Travel will probably be our highest portion of the budget beside the mortgage, IF we still have a mortgage at retirement.
Regarding RE, It seems a lot of people making long term decision for a short term problem - people buying vacation home, upgrading their current home, buying RVs, etc…which pushed the housing market up.
But how long will this go? How is it possible with 20-40% unemployment but it’s still a seller market? During the recession 2007-2008 with much less unemployment rate, people stop buying houses. Why not now with 20-40 % unemployment?
The people who are unemployed now are predominantly working retail and service jobs, and couldn’t afford to buy a house even if they were still working. This is different than in 2008.
Plus I think the crazy unemployment rate is perceived as a short term issue.
If you owned rental property (which I do) you’d be right to be concerned (which I am), especially if one of the more radical rent forgiveness programs manages to pass into law. These properties could see some big price declines if small landlords decide to dump them.
I can’t understand why the stock market keeps going up, but I’m happy it does.
If the housing market declines in our likely retirement location (research triangle, NC), we might consider buying now, even though we likely won’t move for a couple of years. (I doubt we’d do it, but it’s fun to think about).
My son asked me just today if we’d consider buying a vacation place. Our primary home was expensive for us, so we decided we would not go the vacation home route. BUT, if the market cooperated, we are free to change our minds.
I really just want our house to come close to the amount we paid for it 15 years ago, and the stock market not to tank. Those two things between now and 2 years from now would be great!
Sorry, I am curious - your house value now is less than what you paid for 15 years ago? i know the housing market was very high at some point but I thought if one compared to 15 years ago it would almost be higher now. But what do I know.
15 years ago was 2005, close to the peak, according to https://fred.stlouisfed.org/series/CSUSHPINSA . Of course, each local area may have peaked at a different time, and have a different magnitude of drop and recovery afterward. It is certainly possible that some areas have not had house prices increase to be higher than they were in 2005.
@Nhatrang, we purchased our home right as the housing market tanked in 2006. I am not bragging - we paid double what people paid 5 years before and I think only one house sold for more than ours. I think we are within 50Kish of the price we paid, FINALLY.
We sent our kids to public schools and we really like our neighborhood, but this house certainly wasn’t a good investment. I know people who have made 400K on their house after living there 4 years. That’s not us
Rental properties may suffer as lots of people bought condos at inflated prices on the assumption that they could fill them with Airbnb. They will be dumping those. That wlll probably affect the market for other rental properties. More rentals available, probably fewer tenants. ShawSon and ShawD who have many friends in SF, Brooklyn, Chicago etc. who have moved home and are going to let leases expire or are executing termination clauses.
The residential market seems to be having a short-term push at the high end for staycation types of properties. The WSJ or WaPo had an article about the massive demand this year (10x normal) to install pools in places like Westport, CT. High demand for family compounds out of the city.
I am awaiting the ABB exodus, I have a rental home in a tourist area and when I began vacation renting, I was house 42, last summer there were 400 options. I’d be ok with some of those bandwagon jumpers who thought it was easy money were to get out.
In 2008 the debacle was started with bad loans, so didn’t the loan availability dry up incredibly and quickly? IIR, there were a ton of interest only, variable interest short term loans, like 5 year term, which people would refi repeatedly. The ‘boom’ no loans to refi into. Part of the reason the market crashed then was that the RE risky loan packaging was the first issue. I think, too, that everyone now hope that this whole ‘thing’ is an anomaly and it will all pass quickly. That’s the only thing I can imagine.
I am finally retiring and couldn’t be happier! Started telling clients about 2 weeks ago, and have the letters ready to be mailed to current and the past few years’ clients. It feels weird, after almost 40 years, but the wonderfully warm and endearing comments from clients as I tell them has been so sweet and appreciated. Will be winding down over the next few months to help clients with the transition. But I expect most will be done within the next month.
DH is still working, and he really misses being able to go to the office (he hates working from home— as he says the kitchen is only 10 steps away!) He says he would like to retire, but he’d work just as hard doing volunteer things— he just wouldn’t get paid.
And like others, the health insurance is a big draw. I would go right on Medicare B if he retired, but he is younger than I and not eligible for Medicare yet. If the company allowed him to retire and take COBRA for the duration (they won’t- it’s too long a timespan) he’d probably do it, regardless of the cost.
