We lived on a barrier island in Florida for six and a half years. For various reasons we decided to move back to dh’s home state. One among those reasons was concern about hurricanes. We sold in July, and Helene hit our former area hard two months later. It felt like we’d won the lottery.
Like your mil, our condo building was elevated with only garage space on the ground floor. So actual damage (which was primarily from surge) was minimized.
Among other reasons for leaving Florida were the costs of living there had increased dramatically which pretty much offset the fact that there is no state income tax. Property taxes, HOA fees, and insurance costs had gotten incredibly high. As one example, our auto insurance here is 40% of what we were paying in Florida.
Many people in our area did not carry flood insurance. Even on one story single family homes. Many of these smaller beach places have been family-owned since the 50s and 60s and have been passed down through families. If there is no mortgage, no insurance is required. Even if homeowners had it, little rebuilding is happening even two months after the fact. Substantial damage inspections (SDI) are happening very slowly. A certain amount of damage as a percentage (> 49 or 50% - depending on the area) of the value of the home NOT including the land requires a razing of the structure and building up 14 feet. Anything > $1,500 requires a building permit. They aren’t being issued until all he SDIs are completed. Many people will walk away - especially for homes that are second places. Many people (especially seniors) won’t have the resources to raze and rebuild and will sell, “as-is.” A land grab is very much anticipated. I realize this isn’t directly an issue for your mil, but I do think values/prices are going to drop. Insurance is going to be harder and harder to obtain and cost more and more.
I would not wait until April to sell. I would list in January to sell during snowbird season. We sold in the summer, and were able to take some nice appreciation out of our place tax-free since we’d lived there > two years. But, we would have done even better had we sold three - four months earlier. I’d spruce it up/stage it and fix the elevator. Having an elevator is a big plus in our former area becuase there are so many retirees.
Air Bnb a place each year for 4-6 weeks and let somebody else bear the costs and risks.
if they’ve self-insured all these years, they definitely should start looking around for insurance brokers to place a policy. Insurers might require a new roof, repair/replace the elevator to code, etc, before underwriting. All stuff that might take awhile, and the last thing mom wants to do is to put the place up for sale next year only to find out that the potential buyer can’t obtain HO insurance until xyz is fixed/replaced.
I have thought about climate change and how it would affect our relocating.
Our current home backs to greenbelt and is in a floodplain. For a couple of years after we paid off our mortgage, we continued to buy flood insurance. And then one year, it tripled, and we decided against renewing. We have had some massive flooding in town, but no water ever got near our house, despite a raging creek behind it. The way the usually-dry creek flows we are just lucky. Neighbors well downstream have flooded multiple times. I understand that we are rolling the dice, but right now I feel confident in our decision. As building continues in the area, we might change our minds.
When we sell, we will move near one of the kids. In the most likely scenario, I will be @FallGirl’s neighbor as that state has been touted as more climate-proof. I absolutely would not like the cold winters, but maybe they will be getting less cold. The heat people complain about there in the summers feels great to dh and I!
Several thoughts I will share, but definitely need to read carefully some of the recent posts.
DH and I do have LTC Insurance policies we have had for a number of years. We pared them down some to keep the annual premium from rising. Insurance company is offering a ‘buy out’ of our policies and another option called “Increased Contingent Non-forfeiture” ICNF. The buy-out is a one-time cash payment of $52,500 (for each of our two policies) which is based on the amount of money currently held to cover future expected benefit payments. The ICNF would be for no future payments, with a new maximum lifetime benefit of $42,122.19 and same daily maximum benefit of $327.44/day. No - we are keeping the policies; the annual payment is reasonable, and the more we age the more likely we are to use/need these policies. I am sure some will be tempted to take the deal - they have a ‘good use’ for some ‘quick cash’.
I do think one of our stock diversified funds has some foreign investments, but we stay pretty much with the US and what we know. Looking at risk and volatility, and depth of knowledge about some of these foreign investments options have us keeping close to home. Think risk/return. What one knows and with the foreign investments how much info do you really have access to.
On other - thinking about what you need to retire and where you might want to be with retirement. Controlling variable expenses and knowing what expenses may be higher than you are use to, and also expenses like flood insurance (mentioned above). Son-in-law’s brother needs flood insurance where he lives (and he has used it - twice due to hurricane and then heavy rains hitting already soaked grounds causing second flooding - in LA – was just completing repairs when damage with same areas fixed on the house). He may not be aware of another flood insurance protection option (to evaluate which coverage to have). Yes, NFIP (FEMA) insurance is high.
