk-in shower with no threshold to step over and no door, just a 36" wide opening. All doors have levers instead of doorknobs. All sinks have hot and cold levers rather than the popular single style lever. Much easier to push/pull the levers if you have arthritic hands. The one lever style is much harder to adjust if old age/arthritis has caused fingers to gnarl/lose dexterity. </p>
<p>We expect this house to be our last. Our retirement house is 1680 sq. ft. 3 br/2baths/2 car garage. Only one step up to get in the house. Open living space w/ kitchen/dining/living room all in one space. Hardwood floors in living area/carpet in bedrooms. With loss of circulation in older people, extremities get cold and hurt. Carpet is more kind for bedrooms. Small open front porch/large screened back porch (10x20) opens right off the living area (no steps). We put in double glass doors to the porch they can be opened to lie flat against the house so we can enjoy the view, the birds and the boat traffic even if we couldn’t go out to the porch. It is perfect for DH and me. We love it. </p>
<p>Our two S’s have graduated from college and are on their own. Can’t imagine them ever living w/ us again. We moved to a small town/rural area. Not a place they would want to live in. </p>
<p>DH’s Mom (83) is the only parent still living. DH’s unmarreid sister lives just a couple of miles away from her. MIL would never want to leave her home (at the beach). SIL loves it there too so I suspect SIL will look after MIL’s needs in the long term. We are only a couple of hours away fr. them so will be able to help out when needed.</p>
<p>@newjersey17, I want to live in a place exactly like that. I liken it to a college dorm arrangement, where all your friends are either on another floor or in another building only two minutes away. Is the one your mother is living in part of a national chain? Which one?</p>
<p>My knees have gotten worse and worse over the years. During my first pregnancy, it felt like they were being held together by loose rubber bands. Since then, they have worsened to the point that stairs are avoided as much as possible. H has had one hip replacement and needs another, so stairs are a negative for him as well. </p>
<p>I like the single-floor garden-home concept for retirees. You still have a garage, a small backyard (for a garden and/or small grass area), and a patio for table, chairs, BBQ. Many have that Great Room floorplan which provides a good-sized gathering space for guests/parties. </p>
<p>too many condos only have a tiny area that barely fits a bistro set and small BBQ. this is fine, maybe for a second home, but too small for many who need more outdoor space.</p>
<p>Thanks @lxnaybob for talking about Boglehead books - I will read the Little Book of Common Sense Investing and Bogleheads Guide to Retirement Planning (both hardcover books ordered used via Amazon).</p>
<p>I like our financial planner - it is his job to follow investments and meets with us as we want to tweak our plan. Even though I have two graduate business degrees, our financial planner has an in to investment groups that are closed and have better returns - so better returns even with the fees. I also have one less major thing on my plate with our financial planner. My DD1 (age 20) has a Roth IRA with the funds she earned in 2013 that I help manage, and DD2 (18) will have 401 k through ING (summer intern job that will be recurring, so she has same choices as other employees on having money set aside - once she works 1000 hours for them, the company matches up to 4%, so having 4% taken out of her paychecks now so she is use to having the deduction already) that I will need to study and help her determine investment mix. After the year, will look to have DD1 and DD2 put amount into Roth IRA based on their earnings for 2014. They like to see their money build up, and they have their college already paid for with scholarship, prepaid college tuition plan and investment account.</p>
<p>If you can afford the tax to yearly shift money from IRA to Roth IRA it will help you in the long run as the gains in Roth when distributed are not taxable as they are with IRA.</p>
<p>With 401 k at husband’s employer that holds a big chunk of our retirement money, we have limitations on how it can be invested. We use the investment choices as best we can. He can not roll over until retirement or leaving employer.</p>
<p>I agree with @veryhappy about all the costs with changing a home in the same geographical area. We did so only once, and it was because the neighborhood was in a declining school district and crime was increasing, so we would not have gotten our money out with any additional home investment (additional bed/bath and maybe sun room addition was desired). We had convenience for 7 1/2 years (and a lovely in-ground pool, although underused by DH and me), and have lived now for 22 years in a home we built on the other side of research park, so in the best public school district in our area.</p>
<p>Another thing to think about is how to minimize the tax implications. We do have a pretty strong insurance presence in our plan.</p>
<p>It is all about peace of mind and making smart moves with your hard-earned money.</p>