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How much do YOU think YOU need to retire? ...and at what age will you (and spouse) retire?

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Replies to: How much do YOU think YOU need to retire? ...and at what age will you (and spouse) retire?

  • SOSConcernSOSConcern 3840 replies8 postsRegistered User Senior Member
    We will downsize or go to two smaller places (using a place in WI that is owned with H's brothers but two brothers may sell out), but we won't stay where we currently live. Will continue stay in this house until we decide on a move. Going through and getting rid of stuff - you do when you have to....you basically don't care enough about the stuff to move it. Will start some home updating once we are both retired and can focus on that stuff w/o the added working stress. May end up also with a small travel trailer for use with travel. However H traveled a lot for work (US and International) and really has an appetite for puttering around home. I may be traveling with others.

    I work in skilled care/rehab. I don't want to age in a retirement community. DD and I are both nurses, and I plan to live near DD and her family - we help them, they help us. Can afford bringing services in to me better than paying into a community. My dad died quickly of cancer at age 64; mom aged in her home and later with live in care - was a calm Alzheimer's person and had a strong will to live in her home - was on Hospice less than a week and died at age 78 (once brother told me of her decline I informed him about seeking hospice certification - to hospital ER for physician certification for hospice and was admitted for 4 days for IV antibiotics for suspected gall bladder infection; home with hospital bed and hospice care on Thursday and dead by Monday with siblings at her side). DH's 90 YO father is in skilled care and likes it because he likes being waited on. H's 90 YO mother is bound and determined to stay in their home, and has a good care giver that is there a lot and also has meals on wheels. She is living longer because she is happy at home. Also not really missing the extra strain and demands of her H.

    H and I are in fairly good health and both same age. Certainly things can happen, but always good to know you have enough in retirement to take care of expenses. We do have LTC insurance policies, that recently were modified for cost savings and if needed, we 'self insure' the rest of our care.
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  • shawbridgeshawbridge 5692 replies53 postsRegistered User Senior Member
    @thumper1, does that imply that all the other baby boomers also want to downsize and hence have driven prices on the smaller houses up above that of the larger houses?

    @my2sunz, we have been working on downsizing or at least moving for over a year. I'm totally incompetent as a packer but ShawWife is good (and fully recognizes my incompetence). We have a set of criteria that seem hard to meet in our town. Some of our criteria are nearly mutually exclusive. I'd like an expansive view and high ceilings or at least not low ceilings). ShawWife wants to be in walking distance of things (town or hiking). We need to build a studio on the lot of create an 800+sf art studio within the house. And, I'd like to keep the total package to no more than what we sell our current house and studio for. Thus far, friends and RE agents call us with beautiful houses that are bigger and fancier than our current house. So, we've been a bit paralyzed ourselves.
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  • HoggirlHoggirl 1646 replies195 postsRegistered User Senior Member
    I have written this before, but I love everything about our downsized living except once a year at Thanksgiving when I need two extra bedrooms instead of one. We are in a 935 sq ft condo across the street from the beach. I’d like to be across the street ON the beach side in another 3-4 years. Wouldn’t mind a 3BR, 2 BA, but would take just a larger 2 BR. Anything over about 1,300 sq ft would be too big to me now.

    We were in a 4,300 sq ft home for 11 years but our most recent home prior to the downsize was 3,450. We had a living estate auction and had someone come in, haul all of the stuff to their auction site, and sell it for us. Made ds walk through the house and claim anything he wanted which was only the Christmas decorations. I don’t miss one bit of anything we no longer have. It was just filling up space. I had held onto too many of my mother’s treasures for far too long. I donated my wedding gown to the Angel Gown organzation. I will admit that it was hard selling ds’s baby grand piano (we did that separately), but we gave him the option of storing it for him. He’s far too practical for that. That was the only thing that was difficult to let go of, but we knew we couldn’t keep it. Ds has a fantastic digital keyboard he took to college and still has. We did have to start with a 5 x 10 offsite storage when we first moved here (we have a small on-site storage unit in our building, but we had quite a bit more than it would hold). They kept raising the rates, so we initially went to a 5x5 unit and were then eventually able to even get out of that. Mailing ds sheet music in flat-rate USPS boxes over time at $20 a pop (along with some other of his things) was the much better way to go. I had three guitars - gave away one. And, we purged some more of our stuff that was in the storage unit, too.

