What would u do?

[Chuck1674]

You have 400k cash and 5k a month pension
Get a huge house with a mortgage.
Medium house with smaller mortgage.
Patio villa cash and 200 k in the bank.
What are your ideas? Do the kids and grandkids visit as much as u thought. That factors into it.

[Dionysos]

You have 400k cash and 5k a month pension
Get a huge house with a mortgage.
Medium house with smaller mortgage.
Patio villa cash and 200 k in the bank.
What are your ideas? Do the kids and grandkids visit as much as u thought. That factors into it.

We just went through a similar decision as well, albeit different sums. We wanted to be free and clear while heading into our fun years and decided to buy a CYV for cash plus put some into improvements. After 20 years of Mortgages we always felt like we had a landlord. If it was not the bank it was the insurance company. Now we make the terms:coolsmiley:

Really depends on how comfy you are with your pension and SS.

[vintageogauge]

rent for a year and see how it feels and if the kids come down to visit.

[Toymeister]

You did not mention your age, this factors into social security. This can easily add 40% to your pension. This is a huge factor in any meaningful recommendation.

[Chuck1674]

No social security 56

[villagetinker]

OK, 6 years ago this was a no brainer, interest rates (for mortgages) was at 3% (15 years fixed), rate of return on investments well over 5%, and there was still a way to deduct home mortgage interest. ALL of this has changed, we took the mortgage, and have come out ahead but I doubt that same scenario would work today, too many things have changed, we can no longer write of home mortgage interest, home mortgage rates are higher, and investment yields seem to be lower. As I stated in the chit chat lounger, talk to your financial advisor, there are lots of things to consider.

[anothersteve]

I should have such problems!
Steve

[Boomer]

Unless you are retiring from a career that provides you with the benefit of health insurance for life for you and your spouse, you need to take a close look at what those costs could be — and be sure to project increases.

[OrangeBlossomBaby]

No social security at all OR no social security yet? That makes a difference. Certain municipal and other government employees are exempt and get a pension instead of social security. People in the private sector can get both.

If you'll be able to get Medicare when you're "of age" I'd say go for a cozy 3BD home, under $300k. Pay cash. Invest some of the rest to build up more, and sink a bit into something accessible "just in case." The $5k per month can handle all your usual expenses, including health care unless you have special circumstances. If there are no special health issues, you should be able to save some of that pension every month to add to your investments.

[valuemkt]

So Chuck .. you are 56 and retired. You have 5K pension income for life. You have 400K cash, and presumably ZERO IRA or 401K. I consider that unlikely. Maybe you;re not counting that because in most cases you can;t touch that until 59.5 (there are cases when you can). And you dont mention if you are married or not. (wife same age ?) So your social security full retirement age is 67, and your age 62 reduction is 30%.
So you made a decent living if you have a $5k pension, but its not clear if you have a full 30 years of solid earnings. So let's estimate your FRA (pls enroll in SS online to get real number) is $ 2500 / month. 70% of that is $1750. So in 6 years you'll be getting that, plus your wife (if u have one) will get a spousal benefit - lets say 850 for easy rounding. Thats $ 2600 more in 6 years, or 7600 / mo or around $ 91K / year. Some people would kill for that - others not so much.

If literally, the 400K is it - you need yourself an emergency fund .. and a home improvement fund etc. Not knowing where youre moving from and how big of a house you lived in, I would not buy a patio villa. I would look for a 3/2 courtyard villa or a smaller designer at a price point around $250-275K - perhaps north of 466 in the Spanish springs area. maybe even w bond paid. A 100K 15yr mtg at 4.5% is 765/ mo. So if your total purchase price is 300K with closing etc, you pay cash and have 100K left, take a 100K mtg and have 200K left. or some portion thereof. None of my business.. but if it were me, and i was a healthy 56 with what you described, Id still be working. but im sure theres more to the story

[Toymeister]

If you have health insurance I would concentrate on level income. I would get the estimate of your SS based upon your age that you will draw it at. 70% of your full benefit at 62, full benefit at 67. With this amount I would look at the draw down from your 400k until that age using that benefit amount. That sum that you need, let's call it your interim privately funded SS, should be deducted from your cash on hand. The amount that remains is what you have to work with. This will place the decision in laser focus.

