That was an interesting article. Out of financial necessity to make independent retirement doable in a low-cost manner, they have put together a community.
My friend purchased a home in a college town, and the area she lives in has snow removal and all lawn maintenance from about a few feet out from the home (so she has some planting beds or areas with low maintenance next to the house). Full-sized, two-story house. She has family in the area, and room for her kids/grandkids to come for a visit from several states away. Her husband had a cancer diagnosis after they moved and died within 2 years of their move. She was the planner and got much of the move organized. Had stuff moved into storage for their out-of-state house sale, and the staging for moving from storage into the new home. It seems her life is going along fine. Both her children have gotten married within the last few years (and the husband dying before the second wedding but he did know his future DIL). I donāt think she will ever live near either of her kids unless she chose an AL that worked out to be close to one of them. Her kids donāt live too far apart from each other - maybe 3 hoursā drive.
Our street is small, and a lot of the neighbors have various tools. When needed, everyone pitches inā¦or loans the tools to a neighbor.
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Opening a Roth account is separate from funding it. You can open them (one for each of you) at any time.
Then fund them with rollovers at your leisure.
I think the five year period starts when you fund it, but that applies only to the earnings. You can pull out the rolled over funds at any time because you already paid the taxes on them.
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My understanding is that rollovers need to sit in the account for 5 years. Otherwise there would never be a penalty for an early withdrawal from a 401k or IRA, just roll it over and withdraw. Has to be some hoop to jump through first.
Edited to add, my comment is for early retirees before 59.5.
Hey, all you need is neighbors like us. Weāre forestry folk, and me and my loppers and my husband and his chainsaw would have had that in a nice pile for you in an hour.
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Weāre now spending some time visiting my mother in law. Sheās 97 and lives in her own home alone. Physical problems, uses a walker and sometimes falls, but it works because her mind is intact and sheās willing and able to hire people to do work. It is very important to her to stay in the home that she grew up in, and why not? Sheās 97, she can live how she chooses. Though we have made sure thereās someone who comes by every single day.
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My father passed away unexpectedly when he was 77. My mother stayed at their very large 3+ acres home. I waited for few years before talking to my mom about moving to a nearby condo. My brother was against it because it was our family home and it was a place we gathered around holiday time. I told my mom that she shouldnāt hold on to a place so we had a place to go to on holidays. She had gardener, snow shovel service, and a cleaner, but she was having a hard time to get her garbage to the curb to be picked up. She was very happy when she moved to a 2 bedroom condo. Now she is older and living in a rental apartment. I am half a block from her. Yesterday she forgot she had a doctorās appt. She was lucky that I was working from home. I ran over and put her in uber to take her to the doctorās.
D1 finally got a very good nanny for her two kids. She is thinking once the kids got older she would just have the nanny as a house manager. She said it would be helpful to have someone to run the house - shopping, playdates, school events, dealing with plumbers/electricians, etc.
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Re not agreeing with your spouse about relocating and whereā¦that is a concern here too. We donāt completely agree on where or if we should move. But if one of us is out of the picture, we can do what pleases the remaining one.
I know, if something happens to my husband, Iāll wait a little. Then Iāll likely sell this place and move closer to my family. We have zero family near here except one daughter and her husband. I could look for an apartment or condo near here, I suppose, but I doubt I would find one that is I like more than this house. But Iāve seen plenty near where my family lives in another state (in decent proximity to an airport, and great medical careā¦and a lower overall cost of living).
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My mom has always been very frugal. Because of the markets and how she spends very little, her net worth has gone up quite a bit. She said she wanted to leave it for her kids. I told her to just spend it. My siblings do not go out of their ways to look after my mom and I donāt really need any inheritance. I told her to treat herself - take an uber rather a bus, get food delivered and get help around her apartment. She is going on a cruise with her friends in a month. A lot of coordination on my part to get her to and from, but itās worth it.
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Thatās such good advise. I wish my parents had just replaced the darned dishwasher when it broke a year or two ago. Yes, I know itās expensive (and even more so because theyāll need an electrician to put in an outlet - hardwired no longer allowed)ā¦ especially when seeing the world through salaries of 30 years ago. But now is the time to spend those savings to do things that ease the caregiver workload.
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I am bound and determined not to end up like my parents and in-laws. Both husbands were in the trades and were able to retire with a pension and SS. My mom worked in the school system in various positions not teaching. She also had a pension. MIL was a SAHM.
Both families were mainly middle class for us growing up. I always say when Dad wasnāt working or had to travel out of town for work was when we dipped into lower middle class.