Electric rates can vary a lot. I had this info on another thread (under ‘other’) but it was not considered relevant enough to the topic. So with retirees, considering this as a cost with budget - and how it might vary quite a lot. DH just asked me about our electric rates, as he was watching something on the Internet where a fellow in Massachusetts was designing/building/considering a home that is self sustaining. Also realizing that some of the tax laws/credits might be going away. DH said he was referencing $0.60 a KWH. We have TVA power and pay $0.0977 KWH (we are in N AL). Birmingham AL and south of Birmingham is covered by Alabama Power, higher energy cost but I don’t have their rates. I believe there are 4 states that have TVA power, but varies on how much of each state has it.
We got a NFIP quote, and there was about a 40% “new policy” surcharge to apparently try to make up for people paying less than they should actuarially but can’t be raised for political reasons, and a 70% non-full-time occupancy surcharge (we weren’t living here full time yet) because somehow a flood can cause more damage if you’re not there all the time? Idk, we were getting quotes of $12-18k/year for $250k of coverage. It does not make sense.
Private flood insurance is about $1400/year for better coverage.
We live in an area near where there is ‘100 year flood zone’ - but we built our house on a hill to prevent ever dealing with a flood. We lived in Houston, and the house we put an offer on (but the elderly couple just wanted to see if they could sell their house and decided not to sell) - well their house did flood that fall; the house we bought had a large concrete bayou behind it that came within about 6 - 10 feet from the top. We took a company move and were only in that house under 1 year (didn’t know we weren’t going to be there longer). So glad as first time homeowners we did not have to deal with a flooded house (but really bad at any time to deal with such).
People are rethinking coastal/beach front homes and also some of the condo properties that have not had proper building inspections and funds for major structural/roofing/other repairs - some new stuff out on the ‘surf-side condo collapse’ of 3 years ago.
I believe we will have some kind of living arrangement near DD1/family at some future time. Staying in our home and location now in large part due to DH’s activities here, also absolutely want to make sure DD1/SIL do not move in the future from their location before we make any kind of living arrangements there. Right now I go via American Airlines extra times to their home (AA is the best out of our city to get to them via 2 flights and about 5 1/2 hours total airport to airport, from our city in N AL to San Antonio). DD/SIL’s 4 children are ages 1 1/2 - 6, and child #5 is due March 2025. Yes we were stunned with baby #5. DD1 is and continues to be a FT employee, is the primary breadwinner, and both have challenging careers. SIL will ‘make up for lost time’ now that he is on a good career path, and probably eventually will get to an equal or larger salary - may get into a graduate program associated with work as well. DD1 has been in a Master’s Preferred job for 5 1/2 years; when she transferred job locations 1 1/2 years ago, the new workplace wanted her to get her Master’s, and she has everything in place to start - but her homelife with FT work makes it too challenging. Something will suffer (home life or sleep) and the work place is happy with her job performance with status quo. A Master’s will take 3 years with her FT work, and that is way too long with her family situation. I don’t even see DD getting negative job performances due to not having the Master’s - her boss allowed her to transfer into another job under same boss (person retired) because they could not fill the job externally (cost containment) - and DD is continuing to carry some of her old job responsibilities.
Hmm, I think we’re only paying $800ish a year for Federal Flood Insurance. But we live by a lake that could never rise enough to cause damage, unless there was a tsunami. We’re more concerned about rain.
The advantage you had with several moves - a big downsizing, and then if I recall correctly the move to a bigger place near where you were in FL, is that you got rid of lots of stuff and have become more expert in moving.
You obviously were not ready or decided to move sooner than you did, but wonderful that you were out of FL when Helene hit your former living area.
Our area had very big spike of what homes sold for a few years ago – but markets have settled down some – in part due to the much higher interest rates.
Truly one has current and future time period to consider on selling a home or buying a home. But truly thinking about the conditions of both markets – and how to time it out with when to sell and when to buy (if can be done independent of each other), if one can afford to carry both homes (buying one before selling the old), or selling the first and waiting to find the right place to buy the new.
Not sure if even CA is paying that much yet, but here in eastern MA we are paying about $0.35/kWH. Electric prices have gone up over 50% in the last three years.
I switched my oil heat to heat pumps last fall, and just today got solar panels on my roof that should (theoretically) meet 100% of our usage. With full net metering in MA, it’s < 6 year payback.
Still seems inconsistent to me, unless your FA is just increasing risk with your ‘play money’. Otherwise, your asset allocation should consider the total pot, both tax-free and tax-deferred. Increasing risk in one pot while at teh same time decreasing risk in the other pot just seems like moving boxes around. If there is no/little net change, what is the point?