Why do this exercise? You will want income now at age 56 not when you draw SS.

[ColdNoMore]

OK, 6 years ago this was a no brainer, interest rates (for mortgages) was at 3% (15 years fixed), rate of return on investments well over 5%, and there was still a way to deduct home mortgage interest. ALL of this has changed, we took the mortgage, and have come out ahead but I doubt that same scenario would work today, too many things have changed, we can no longer write of home mortgage interest, home mortgage rates are higher, and investment yields seem to be lower. As I stated in the chit chat lounger, talk to your financial advisor, there are lots of things to consider.

Yep...:agree:

My wife was still working as an independent contractor when we moved here and running the numbers, it made a lot more sense to take a mortgage @3.4% out on about 1/3 of house value...and therefore allowing us the write-offs.

The invested money that would have otherwise went to pay cash for the whole house, has returned substantially more than 3.2% over the last 7 years (opportunity costs)...so it was a no-brainier for us back then.

Under the new tax laws, and being in the longest bull market in US history, it may be time to 'noodle' things out again though...to see what makes more sense now.

In the long run though, I'm simply doing it for my kids as they'll be the ones benefiting...from my choices.

[Boomer]

If the only reason you are thinking of a bigger house is for visiting grandchildren, you might want to think again. You can have fun with your grandchildren in any house in TV.

A bigger house comes with bigger costs of a lot of things. Think about what works best for you and your day-to-day life in retirement.

If you have not already done so, you might want to sit down and look at a realistic budget that fits well into your pension and maintain as much savings as you can.

I know that buying a retirement house with cash seems like the ideal thing to do. But if that requires dipping into too much of your savings, maybe that is not as perfect as it sounds.

Try taking a look at what a comfortable house payment would be within your monthly pension amount and then you could dip into savings only enough for a down payment that would leave you with a highly manageable monthly cost. Grab a fixed rate without any pre-payment penalty for paying ahead or paying off. (I don’t think those penalties are around anymore, but be sure.) Factor in closing costs, etc. 15 years would be the best choice. Yes, you would be paying interest, with no write-off but equity would be building a whole lot faster. Only you and your wife can decide which home buying scenario makes you feel more financially secure.

I am going against the usual grain of paying cash if you can because I am not so sure taking such a huge chunk out of your savings is a good idea. A cushy savings might feel better, even if it means a house payment.

I know the tax law now has changed and I know the mortgage rates are up, but not like those of years ago, not even close.

Just run your numbers and talk with each other about what feels best. Do your homework. And, as you know, all this advice we are giving is worth exactly what you are paying for it. But, hey, it’s a start. :)

[OrangeBlossomBaby]

The kids and grandkids could always find a rental nearby, or a hotel. Stay at a vacation rental between the Villages and Disney, and split the week between the two locations.

[retiredguy123]

I would buy the patio or courtyard villa for about $200K. I have never believed in going into debt, and have done extremely well with that plan.

[Chuck1674]

Deferred comp. Can access at retirement. No ssn. Not against working. Will get a job but it will be nice to not rely on it. Medical incomes out leaving me with approx 5k pension. Taxable income. Leaving Jersey to avoid state taxes.

[Chuck1674]

Thanks. I have done tons of research and been to the villages 4 times already. Coming from high taxed NJ. I know there have been people in TV that started in Pv and moved up. I kind of like the idea of a paid off house. I also want a nice place for friends and relatives to visit. I also will work, but the money is much less in Florida.

[Chuck1674]

Yes value. Lots more to the story. My pension would be almost 9k a month but divorced wife gets her share. Pension is subject to equitable distribution in NJ. Yes will work but don't know at what yet. Plus there is the live in gf (that I pretty much support)that doesn't want to leave her adult kids quite just yet. I actually can't retire until Feb but I can dream. But again thanks

[Boomer]

I have assumed you are married.

I also assume your pension has a survivor benefit. If the survivor benefit involves making some choices, I assume both of you understand how it needs to work and have planned accordingly.

Or maybe you are not married. If so, never mind.

[Nucky]

Chuck, Just remember a Million isn't what it used to be. Adjust this statement to fit the things you have revealed and the things you have not. Don't worry about the Grandchildren now, live your life for you and all the satellite things going on with Family & Friends will work themselves out and worrying or planning for visits by buying a bigger house or going into debt doesn't sound good to me. Cash is King. Live Small.