The stock market has been unkind to our investments, but its better than it was a few months ago, and DH is feeling comfortable that it will be ok. We chatted about when he might want to look into the small pension he will get from his previous employer, and when I might consider starting to collect my social security (when we ran the calculator that several have recommended here, it recommended I start to collect it next month. I don’t really need it yet (not much to spend $ on these days!) , but don’t yet know how it will feel to have no income. I’ve been semi-retired for several years, and since mid-March COVID work-from-home, have been working at about 60% of that, so its been a sort of slow trickle down. Am still open to suggestions (pro/con) of waiting vs starting to collect SS. DH plans to wait until he is 70 and I don’t qualify to file on his while he lets his grow for several reasons. Thoughts?
I have said this before. Numberwise, the significance of waiting vs taking is overblown. The unknowables dictate the outcome, how long will you live and how well your investment will do if you take it now and invest. After those two unknowns, everything else makes a minor ripple. I did what’s convenient to me. I took it and got over the paper work while I was taking care of all other paper work related to retirement. It worked out well. I still don’t know when I will die but the market performed extraordinarily since I started SS even with the recent downturn. Investing SS proceeds covered more than the loss due to taking it early.
^ That’s what DH is currently thinking. We are typically the “if you don’t need it let it increase by 8%/yr” folks, but he is good at investing and hopefully can make more than that. I’ll be 67 next month, and can go either way on this. Eventually when DH retires and I switch from his insurance to Medicare B, the cost will come out of those SS payments anyway.
That 8%/yr thing is not 8% gain. The large part of it is your own money that was saved because you postponed taking the money out for 6-7 years until 72.
Some real math would help? - say if you collect SS from 65 vs. from 70. What would be the total in each scenario if you live until 80? Assuming you stopped working at 65.
Goops, sorry @jym626 I meant 70. 72 was the new age for something. So you have 3 years of saving vaulted in SS somewhere if you take it at 70. They are taking 8% of it and adding it to boost SS if you take it at 70. You can’t call that 8% return.
Speaking of real estate… Out of curiosity, checked Redfin. There is only a couple of homes for sale in our old ‘hood, located in a quiet suburb with big lots and room to spread out. A couple homes sold within a month of being listed… both over $1M. ? A small handful is pending. Usually, this time of the year, listings in that area are blooming and moving. Not this time. The inventory is super tight.
btw: for those that want to run a PV on when to take SS, I highly recommend Open Social Security, a free site. Use the advanced tab and play with the actuarial tables.
@BunsenBurner My friend is a realtor in my town and she said that in our area there are a large number of homes listed as coming soon. Sellers who want to sell are holding off on listing.
We have a lot of rentals and are seeing vacancies increase. I think some of it is what @shawbridge mentioned. Younger adults moving home or to less expensive areas as jobs dry up or if they see working from home as going on for a long period of time.
I don’t think “coming soon” listings are allowed here (or I have never seen them), although there are unlisted transactions brokered by realtors. The area I was talking about is not a popular vacation spot. Only 5% of homes are renter-occupied (per our title company). It probably reflects the flight to suburban areas that many described. In Seattle, condos in buildings with no rental cap were priced 15-20% higher than those in buildings with a cap. I am sure if the vacancies surge, many small landlords will bail out, so prices will likely drop by at least that much and then some more.
When dh retired a couple of years ago, we moved into our Florida condo which we already owned. Plan was to remain here and then move to something a bit larger that was hopefully on the beach side (we are on the intracoastal side) in about five years. I think I mentioned up thread that dh is now out of retirement having recently been hired by a start up. With him now working from home, I am finding our small space a bit too small for my liking. So, we are starting to do some looking. We are going to have to take out a mortgage to get what we want, something we haven’t had in a very long time. I’m kind of struggling with that, as I am extremely debt-averse. However, I am also weary of not having an in-unit washer and dryer. It would also have been nice to have been able to at least see the beach when our beaches were closed.
So, we are exploring getting pre-approved so we can be ready to go if we find something we like. We would sell our current place, but not before we bought something else so we won’t be making any contingent offers.
I really want to be in a “nicer” place, but I am still struggling with taking on any debt at all since we have been without for so long. Another option would be a more intermediate step, but there is part of me that just thinks we need to get what we think we can be happy with long-term.
Have any of you gone back into debt later in life? Editing to add that dh retired early. We are both mid-50’s so not THAT late in life (hopefully!).
