How Much Do You think You Need to Retire/What Age Will You/Spouse Retire: General Retirement Issues (Part 2)

Parent Cafe Parent Cafe
3264

All RE is local.

If yours is the only house in the 'hood with 2x6, the local market might not much care, i.e., pay for it. Do you have any documentation certifying the R-values in the walls? (Energy efficiency is key, IMO.) And don’t forget, a 2x6 structure means slightly smaller interior, i.e., useable living space.

My point is that a lot of home upgrades may not have much payback when you sell. Folks with solar panels are experiencing this very thing. Some buyers will pay extra for the ‘free’ electricity, but many will not. As a result, an appraisal might not count solar panels for much. (But that appears to be changing as panels are becoming more common and electricity is increasing.)

4 Likes
3265

The solar thing is something we have budgeted for. We will be here for a number of years more, we hope. Having a lower electric bill factors into how much we “need” to retire.

And yes, I realize we are paying for the solar panels which is sort of like paying for electricity up front.

We also anticipate that our next car will be an EV….and that seems to be a trend in our area as well.

5 Likes
3266

You are correct about local RE. Also supply and demand.

In one way we didn’t pay enough attention to dollars per square foot and should have had the architect redesign the area above the garage to add about 400 sq feet of unfinished space – that would have been terrific for our home value w/o adding a lot of costs up front. We actually are going to have a panel entry from one of our closets to have another option to access to that storage area for better use by us - DH is great in the workshop. He already is improving closet storage with extra shelving and storage solution ideas. Going up and down pull down stairs is something I want to avoid doing.

The home was custom built so the rooms are the dimensions on the plans. Rooms are not slightly smaller than our plans.

Home upgrades are typically what the homeowner wants - some translate, but in our market you are ‘competing’ against the new homes by general home buyers. The new homes within our desired school district are city annexed into the next county (so a good distance with commuting/traffic).

When we had our very high end neutral carpet laid, we were told it will never wear out - and in the rooms it is in, that is true. It looks as good as it did when it was laid. Hey if someone wants to rip it out and lay wood floor there, let them do it.

Often homes like ours are ‘snapped up’ by realtors or people who know a neighborhood and reach out prior to listing the home.

We have a $10,000 retaining wall/driveway ‘system’ (that was cost in 1992) - again one can build on a flatter area and avoid those costs, but not have a custom home designed for the lot. Our upper wall (brick faced with same brick as our home) didn’t need the heavy rebar poured concrete. This retaining wall/driveway was absolutely done right and it was cost competitive – DH watched the brothers/team of 5 with some of the concrete pouring/work and was amazed at how synchronized they were with the work.

Sized right and done well - we know of septic system failures. We never had an issue with septic tank and field lines because it was done right. We also have separate drainage from laundry room to not interfere with septic system.

There are so many things done wrong even with high end homes.

Some people (like us) do not like metal poles in our garage, and we have a very nice metal beam (so the support was there for a 2nd floor, which another home owner could design and build when it is time to replace the roof). The area above the garage would need its own HVAC system to keep that interior home area well temperature controlled.

When we completed construction, an appraisal was required due to going to a permanent mortgage out of a construction loan. The appraiser told us it would take 4 - 5 years for appraisal to come out well for our home (there were none comparable in our area and we were above the highest price home in our subdivision) - but now our street is completed with a few other custom homes and a large neighborhood next to us with high end homes.

3267

Let me see if I can express what I was trying to say without offending anyone. I’ve lived in the Cambridge, MA/greater Boston area and the Bay Area and New York. In Cambridge, I’m relatively plugged in and in pre-pandemic days, we went to parties/dinners and would talk to folks and hear what they were doing. One person is working on the cure to malaria, another is a very serious novelist whose novels are often NYT bestsellers, another is the CEO of a major teaching hospital or a university president, another is an economist working on international trade, etc. Lots of biotech folks. I’m in a book group with several Harvard professors at various schools. It is really interesting to ask what concerns them and what problems they are trying to solve. Similarly, when I am in Palo Alto or SF, lots of folks are working on fascinating companies – “I’m going to disrupt the X industry” or “I’m going to reduce the gender gap in wages” or "We make payments by the unbanked much less expensive’ or “We are helping utilities manage their systems in real-time more effectively given electric and renewables” or . The means are always tech-ish but folks are working really interesting stuff.