The thing about The Villages is if you're healthy you won't be home that much anyway. I love our home and it is Modest and I've never been happier. We really went in a direction I never saw coming. From a new home around Lake Deaton to a manufactured home, go figure. We're from NJ also. PM me if you need any other help.

[Boomer]

Addendum:

Just read your post that was above my last one. Read it after I hit submit.

So now I know my assumption was wrong about your being married.

OK, then. I guess my work here is done. :)

[Boomer]

On a slow Saturday night, we mature, experienced types sure love to give advice to people, especially to someone who actually asked for it. So, hey, thank you. And good luck.

[manaboutown]

At age 56 you could have 40 years of life ahead of you. Even 20 years from now that $5K/mo might look like $2.5K, the $400K like $200K. Go for a patio villa and more income.

[OrangeBlossomBaby]

Chuck, Just remember a Million isn't what it used to be. Adjust this statement to fit the things you have revealed and the things you have not. Don't worry about the Grandchildren now, live your life for you and all the satellite things going on with Family & Friends will work themselves out and worrying or planning for visits by buying a bigger house or going into debt doesn't sound good to me. Cash is King. Live Small.

The thing about The Villages is if you're healthy you won't be home that much anyway. I love our home and it is Modest and I've never been happier. We really went in a direction I never saw coming. From a new home around Lake Deaton to a manufactured home, go figure. We're from NJ also. PM me if you need any other help.

Yup. Before our circumstances changed, we were planning on moving into something near Sumter Landing, maybe off O'Dell, which we found to be pretty nice, even if was newer, without the mature landscaping we liked closer to Spanish Springs. The price point, then, was around $240-260k for us.

Circumstances changed, and so did our "expectations." We ended up with a manufactured home like you Nucky - and we're REALLY looking forward to finally moving in (some time late this summer). The home has what we need, in a beautiful area. We'll be moving in before either of us is old enough for Social Security.

Circumstances are likely to change again in the next 10-20 years, and at that point we'll consider "upgrading." And who knows - we might love our neighborhood so much that our upgrade will be to tear down the manufactured home and build a solid construction home, in the exact same spot.

[Madelaine Amee]

Yes value. Lots more to the story. My pension would be almost 9k a month but divorced wife gets her share. Pension is subject to equitable distribution in NJ. Yes will work but don't know at what yet. Plus there is the live in gf (that I pretty much support)that doesn't want to leave her adult kids quite just yet. I actually can't retire until Feb but I can dream. But again thanks

This could be your biggest problem, she could eat into your income going back and forth to visit the kids.

[Aloha1]

OK, 6 years ago this was a no brainer, interest rates (for mortgages) was at 3% (15 years fixed), rate of return on investments well over 5%, and there was still a way to deduct home mortgage interest. ALL of this has changed, we took the mortgage, and have come out ahead but I doubt that same scenario would work today, too many things have changed, we can no longer write of home mortgage interest, home mortgage rates are higher, and investment yields seem to be lower. As I stated in the chit chat lounger, talk to your financial advisor, there are lots of things to consider.

Actually, you can still deduct mortgage interest on mortgages totaling up to $750,000. It's the taxes that were capped at $10,000. Of course this assumes you have enough deductions to make itemization a better deal than taking the new Standard Deduction.

[fw102807]

rent for a year and see how it feels and if the kids come down to visit.

:agree: Then a year from now you won't need to be asking this question.

[Toymeister]

Chuck, another detail needed:

Is this 5k pension indexed or partially indexed for inflation?

[petsetc]

I see this as a two part question, part 1 is house size, part 2 is mortgage (and Bond).

Part 1 - is a personal choice that you need to make, BUT it is not irreversible. Many here have moved several times as they re-evaluate their housing needs. It's easy enough to do here. So on part 1 - no opinion or advice.

Part 2 - mortgage and bond - this is an emotional and risk tolerance question. You indicate you have sufficient income to get by so why would you consider tying up your nest egg in an illiquid investment (house)? Over the course of our lifetimes, mortgages are still at historically lows (I remember feeling lucky to get a VA mortgage at only 11.75% in the early 80's). Think of mortgage interest as the opportunity cost you pay to have full access to your nest egg knowing that your expected return on the money exceeds the interest you are paying.