    You have to be willing to let go of the stuff, though, and it took me a long time to get on board (dh was all about downsizing) with the idea. There are many books, blogs, etc. where one can read about the concept of minimalism. Except for Thanksgiving, I have ZERO regrets. NONE whatsoever.
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  • thumper1thumper1 73779 replies3216 postsRegistered User Senior Member
    @shawbridge

    I don’t think my housing cost/sale situation has anything to do with baby boomers driving up the small house market. Around here, most of the nicer smaller homes are newer and are in planned developments. They are simply more costly than what our one family home would get when we sell. We don’t live in an extravagantly expensive neighborhood, but it’s a nice family neighborhood...and houses do sell quickly. Our neighbors just sold their house in two weeks...they put the word out word of mouth and sold by owner. And got their asking price.

    It’s just that the asking price for this home would not buy what I want next...smaller, one floor, close to a town center so we can have one car only, planned community because we don’t want to do outdoor maintenance anymore, and newer than this house.
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  • colorado_momcolorado_mom 8892 replies78 postsRegistered User Senior Member
    So some couples we know that "downsized" did end up with newer / lower maintenance place ...... but the new pace costs them more. It can still make sense to consider downsizing. Just don't assume that you'll for sure save money.
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  • HImomHImom 34097 replies389 postsRegistered User Senior Member
    Yes, my relative calculated that if they "downsized" to the CCRC they are thinking of, it will cost a lot and after taxes, they're not sure they will actually net making money. They currently live in a lovely gated community and their home will gross a significant amount but they will have to pay taxes because buying into the retirement community isn't a residence to residence exchange under IRS eyes and other than the $500,000 married couple exclusion it will be recognized long term capital gain.
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  • HoggirlHoggirl 1646 replies195 postsRegistered User Senior Member
    There are a lot of reasons to hold onto one’s primary residence, and getting the stepped-up basis is certainly one consideration. For this, as is the case in many of the issues related to retirement, there is definitely no one-size-fits-all answer.
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  • CT1417CT1417 4344 replies22 postsRegistered User Senior Member
    @HImom ---what do you mean by the residence to residence exchange?

    I thought that was eliminated many years ago, and now homeowners simply need to have lived in a home two of the preceding five years in order to claim the $500K capital gains exclusion (MFJ) or $250K if single. Is there another wrinkle I don't know about?
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  • HImomHImom 34097 replies389 postsRegistered User Senior Member
    Buying in to the CCRC that my folks live in is NOT considered "purchasing" a residence. You are just purchasing the right to reside in the unit you are put into. The IRS doesn't consider it purchasing a residence and therefore you can't get the $500,000 exemption (my folks found this out when they moved from their home to the CCRC). I'm sure there may be some places where you are actually purchasing a unit and the $500,000 exemption may apply, but please check with the CCRC to be sure you aren't surprised.
    The CCRC my folks bought into will refund 90% or something like that to the estate after the people who purchased in die or leave the CCRC. Even if the value of the CCRC rises, they will only get 90% of whatever they paid to get into the community. Under some circumstances, some portion of what is paid MAY be considered as a tax deductible medical deduction, I've been told.
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  • CT1417CT1417 4344 replies22 postsRegistered User Senior Member
    @HImom -- I am still confused, or misinformed.

    I thought that one could sell a home and move to a rental apartment, but still claim the $500K capital gains exemption, as long as the two of the past five year residency requirement was met. I didn't think there was any need to invest the proceeds in another home.
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  • BunsenBurnerBunsenBurner 38586 replies465 postsRegistered User Senior Member
    The like for like home purchase went out of the window when the $500k was established. The $500k is not tied to any future RE purchase.