In New York and this was years ago so I’m not claiming that people are the same, we met very bright, high-powered people but somehow they were rewarded for being highly specialized. “I’m the world’s expert on the interaction of state taxes for certain kinds of transactions.” I think the very competitive business scene tended to reward that. We had a dinner party to introduce two sculptors one who was very successful – had glass/granite sculptures in plazas in NYC – and another who was a political sculptor and their spouses. After the dinner, each called and thanked us for the party and said “I’m a glass/granite sculptor and he’s a political sculptor and we don’t have anything in common” and “I’m a political sculptor and she’s a traditional sculptor and we don’t have anything in common.” We thought that was hilarious but somehow reflected what we experienced in NY. We were also sure that there were folks in NY that had the breadth and excitement that we experienced in Cambridge but we didn’t meet too many in NY.

As a further contrast, I remember going to one client years ago (I won’t say where so I cannot unintentionally offend anyone) but I used to prepare for my trips by boning up on the how the flagship state university’s football team was doing as well as their rivals as a lot of the conversations were about that. It was the social lubricant. They were very nice people who loved living where they lived. They told me where they lived was a great place to raise a family – safe and low cost of living. Interestingly, at the end of my consulting engagement in which I had fixed a big problem for them and the EVP of an $8 billion division (which was a big number back then) offered me a job but it would have entailed moving there. I don’t believe that there was any amount of money that he could legitimately pay me that I would have accepted (especially moving my artist wife who does not even understand football).

Different people just have different focuses/world views. I am used to people being really heavily involved in and often passionate about their work. In this company, people worked very efficiently from 9-5 but I used to joke that the most dangerous place in town was at the exit to the building at 5 PM. There was no passion about the work and when we needed to have business meetings in another city, these folks would not have them on Monday or Friday in order to avoid weekend travel. These people are incredibly nice people who just lived in a different world from the ones I like best.

I have been to other places where folks are very, very focused on outdoors/fitness. I’m impressed with this and I’m sure I’d live longer if I lived there but I don’t find the conversations as interesting.

I have worked as a consultant in probably 15-20 countries and have probably traveled in another 30 or so. When I travel, I love to ask people questions about their lives and learn a ton of somewhat idiosyncratic things about how people in different places think about the world. For my work, it is very helpful to understand how other folks think so I try.

3 Likes
3268

I think that there is definitely something to be said for “finding your people”.

3 Likes
3269

That’s not the point, which is that your rooms would have been slightly larger in a 2x4 build while maintaining the same exterior walls.

2 Likes
3270

Besides a future EV, one should also consider a heat pump if you HVAC is nearing the end of its useful life.

2 Likes
3271

Thats how I read the initial post. So don’t see a clarification as being really needed or helpful. And I expect at least to some it may have made it worse. Not offended by any of it. Or surprised. Visit this place enough and you see it alot.

In terms of the home improvement discussion, definitely need to look at market. In certain markets, just the improvement is enough and a better quality improvement won’t get any resale benefit. Not true with other markets. We replaced the windows in our first house. Went middle of the road (highest quality windows had R-values higher than the walls). But when it came time to sell, all anyone cared about was the windows had been replaced. We could have gone with the cheapest windows possible and it wouldn’t have made a difference. But we got use of them for a number of years so it was fine. Our current neighborhood, the quality of the improvement matters. If resale is important, its good to know the market of you house.

5 Likes
3272

Yes…we will be getting central air…and that will include a heat pump most likely. They have come such a long way…and will work well with our upgrade plans.

3273

That’s why I have mostly chosen internationally-focused work, even when it involved less cutting-edge issues, lower profile clients or smaller transactions. I find these clients and their cultures, contexts and worldviews fascinating.