And I would never recommend paying off the 30 year bond during the first ~20 years, even though the all in interest(interest+fee) is in the high single digits. Referring back to Part 1 - if you decide to sell and move, adding the paid off bond to the list price makes you look expensive. Just another opportunity cost.

JMHO

[Chi-Town]

If the ex remarries will her maintenance payments end? That would make a sizable difference in your equation.

Sent from my SM-N960U using Tapatalk

[Bay Kid]

Life is short. I would do what makes us the MOST happy. You can't take it with you.

[TNGary]

Yes value. Lots more to the story. My pension would be almost 9k a month but divorced wife gets her share. Pension is subject to equitable distribution in NJ. Yes will work but don't know at what yet. Plus there is the live in gf (that I pretty much support)that doesn't want to leave her adult kids quite just yet. I actually can't retire until Feb but I can dream. But again thanks

Chuck, if you work at the current job you will accrue years toward your pension and since divorce is over you would not have to give you X any share of that amount, plus being at the top years of earning the math adds up quickly. Your thoughts??

[Villageswimmer]

I would buy the patio or courtyard villa for about $200K. I have never believed in going into debt, and have done extremely well with that plan.


+1. You’ll sleep better at night without debt. Good luck in making your choice.

[villagetinker]

Yes, I did misstate the mortgage deduction, should have said I cannot deduct it any longer (interest rate is too low, a very good thing!!), but I still stand by my initial advice, talk to your financial advisor. There have been several good points and suggestions made here. Now go to to your advisor with these, and discuss what would be best for your. Be sure to consider future medical costs, taxes, etc.
Good luck with your quest.

[Dr Winston O Boogie jr]

I'd buy a three bedroom cottage home for around $200,000.
About Our Homes | The Villages (https://www.thevillages.com/our-homes/Cottage%20Homes/models)

[Nucky]

Get ready to protect your nest egg cause if you ever revealed your situation in person your Dance card would be full! Your gonna be great either way you go. Get ready to have a nice life again after the pain you've been thru or caused. A new fresh start. A new chapter, a fresh canvas. Don't screw it up trying to flash $$$ cause nobody down here cares. Good Luck.

Go with Modest, it's so much easier. We are gonna bump it up a notch in a couple of years but only a little bit. No Stressing over $$ Monies $$

[BK001]

Here's an interesting perspective on mortgages:

Why you shouldn’t pay off your mortgage sooner: a loan officer’s perspective. (https://medium.com/@isayahldurst/why-you-shouldnt-pay-off-your-mortgage-sooner-a-loan-officer-s-perspective-f0c2b5effd10)

[retiredguy123]

Here's an interesting perspective on mortgages:

Why you shouldn’t pay off your mortgage sooner: a loan officer’s perspective. (https://medium.com/@isayahldurst/why-you-shouldnt-pay-off-your-mortgage-sooner-a-loan-officer-s-perspective-f0c2b5effd10)
With all due respect, this perspective is total hogwash. I have been debt free my entire life, and I have saved more money than I could spend in 100 years. In my opinion, you don't become rich by going into debt.

[BK001]

With all due respect, this perspective is total hogwash. I have been debt free my entire life, and I have saved more money than I could spend in 100 years. In my opinion, you don't become rich by going into debt.


I too agree with a "debt-free" lifestyle, and, to a large extent, is how I've lived my life as well. But just another point of view to consider.

[ColdNoMore]

Here's an interesting perspective on mortgages:

Why you shouldn’t pay off your mortgage sooner: a loan officer’s perspective. (https://medium.com/@isayahldurst/why-you-shouldnt-pay-off-your-mortgage-sooner-a-loan-officer-s-perspective-f0c2b5effd10)

Good article.


I too agree with a "debt-free" lifestyle, and, to a large extent, is how I've lived my life as well. But just another point of view to consider.

While minimizing revolving credit (ie: high interest credit cards) is almost always a good idea, someone would have to be pretty dumb to avoid all debt....while ignoring (or not understanding) 'opportunity costs.'

