We don’t look at SS claiming age in terms of break-even points, because we very fortunately don’t know when we’re going to die so can’t calculate that.
We look at it as a question of “what would be worse?”
Dying young and never even claiming SS? Well, that would be a shame, but wouldn’t be a financial burden, we’d be dead. We certainly have more than enough money to live in the style to which we have become accustomed up to age 70.
Living a long time, pension eroded by inflation, investments dwindling? If that happens, we’d be grateful to have significantly larger SS checks at 90, rather than look back and regret squandering it in our 60s and having a smaller check at 90.
@BunsenBurner , we would be thrilled if condo prices in the Seattle area dropped! Not holding my breath, though. I think King County needs a foreign investor tax like Vancouver enacted.
@Hoggirl , I think a mortgage is an acceptable form of debt in your 50s. Sounds like there’s a risk you will get extremely frustrated in your smaller place with a WFH spouse. Good luck with your search and when you find the perfect spot, change your avatar to a picture of your view so we can all live vicariously!
We are older than you @Hoggirl and have a small mortgage on the house / studio we are selling. Less than 10% loan to value on $1.7 MM + sale value. I always figured I was earning more than the interest rate on the mortgage so why pay it off.
We took out a mortgage on the new house (currently about 70% LTV) to bridge until we sold the old house. We will use the proceeds to pay down most of the mortgage but may retain some of the mortgage to finance our renovation so we don’t have to sell appreciated assets.
I don’t really have a problem because a) the interest rate would be low (and hopefully will go down when we refinance); b) I’ll still be earning as I don’t really have an interest in retiring per se (just adding more pro bono and less travel to the mix); and c) we have the capital to pay it off if we want to/need to.
If I were to die and if ShawWife would want to stay in the house without me, she would certainly pay off whatever mortgage remained. But there would be assets to make that happen if she wanted to do so.
I just looked. A new loan 15 year fixed is 2.62%. Our investments have historically been higher than our present 3% mortgage so we have felt that we are better putting any money into investments.
I would have no problems @Hoggirl buying a bigger place. My house is 2400 sq ft but I have an open concept first floor with a master and laundry room. 3 bedrooms that we do not use upstairs. I think the house feels like a nice one bedroom apartment, it will be great as it can be one floor living as we age. Internet is spotty upstairs so all WFH is done on the first floor. My husband has decamped to the kind of cut off dining room/office. Between his 2 huge monitors and his files all over the room. And the Skype calls (Microsoft team, whatever they are this week), I’m about to lose my mind.
I would definitely pay a mortgage to have a washer and dryer lol!
Thanks for all the thoughts! We would likely be around 50% - 60% LTV for the purchase. Does that sound reasonable for our ages? I would be more inclined than dh to pay a chunk of that down once we sold our current place. But, that’s just my anti-debt head rearing itself. However, we cannot afford to pay cash for what we truly want and think we could be happy with long-term. We could for one step up, but not the two that we ultimately want. Hope that makes sense. It isn’t even a stretch for us, but we have been in the “live below your means,” mindset for so long that it’s an old habit to break.
@deb922 - We probably sound like poor folks! Lol! Our building (as is the case with many others in our area) was built in the 70s and designed for seasonal snowbirds. Apparently back then, folks didn’t mind shared laundry for a few months out of the year. I have no standing to complain as dh does the laundry since he knows how much that bugs me.
@kelsmom - So true. DH and I have various friends and families that we’ll worry about when they retire. We feel fortunate that we’ll be comfortable, with just reduced travels if money gets tight .
@Hoggirl you definitely do not sound like poor folks!
I think your present condo is great, it sounds wonderful. We like where we presently are and it’s our retirement house. But we don’t need this much room, or we didn’t before the last 2 months. I have always been a great fan of small spaces. We bought our present house when both of our kids were in college and felt that it was important that they had a bedroom for them. They never spent any extended time here but it was available to them.
But I know I would tire of the lack of laundry space of my own. It was great for you for awhile and would have been fine if the world was different. But my personal opinion is that I would get what I really wanted now. It’s expensive to move, no matter what. We’ve never been lucky enough to make much money on our previous homes, so when we move, we want it to be for the long term.