    https://www.nerdwallet.com/blog/taxes/selling-home-capital-gains-tax/
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  • HImomHImom 34097 replies389 postsRegistered User Senior Member
    OK, sorry, I guess my folks would have gotten the $500,000 exemption but still would have had to claim the remainder as capital gains because their house is worth a lot more than $500,000, even though they have to pay over $1,000,000 to buy into the CCRC. Sorry but the bottom line they can't reduce the capital gains by buying into the CCRC which will refund some of the money to the estate after the death of the residents.
    EXAMPLE: If the house was worth say $1.6M and basis was $100,000, they would have a $1.5M gain minus the $500,000 exemption for a married couple and they buy into a CCRC for $1M which is NOT purchasing a house per IRS, they still have to recognize all of the $1M capital gain. House is NOT EQUAL to buying into CCRC.
    By contrast, if they took the same proceeds and bought a $1M house, all the $1M would be like for like exchange and they wouldn't have to recognize any of that $1M capital gain.
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  • TdoesCollegeTdoesCollege 112 replies0 postsRegistered User Junior Member
    HImom wrote: »
    EXAMPLE: If the house was worth say $1.6M and basis was $100,000, they would have a $1.5M gain minus the $500,000 exemption for a married couple and they buy into
    By contrast, if they took the same proceeds and bought a $1M house, all the $1M would be like for like exchange and they wouldn't have to recognize any of that $1M capital gain.

    I don’t think this statement is true today. It used to be that way, but not the state of the rules currently.
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  • SOSConcernSOSConcern 3840 replies8 postsRegistered User Senior Member
    I have two pianos in our current home - one was my moms and one was mine - both spinet. Both DDs had a lot of piano and were very good at it - one did piano guild for 8 years (top talent for the last 7 years) and took lessons for 12; the other took lessons for 10 years. We still socialize with their piano teacher, who now has a 6th grader son. DD1's two children will also learn piano - so as soon as they are old enough, one piano will move to their home. IDK if DD2 will ever want other piano. Will see if I will live close enough to the grandchildren to keep a piano in my home.

    My brother just moved from Costa Rica to Switzerland (we are Swiss dual citizens). For just himself, didn't take a lot. When he went from US to CR, he didn't take a lot either.
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  • HoggirlHoggirl 1646 replies195 postsRegistered User Senior Member
    @SOSConcern - I do miss ds being able to play piano when he visits us. He, too, did Guild among many other piano activities and competitions, playing for 13 years before heading to college. However, he has only been here twice since we moved, and I don’t anticipate his coming here more than once a year for the time being. I am hoping if and when he ever marries and has a family that might up to twice a year. However, we are on opposite coasts, and I don’t see that changing.

    But, I get what you are saying so very much!
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  • Nrdsb4Nrdsb4 16806 replies156 postsRegistered User Senior Member
    even though they have to pay over $1,000,000 to buy into the CCRC.

    That's mind blowing to me. My Dad bought into a wonderful retirement community that has all levels of care (well, other than surgery/ICU) he expects to need in the future, expansive, beautiful grounds, robust social activities/community closeness, transportation support for outside doctor's appts. and social activities, on site banking, on site offices for visiting physicians and dentists, etc., for about $128 K. Granted, it's a 2 bedroom apartment rather than a house, but as he is single, it's perfect for him. I can't imagine what kind of retirement community would come with a 1 million dollar price tag!!!
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  • IgloooIglooo 8112 replies208 postsRegistered User Senior Member
    edited August 14
    I am guessing the difference may lie in the monthly fee. With $1M, maybe the monthly fee is much lower to none? How much does your father pay monthly? Where is this place? I could look into moving there.
    edited August 14
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  • Nrdsb4Nrdsb4 16806 replies156 postsRegistered User Senior Member
    edited August 14
    He pays about $2900 per month including daily meals in the dining room, which is like a regular restaurant with wait staff. He could pay less if he preferred to cook his own meals, but he eats 3 meals a day in the restaurant most days.

    @Igloo, based on your screen name, I don't think you'd be interested. It's in Texas! Hot hot hot in the summers. :D
    edited August 14
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  • patsmompatsmom 4176 replies504 postsRegistered User Senior Member
    HImom wrote: »
    By contrast, if they took the same proceeds and bought a $1M house, all the $1M would be like for like exchange and they wouldn't have to recognize any of that $1M capital gain.
    @HImom, that's incorrect. The whole $1M would be taxable. See IRS Publication 523.
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