Karen Telleen-Lawton: Penultimate blow | Homes and Lifestyle


My book club has been reading and chatting together for over 30 years, as most of us had children in the same elementary school in the neighborhood. A generation later, our needs have changed. A few of us are considering the jump to retirement communities. What considerations go into the decision to leave a home long term?

Your unique situation may offer compelling financial reasons to stay, downsize, or move to a retirement home. Sometimes the financial “best bet” is your emotional inclination, while other times they are against the grain. Identifying the underlying issues can help you sort through and discern a “smart” decision.

Will Selling the Family Home Save You Money? Differences in cash flow can be assessed by measuring maintenance, cleaning and gardening expenses against monthly condominium or residential expenses.

Property tax and insurance are other cash costs that will usually be lower or waived if you downsize. Be sure to compare apples to apples, factoring in such amenities as food, medical, or athletic expenses.

Of course, cash flow is only part of the picture. Your home is an investment. When that investment is cashed in and the mortgage is paid off, you will be investing the proceeds in something with a different potential return. Real estate generally does well over the long term, but it is quite possible to lose money even in the “short term” for as long as a decade or more. (We did it !)

If your idea is to sell your home and gradually reduce the equity in living expenses, consider reviewing your finances with an expert. Your banker or financial advisor can help you determine a sustainable withdrawal level. A financial advisor can also help assess choices with major implications in life.

Even though financial factors seem to indicate an obvious decision one way or the other, it is important to consider factors that cannot be quantified. Your life and your priorities have changed since you moved into your current home. You can take advantage of the empty nesting space to spread out the projects. Now you have more time for digging in the garden or tinkering in the garage.

On the other hand, you might feel like you’re struggling in a space that’s too big. Maybe you want a “turnkey” condominium to get away easily. Maybe the kids ended up clustered in another area and you want to move out. Some move to a state with lower taxes for tax purposes.

Another factor to consider is the reallocation of your home’s value. Having a home to swap or rent is a great way to make travel more affordable. We have used Home Exchange for years and love to visit neighborhoods as ‘locals’ all over the world.

Whether or not you see yourself as sentimental, leaving a long-standing home can be emotionally charged. You celebrated major life events there. You have planted and maintained the trees that are now mature friends in your backyard. Children’s sizes are marked on the door stuffing in the closet.

Besides the sentimental reasons, there is the trick. Are you ready to face decisions regarding childhood art, books and other keepsakes of your children? If the children are not ready to take their things, will you clean them or carry them with you? Downsizing seems refreshing until you’re faced with some detailed choices.

Before the pandemic, we thought we would sell our house the next time the real estate market was hot. If we weren’t ready to move into our favorite retirement home, we would rent a spot in another part of town for a penultimate adventure.

Now we were grateful that we had not followed our impulse with a movement. We are comfortable at home making our own decisions. Yet our friends at the retirement homes are grateful to have been cocooned into the retirement life. Their lives were shorter than ours, but their meals were delivered, frequent COVID testing facilitated, and outdoor entertainment provided where possible.

There is no such thing as a good decision. As elders, however, we have the experience to enter this next phase with our eyes open. Test your favorite solutions by visiting and listening to your trusted friends. Do the math with an advisor. And see in the long term with an intelligent heart, so that your children don’t take matters into their own hands.

– Karen Telleen-Lawton serves seniors and pre-seniors as director of Decisive Path Fee-Only Financial Advisory in Santa Barbara. You can reach her with your financial planning questions at [email protected]. Click here to read the previous columns. The opinions expressed are his own.


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