If I can use someone else's money at a low interest rate (1% auto loans/3% home loans/etc.), while my own investments are compounding at three to five times the amount of the loan interest...it would be dumb not to do so.

Given that most large corporations often borrow money, even when they have the cash on hand...should be a clue.

Opportunity Costs(poke here) (http://themoneyadvantage.com/opportunity-cost-the-invisible-cost-of-financing/)

The cost of paying cash is the cash itself. The opportunity cost of paying cash is the interest the cash could have earned, had you kept it, that you no longer get to earn because you don’t have the cash.

We humans have a funny way of looking at loss. If you had something and then lost it, we consider that a loss. But if you had the potential to get something, and then lost that potential, that type of loss is a bit harder to wrap our brain around.

The interest you pay when you finance is money you had that’s being taken away. That’s why it’s an apparent loss.

What’s harder to see is what your cash could have done for you, had you kept it.

Then again, there are those who like to keep their cash under their mattresses...and believe they are financial genius' also. :oops:

[bovelsky]

I was in a similar situatuion 6 years ago when I retired. I have a frederal pension, will not get Social security, Have some IRA money socked away but had cash available from the sale of my house. I chose a designer home with a 2 and 1/2 car garage and a small mortgage. I can afford the small mortgage on my pension with ease and did not make the mistake of downsizing too much. Biggest issue here is storage because of no basements. Too many folks choose a small garage and the move again to a larger house in 3 years. Area is key here as well. Make sure you know where you want to live first. Try renting for 3 to 6 months. Get the lay of the land and see what your expenses will be in retirement so you can make the right house decision for you

[Viperguy]

Go back to work and save some more.

[BK001]

Good article.




While minimizing revolving credit (ie: high interest credit cards) is almost always a good idea, someone would have to be pretty dumb to avoid all debt....while ignoring (or not understanding) 'opportunity costs.'

If I can use someone else's money at a low interest rate (1% auto loans/3% home loans/etc.), while my own investments are compounding at three to five times the amount of the loan interest...it would be dumb not to do so.

Given that most large corporations often borrow money, even when they have the cash on hand...should be a clue.

Opportunity Costs(poke here) (http://themoneyadvantage.com/opportunity-cost-the-invisible-cost-of-financing/)



Then again, there are those who like to keep their cash under their mattresses...and believe they are financial genius' also. :oops:


Yes. There is debt and there is debt. That's why I have always taken advantage of "zero" finance deals on large appliances even though I always had the money to pay off in full. For us there was never the danger that we would blow the money. But not so for everyone. I don't think we've paid any interest (other than mortgage) in 30 or 40 years.

[noslices1]

Keep all the money and just rent. Landlord will have to make all repairs and with a one year lease you can change residences annually if you like. Rent shouldn't be more than $1000-1500 a month, but no amenity fee or property taxes

[ColdNoMore]

Yes. There is debt and there is debt. That's why I have always taken advantage of "zero" finance deals on large appliances even though I always had the money to pay off in full. For us there was never the danger that we would blow the money. But not so for everyone. I don't think we've paid any interest (other than mortgage) in 30 or 40 years.

You make an excellent point, that if you are using someone else's low/no interest loans, you need to ensure that you're making the money you didn't spend...work for you in other opportunities.

It makes no sense to use the cash saved, to purchase additional items that are often not a 'need,' just a 'want'...instead of investing it.

It's analogous to using excessive tax withholding as a 'forced' savings account...for those that don't trust themselves not to spend it during the year.

Sure, it's nice to get that refund from last years taxes, but a person has to realize that you're basically giving the government a tax free loan...for the entire year.

Whereas, people could have been using that additional money from each paycheck, investing it and they would have more money for the entire year...than your tax refund alone amounts to.

"Compounding interest"...is a wonderful thing. :cool:

[OhioBuckeye]

You have 400k cash and 5k a month pension
Get a huge house with a mortgage.
Medium house with smaller mortgage.
Patio villa cash and 200 k in the bank.
What are your ideas? Do the kids and grandkids visit as much as u thought. That factors into it.