Everyone retired. With SS and pensions both couples had adequate funds to live on. But what I have seen since they started to retire has made me sad. Everyone basically stayed in place. No traveling. No doing fun activities. My folks loved sports but did they go to games in retirement? nope. They didnāt come visit grandkids.
In the end Dad died at 72. MIL at 75. Mom at 76. FIL is still kicking at 80. He seems to have to no interest in doing things with his children or grandchildren. He will show up at the normal gatherings, but it wasnāt like he called up my youngest while she was home this Summer to go to lunch or dinner. Or even go to a museum. Both of them love them.
I have decided if something were to happen to my better half unexpectedly that I would probably work a couple years get things organized and then sell the house and buy a sprinter van and live the van life across America.
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When my husband retired, the funds in our IRA was approximately the same as his parents. They were bragging so my husband told him ours was similar.
Fast forward 3 years. Theirs has grown quite a bit more than ours. They have a different investment strategy and are very aggressive. They live on their social security and donāt use the money in their investments. Last year was the first they gave money to their children and grandchildren at the urging of their FA. It was a small amount in the scheme of things.
We are much more cautious. I pointed out to my husband that we arenāt drawing social security yet, this is the time we are actually spending down more of our savings. We also have a lot of time to be retired so we like being cautious. We are traveling and made a sizable contribution to a wedding and a college fund. More than what the in-laws took out as gifts.
Besides itās not a race.
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DH had 4 great aunts (his grandfatherās sisters) who lived to be 101, 105, 106 and 107. The 105 YO lived by herself in IA until her death. The 101 and 107 YOs lived together independently until they passed (obviously the one before the other). The 106 YO was a nun who did remarkable things into her 80ās and 90ās - including a Chicago inner city group home for women just released from prison, for them to learn how to parent and run a home for them and their children (Chicago Tribune posted an obit for her and recognized her work); she was part of the ānun studyā - she eventually went to a retirement home where she went around to cheer up the old folks (she was the oldest resident).
If your MIL keeps a cell phone in a pocket (in the event she falls and needs help) it sounds like she will continue to do fine.
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IDK if the markets are going to have any kind of a slow down and prolonged period where aggressive investment strategy might burn some, but as you say, it is not a race.
SILās parents have a government pension and not really enough savings - since he worked in law enforcement, he had to retire at 55, and due to beginning Parkinsonās, did not go into other work. In his mind, he had enough funds. But the government overpaid on his monthly pension, and they had to slowly pay the overpayment back with lower pension checks. The wife actually took a telephone job translating for health care calls - hospitals would tell her what was going on and she would translate for the patient/family (she is bilingual Spanish). As soon as his full pension was restored, their savings level was back to their comfort level. They now have to move to be near one son/family to go into assisted living that they can afford. They might move in 2026.
We are financially in better shape, and are healthy. We will move to be near DD1/SIL/Gkids as soon as SIL transitions out of Army and into FT work in their city - should be in 2026, but he may extend Army a year if he needs to. I will drive and be with them most of September to help the family out while DD1 returns to FT work and baby (#5) goes to FT daycare. The older two kids started at a new school this week. I want to get a feel for the housing market, travel distances, what neighborhoods and properties to be reasonable for us and expected flow of life there. DD1/family are in a rent home, and will stay there until they have permanence and also can see something doable for their family.
For those talking about moving plans once a spouse dies and waiting a bit before selling (especially if youāve been in your home awhile and have significant appreciation):
Please be mindful of current tax laws on the sale of a primary home and the amounts excluded from capital gains tax. Married couples can exclude $500k of gain from the sale of their primary residence. A single person can exclude $250k of gain. The surviving spouse gets that $500k exclusion for two years from the date of death of the spouse. After that, the amount drops to $250k
I have mentioned on another thread (or maybe on this one - topics do tend to circle back here) that my sil sold her house about two years and two months after her husband died. The amount of gain she had over $250k was subject to long term capital gains tax. Had she planned a little better, none of her gain would have been taxable.
I do understand not making drastic changes immediately after the loss of a spouse and that tax implications shouldnāt be the primary driver in decision making, but that $500k exclusion amount only lasts two years.
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When my father died, my mother was able to get a step up on the value of the house, so my mom had very little capital gain when she sold the house.
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Everyone is talking about death of a spouse hereā¦and it appears although i canāt say 100%, itās all women talking about husbands.
damnā¦thatās cold!!!
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those in a Community Property State receive a full step up in basis of all community property assets when the first spouse dies.
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Wow. Good to know!
I have never lived in a community property state.
Now that I think about it, I believe you inserted this useful info before, and I had the same response. I am old and crazy.
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