As my D22 heads to college and we need to be home less, one possibility I am contemplating is do so 2-3 month stints in countries that I find interesting.

5 Likes
3274

Who cares about slightly larger when you have much better energy efficiency? A custom home carefully built is going to sell higher than higher end homes that maybe one builder has 5 or 6 different styled homes but subs out a lot of the work and really doesn’t oversee some of the slapped together nature.

For example, or neighbor’s house that burned down in one of these areas - the electrician cut corners on some connections and a fire started in the wall behind the kitchen counter area.

The next subdivision from us had expensive lots (base price of each lot was high and once sold had to be built within 2 years). A friend of mine bought a new house there, and it has very nice finishes. Her complaint ‘no guest coat closet’. Her next door neighbor had a master jetted tub that leaked, and she ended up having to have it all torn out and put in a soaking tub. Those homes are more square footage than ours and of course a lot more expensive to heat and cool - but their kitchens, master BR, baths are no nicer than ours. The cost of the lot caused bigger houses to need to be built in order to have that next price level of home.

3275

I would talk to various HVAC people first.

We really like our gas heat (both our HVAC systems were replaced since we built). Our lower unit is all outside. Our upstairs gas ended up going in an attic space with hall way ceiling return - so I added an upstairs closet and eliminated the on/off sound of the return blower. The air is not so dry and is very comfortable indoors - we find heat more comfortable from gas system.

Our area has the lowest electric rates in the country. But our gas is not a bad rate. On quite a few months our utility charges the base $10 gas fee with no gas used those months (we now have both water heaters electric).

Look at the overall picture.

We found excellent HVAC company and service - we are long time customers. The company we used when building - the man sold his business at his retirement.

3276

My husband designs these things…I think we have it covered.

And we knew that our heating system would need to be replaced as we retire…so part of our financial plan.

5 Likes
3277

Particularly if looking at adding or replacing the AC, since a heat pump is just an AC that can go in reverse. However, it may not be as effective or efficient below freezing, so a supplemental heater may be needed if below freezing temperatures are common.

1 Like
3278

That’s old technology. The newer, highly efficient HP’s can hold the indoor temp when the outdoors drops below zero. (of course, those units are more expensive to purchase, but when powered by solar panels…) Not to mention that all-electric is supposedly better for the environment than Nat Gas.

That said, always insist on a Manual J load calc.

1 Like
3279

That’s why I like Firecalc. You enter your savings & expected expenses, as well as the number of years you want them to last. You can enter your expected Social Security payments, as well as the year you plan to begin drawing SS. You can enter any pension payments in the same way. There is a “not retired yet” section, where you enter expected annual contributions to your savings & the year you expect to retire. When you run the simulation, you get a “% likely” for your scenario to not run out of money. It’s the best calculator I have found (and it’s free).

3 Likes
3280

I like some of the FIRE calculators.

3281

On a different note, my father recently passed away, and I know (hope greatly) that my mother will want to sell her house at some point, it’s way too big for her and it needs serious work. I mentioned this to our realtor, and he said that he would be interested in buying it himself. It is either a major fixer or teardown, you could probably build two houses on her lot. But this is one of the hotter real estate markets in the country, in a really good area. She won’t have problems selling this, around here there are bidding wars, and small houses selling for over a million. I’m thinking major red flags and conflict of interest here…why would she want to sell (at likely a discount) before something even goes to market? I know she doesn’t want to dip into her retirement funds before she needs to, so of course she would want top dollar.

1 Like
3282

If she wants to maximize profit, do not sell to the first offer, particularly if it’s to the RE agent. Interview 2-3 other agents and ask for a full market proposal to sell ‘as is’.

7 Likes
3283

busdriver11 - I’m sorry about your dad. Agree w/bluebayou - in this hot real estate market, your mom would benefit from talking to multiple realtors (and checking out recent sales on zillow) before committing to anyone.

On the retirement calculator idea - sad to say I didn’t understand the Firecalc! :grimacing:

This one is super simple (yay) - but I don’t know if it’s oversimplified to the point of no utility?

1 Like