As a thumb of rule, normally your present home goes up in value so if your a senior like me most of us should own our present homes so for me a mortgage at 70 yrs. old is out of the question so I've paid cash for my next home. In fact sorry to say we just sold our home here in The Villages & moving out of state & yes I'm paying cash for my newly built home that we're moving into. This is just me, but to take out a mortgage is money lost & I would just be adding to the price of my new home. Besides if I would dye I don't want my wife or kids to have a mortgage. So to answer your question about the the kids & grandkids, that's why we're moving.

[richs631]

We just went through a similar decision as well, albeit different sums. We wanted to be free and clear while heading into our fun years and decided to buy a CYV for cash plus put some into improvements. After 20 years of Mortgages we always felt like we had a landlord. If it was not the bank it was the insurance company. Now we make the terms:coolsmiley:

Really depends on how comfy you are with your pension and SS.
In the same situation with similar numbers. Fairly safe investments will bring you much more interest to offset the interest your paying on the mortgage As long as your comfortable making the mortgage payment, it’s a no brained. My mortgage interest is approximately $450 a month and interest on a 401K with $400,000 is about $6,000 per month

[ehendersonjr]

Family visits more often, especially after their first visit and they find out what The Villages is really like and how close we are to other Florida attractions. We’re booked up until July right now. My general rule of thumb for finances is to use other people’s money when it is less expensive than using my own.

[Lynndise]

We have a villa and love it. Not too big or small. Grandkids come rarely because of sports and other things at school. They only get 1-2 weeks vacation and parents the same. Go with a Villa and spend your money on yourselves while you can...putting some in the bank for “backup”.
Good luck. I’m sure you’ll make the right decision for yourselves!

[jebartle]

You have 400k cash and 5k a month pension
Get a huge house with a mortgage.
Medium house with smaller mortgage.
Patio villa cash and 200 k in the bank.
What are your ideas? Do the kids and grandkids visit as much as u thought. That factors into it.

Skip the typical Villager that down sizes twice b4 settling in home and go straight to having fun!:MOJE_whot:

[david14221]

Buy a 3 br house. 30 yr mortgage. Come here 4 months...sept thru dec. Rent it out jan thru april. Do that until you collect social security and/or can get to ira or 401k money at 59.5...assuming you have that investment. Depending on mortgage rates, can refi to 15 year mortgage or add a few hundred each month to payment to cut down the number of years left on mortgage.

For better responsed, we really need more info.

[mikeritz53]

Look into a Reverse Mortgage to Purchase. All you pay are closing costs and you can keep your money in your Investments. With the Reverse Mortgage you have no Monthly Mortgage Payment (still have R.E. Taxes and Homeowners). This allows your monthly income to go a lot father and you still have all your 401k as a cushion.

[MEbner2805]

Buy a reasonable 3br house for under 360 and pay cash and save money for unsuspected medical issues as you will need it in time. You will want money to travel as well. Most don’t need a huge home to be happy here.

[Chuck1674]

No cola at the moment but they are working on getting it back. Cost of living adjustment.

[Don&Judy]

Get a mid-size home with a small mortgage. There's no reason to have a large house here. It's a waste of money. And no, the kids and grandkids don't visit as often as we expected. They're busy and live far away.

[Chuck1674]

Chuck, if you work at the current job you will accrue years toward your pension and since divorce is over you would not have to give you X any share of that amount, plus being at the top years of earning the math adds up quickly. Your thoughts??
No pension is already split. But the longer I work, her share goes down, but I am not vindictive. Some guys stay until 65 to spite the ex, just want to be free. Alimony stops when I retire.

[lindaelane]

Does your pension have a COLA? (few do) If not, keep in mind that if you are 65 now, at age 83 with 2.2 % (conservative estimate) inflation you will need $7,500 to buy with $5,000 buys today.

Do you know someone who is good with spreadsheets, or can you make a spreadsheet? Its not that hard (if the know how is there) to make a sheet projecting your annual income and assets into the future. It won't be a "perfeft predictor" but you can input things like what you think inflation will be, and what you think your investments will average to see where you may be.

[Chuck1674]

Get ready to protect your nest egg cause if you ever revealed your situation in person your Dance card would be full! Your gonna be great either way you go. Get ready to have a nice life again after the pain you've been thru or caused. A new fresh start. A new chapter, a fresh canvas. Don't screw it up trying to flash $$$ cause nobody down here cares. Good Luck.