But I have to say that my spoiled children wouldn’t even look at apartments that didn’t have their own laundry in the apartment. My kids have been so spoiled, I never once had an apartment with laundry. My kid has laundry, covered parking, granite countertops and stainless steel appliances lol!
My husband and I thought we won the lottery when we purchased a house with an attached garage and more than one bathroom!
@deb922, I’m laughing at your post above. Our kids sound similar.
Mine doesn’t have the stainless, granite or covered parking, but sure does pay a LOT for what he has. (Very close to Wash, DC and metro).
When he was in college and had only hallway laundry, he came home every other weekend to do laundry (or have his mom do it, in return for other chores).
I am struggling with what we “need” for a retirement home. We have always had enough bedrooms for our 3 kids. We are a blended family, and when we first got together, the idea that his (only) child would have to share anything with anyone was more than my husband could handle. They have always each had their own room, but do we really need a 4 BR place in retirement? That said, it seems like it’s harder to find nicer single family homes with fewer than that. Sometimes I think I like the idea of a condo or townhome that’s “lock and go,” but then during times like COVID, I’m happy we have all the space and the yard and the privacy we have. We also have cats, so will need someone to at least come take care of them. (We won’t leave them alone for more than 2 overnights without having someone come and give them food, etc.)
@Hoggirl, I’d definitely go for what you really want now, even if it requires a mortgage. Mortgage rates are pretty great right now.
Only thing I might worry about is making sure you can afford it if husband decides to give up the current gig.
@1214 - good point! So far, so good on the gig. It was “no-risk” for us anyway.
Our desire to accelerate our plans to move across the street has primarily been driven by COVID. If we are going to be stuck at home, I would like home to be a wee bit nicer and viewing the beach (not that there is anything wrong with the intracoastal view!).
@Hoggirl - after living without a mortgage for quite a while, we moved to the current house and chose not to sell any investments to pay all cash. That turned out to be a very smart move. So we now have a mortgage (15 year loan; low rate does not make sense to refinance). I hate being in debt, so the plan is to pay it off faster out of the regular cash flow. Without travel and tuitions to pay, we (fingers crossed!) can do it.
I would definitely pay more to be able to view the beach!!
We have a 3 bedroom place and thought with kids leaving for university and real life, it would be a great size for our empty nest years and beyond. However, we work from home, so needed office space, then my mother moved in with us for nearly a decade. I could handle that because it was always temporary. Now that she has gone, I find what was my space that became her space has now been usurped by the grandkids With nearby grand kids around all the time and faraway grand kids here for large chunks of time, it still feels very full. I guess i just need to purge more stuff.
When thinking about downsizing also consider grand children and the adult kids style of visiting! I hope I am in my forever home, but I also wish is was a little bit larger or at least had more storage.
We paid a stupid amount for our retirement home, which we are now permanently moved to, even though we are still working. Our mortgage is bigger than it ever was on our family house, but I have no regrets at all. We got what we wanted, the kids love it, it’s a great place to live.
It’s a good idea as long as its what folks want and can sleep comfortably at night paying for. We all have different ideas of what that is. I would love a bigger place with more storage but hate cleaning and love having no debt so we will be staying put.
@shawbridge - I’ve seen that rate advertised but haven’t found anyone willing to actually offer it. The best 15 yr rate we could find was 3.25%, which is only half a point lower than we have now. So we have held off
@hoggirl - we figured, get what we want and leave a smaller pile of money for the kids (although they’ll get a nice house out of it!). In the end, I wasn’t willing to settle for something less than I really wanted just because it was cheaper.
The best 15 yr rate here is 2.75 as of today, but with points and fees. Not worth the fuss of refinancing our current loan when the difference in the payment is going to be less than $100 a month, and we might pay off the balance before we break even on the fees.
With nearby grand kids around all the time and faraway grand kids here for large chunks of time, it still feels very full. I guess i just need to purge more stuff.