Yes, we have had several moves. We continue to upsize - not necessarily on purpose. We are now at 1,900 sq ft which is more than we need. Having less stuff does make one more nimble. We sold our most recent Florida condo furnished, so we were actually able to move ourselves with a small U-haul truck. Something I told dh I would NOT be doing again no matter how few our possessions - 60 is too old for that! Starting from scratch buying all new furniture sounded fun in theory but proved to be less so in execution. But, we finally have most everything together.
Not sure what you mean about not being ready?? As I wrote above, several factors went into our decision to move back to our prior state.
The cost of our place here is 1/3 of what our beach front condo sold for. I feel much more comfortable having less tied up in our home. Climate-wise, tornadoes are an issue here.
I cannot even imagine the difficulty of having five kids with two parents working full time in challenging careers. The amount of stress they must have would be overwhelming to me. Good luck to them.
@Hoggirl, as a pure financial investment, I agree on selling it sooner v. later, but I think MIL will want to spend the winter there as long as she is able to climb the stairs. She needs someone there at this point after a day or two – each of her kids (and a nephew) come to stay with her for a week to six to enjoy the weather and be around for her. I don’t think we can sell until she concludes she won’t use it next year.
The place is in pretty nice shape although we have to replace some appliances. But, the elevator quote we got was $43K or $48K. Given the recurrent hurricane risk, we were holding off on that.
After capital gains taxes are paid on a sale and things are divided into 4, I don’t think the number to each sib is all that high. So, I don’t know whether the other sibs will want to keep it or sell it.
@bluebayou, good idea to see what an insurer would say we need to do to have decent coverage (hence what a new buyer would need to do). I’ll do that when I’m down there. I will also meet with the broker if MIL thinks it is OK.
There actually is a point. We consider all of our investments together. However, increased risk can result in increased returns. Therefore, the higher risk investments go into our tax free investments with the lower returns going in tax deferred, thus potentially lowering our tax liability upon withdrawal.
My hat is off to you with all that you did with the moves. You have had the FL experiences your spouse and you both wanted, and hopefully now you are now happily settled back and comfortable with less funds tied up in your house. 1900 sq ft is actually a nice area for two people.
What I meant was that at an earlier time when you could have received more for your FL condo, you either were not ready or could not anticipate the market going down a bit on selling price (which might also have been with other factors like climbing interest rates).
YMMV IDK how employment picture will be, but I believe that will be on an upswing, and the stock market will be optimistic within the US. Global funds I do not venture to even speculate. I believe one of my stock groups does have some international in their mix but a smaller portion (maybe 10%).
Energy costs coming down maybe by April, and that will stimulate the economy IMHO.
We continue our portfolio as is, along with regular monitoring. Our bottom line has remained the same even being retired for 3 full years now myself, and DH retired for almost 4 years (and he was the primary income at that point due to my re-entry to the job market after 18 year absence).
But that is not what mom12 said, which was that her FA was going more risky, but she was concerned about her already high stock allocation, so was thinking about ‘dialing that back’. In other words, the FA will b making more transactions (aka fees), but mom12 is offsetting that higher risk by decreasing the risk in her other accounts, i.e., just buckets around. If her risk profile does not change (“I’m a fairly conservative investors”) the expected gain/yield won’t be materially different. (unless her FA has secret sauce that no one else does, but if that was teh case, her FA would be living on a yacht in the Cayman’s and day trading their own account) If mom12’s Financial Plan was to get a higher yield, she woudl not be concerned about the higher risk.
Arggh. Just had a huge argument with husband about RMD’s and converting traditional IRA’s to Roth. Basically we’ll withdraw part of the RMD’s as charitable contributions and that will be tax free. We’ll withdraw part with max federal tax withholding to cover our safe harbor. There will be some RMD amount that still needs to be withdrawn. Husband has a Roth and can convert that balance. He kept talking about taking it out and paying taxes and putting the rest in the Roth. I kept asking what he meant by paying taxes because we wouldn’t have to pay taxes on it until we filed the next April, since we would have already covered our safe harbor.
Turned out he meant owing taxes. He said owing and paying are the same thing. I said not.
I’m not sure there’s any benefit to me opening a new Roth IRA for excess RMD because I gather I wouldn’t be able to withdraw tax free for five years. At age 73, not sure if that’s smart, although I do have plenty of other assets. We’re talking several thousand $$, not tens of thousands annually that would be converted.