Go with Modest, it's so much easier. We are gonna bump it up a notch in a couple of years but only a little bit. No Stressing over $$ Monies $$
Yes I am not flashy. I bought a 100k fixer upper to keep kids in their school system. Not they are finishing college and its time to move on. Looking forward to the fresh canvas. Plus I am a softball junkie. I will also enjoy playing more golf. Thanks all.

[Chuck1674]

+1. You’ll sleep better at night without debt. Good luck in making your choice.
Yes I agree, just wish the PVs came with the big garage.

[bovelsky]

You must be 62 for a reverse mortage. I believe he stated he was 56

[pqrstar]

. . . As long as your comfortable making the mortgage payment, it’s a no brained. My mortgage interest is approximately $450 a month and interest on a 401K with $400,000 is about $6,000 per month

That return on your 401K is 18% or $72,000 a year???????

[Villageswimmer]

That return on your 401K is 18% or $72,000 a year???????


Hey, where do I signup?

[jfkilduff]

This is good advice !!! Give me the $400K or by a nice RV. Move in with the kids and TRAVEL between FL and the North or wherever your heart desires. Enjoy, jfk

[va11055]

Number one priority is your health not necessarily your age. My 93 yr old neighbor is out repairing his riding mower on his knees as I am writing this. That said, also everyone is unique in their selections. If your health is good!!, then go with the 2nd choice as you will have to downsize eventually. The 3rd choice (the villa) is an excellent choice if you want to just be upkeep free. This is my 2 cents worth!! Namaste

[ts12755]

Id take smaller house cash... Dont waste money on interest making bankers wealthy. Kids and grandkids came a couple times the first year and have not been back the last two years.

[rjgnj321]

Smaller house with cash in the bank is the way to go

[valuemkt]

Chuck, with all due respect.. you can substitute my earlier post with a reasonable contribution from GF.. You already sacrificed half your pension to your ex. At this stage of life, while love is a many splendored thing, I wouldn;t take a rent free move in for any reason - and I would make sure your new house is in some kind of trust that your designated heirs totally control ... Just sayin

[retiredguy123]

Chuck, with all due respect.. you can substitute my earlier post with a reasonable contribution from GF.. You already sacrificed half your pension to your ex. At this stage of life, while love is a many splendored thing, I wouldn;t take a rent free move in for any reason - and I would make sure your new house is in some kind of trust that your designated heirs totally control ... Just sayin
I remember a comedian, who just got his fourth divorce being asked, are you going to get married again? He replied, "No, I think I'll just find a woman that I don't like and buy her a house".

[DPayton]

Don't count on you kids. We are here almost a year and still waiting.
Do what is best for you!!

[thetruth]

You have 400k cash and 5k a month pension
Get a huge house with a mortgage.
Medium house with smaller mortgage.
Patio villa cash and 200 k in the bank.
What are your ideas? Do the kids and grandkids visit as much as u thought. That factors into it.

The same thought comes up with all the do you have enough to retire guides.

All you need to know is when you will die. The rate of inflation till you die. The exact return on your investments till you die. The cost of your death. AND SO MANY MORE UNKNOWNS. Realize our government-how many trust the government-says they desire a 2% rate of inflation. At 2% rate of inflation in 36 years you will need two dollars to buy what a dollar buys today. History, the government has never held a 2% rate of inflation. Chance of them doing it this time?

Since, Nixon our currency is not backed by GOLD or SILVER, it is backed by the full faith and credit of the United States.

It can't happen here. It won't happen here. People in Germany in the 1930s said the same. More recently, people in Greece, Venezuela, Brazil are, have said it can't happen here.

MY VIEW, you are always better off having more than you need to pay your cost of living. A mortgage. Should our dollar get trashed, you can and will pay your mortgage with far less valuable money. INSANITY-they cannot hold age against your for a mortgage. A person 90 years old can get a 30 year mortgage.
He/she will be only 120 when they pay off the mortgage.

In the end. What YOU should do it is not an easy question but it is a question that YOU should make with some professional advice.

From US, perhaps like the old Ann Landers column. If we direct you to make the wrong choice for YOU, we will say OOPS sorry about that-NO SKIN IN YOUR GAME.

[Chuck1674]

Of course, I will do my due diligence with professionals. But who better to ask then people who are already doing it. The longer I work the more I will have, my health is decent at the moment but will get much better down there, I am leaning towards pulling the plug in a few years and continuing to work down there. Can't wait.

[Chuck1674]

I enjoy hearing what others have done, and what would u do again or what did u learn from your mistakes. Cheers

[pete525]

I would agree with others; a courtyard villa with 3 bedrooms, 2 baths.
Good luck with your decision.

[Toymeister]

Well Chuck,
Deferred comp is typically taxable. Let's just say that you have presented the after tax amount and this includes any home equity that you have. In other words 400k is it. With no SS, you are solely reliant on your non inflation indexed pension of 60k. Let's further assume your ex will outlive you. So you do not plan on "getting back" her portion of your pension.

This 60k is a declining payment due to inflation. With this information as a baseline I would under spend on the home and set aside 6-12k annually from your pension until your mid sixties. This can then be spent down in the next 10-15 years. This will provide a reasonably even income until your later 70s when, several studies have proven, your spending will decline naturally.

[Slmtraveler]

Chuck, My husband and I are in the same scenario. We paid off our home and it's the best feeling in the world to be debt free. I would recommend paying cash for the house and stop being a slave to the bank. We are retiring early because we've been very careful with money. We will eventually move to The Villages after traveling around this great country and will only do it if we pay cash. Good luck and just remember there will always be houses for sale in The Villages, so don't settle on something you don't like. The prices are under 200k even for a new home and they seem big enough for us with a 2 car garage. Really think about how much room you will really need. We are planning to play when we move there, not clean a big house! If you have lots of guests, a pull out couch or Murphy bed should work. If not, they also have hotels. Good luck and great job on the finances!

[Slmtraveler]

With all due respect, this perspective is total hogwash. I have been debt free my entire life, and I have saved more money than I could spend in 100 years. In my opinion, you don't become rich by going into debt.

I agree completely! We also live debt free and it's the best decision we've ever made.

[ColdNoMore]

SNIP>... INSANITY-they cannot hold age against your for a mortgage. A person 90 years old can get a 30 year mortgage.
He/she will be only 120 when they pay off the mortgage....<SNIP

"Insanity?"

Really? :oops:

And here I thought almost everyone understood simple financial terms such as... 'down-payments,' 'appreciation' and 'equity?' :ohdear:

[kpd3062]

I’m in a very similar situation Chuck and am having the same dilemma. Almost exactly same age, deferred comp., city pension when I retire in about a year and a half. We have visited TV three times and have a house rented in July. I still haven’t made a decision yet , I think it will come down to the mortgage rates when we buy. I d love to talk more since we are in a similar position. I’m new to this site is there a way to private message to exchange contact information if you are interested. Let me know Ken

[THUNDERCHIEF]

you have 400k cash and 5k a month pension
get a huge house with a mortgage.
Medium house with smaller mortgage.
Patio villa cash and 200 k in the bank.
What are your ideas? Do the kids and grandkids visit as much as u thought. That factors into it.

i think you need to figure this out yourself. Its your money and your business. No one knows your circumstances but you

[wek5048]

PV all the way............

[JohnN]

I'd get a 3BR, low maintenance courtyard villa. I've had a patio villa and it was too small, especially with visitors. You can get a very nice one for $300K and save the rest. That's what I did, anyway, and I'm quite happy with it.

[manaboutown]

I agree completely! We also live debt free and it's the best decision we've ever made.

If we live long enough most all of us reach a point in life when if at all possible we want to be debt free.

I reached that point a few years ago and essentially made it so.

[Transplant]

OK, 6 years ago this was a no brainer, interest rates (for mortgages) was at 3% (15 years fixed), rate of return on investments well over 5%, and there was still a way to deduct home mortgage interest. ALL of this has changed, we took the mortgage, and have come out ahead but I doubt that same scenario would work today, too many things have changed, we can no longer write of home mortgage interest, home mortgage rates are higher, and investment yields seem to be lower. As I stated in the chit chat lounger, talk to your financial advisor, there are lots of things to consider.

You can still deduct mortgage interest on mortgages up to $750K, 15 year rates are 3.5% and the first quarter of this year a return on a 60/40 portfolio earned 9%.