How much house? Retiree edition

[goldengirlz]

My mom is thinking of selling her house now that my dad died. She wants to either move closer to her friends or her children (both of which would be HCOL), and lately she’s been thinking of a 55+ community.

Is there a rule of thumb for how much she can reasonably spend on a house? And when would you consider a mortgage vs. cashing out investments?

I don’t think the equity in her current home will be enough cover what she wants in HCOL, even though she’d be downsizing.

I’d also be interested to hear any pros/cons of 55+ communities.

[wanderingback]

I can’t answer the finance question, but my mom lives in one of those communities and she loves it. It’s actually in the neighborhood where my high school house was and my dad still lives there (about 1/2 mile away), so it’s not like my mom went to a whole new city.

Anyway, after my parents divorced she rented for a bit and then she bought a duplex in this retirement community (2 bed 2 bath). I’m not sure how much she paid for it, but I think she bought it when she was around 60. My mom is a social butterfly so it’s perfect for her. She lives in a cul de sac and has become super close with 2 women on her block in particular and they hang out everyday.

Covid obviously changed things a bit, but she’s involved in a lot of activities that are slowly coming back. She does poker and a fitness class weekly. And on Fridays her cul de sac has happy hour where everyone sits outside and brings drinks and snacks. There’s also tons of other things that the community offers. My mom has a bunch of other friends/social activities outside of this but it’s really nice that she has such a wonderful community right there, especially since I’m not close to her.

In addition there’s another section that is assisted living, so if my mom’s health were to decline and she needed help she could just move in there.

So yeah, I personally would recommend a 55+ community based on my mom’s experience, especially for someone who is single/living alone.

[purplepenguin7]

Following because my mom is going through the exact same thing with her and her long-term boyfriend. Even if they both sell their respective properties, they can’t afford to pay cash for small 2 bed condo/townhouse in HCOL. Home prices are wild.

[kadams767]

I guess for me, it kind of depends on how old she is and what shape the rest of her finances are in right now. My mom would probably love being in one of those 55+ communities, but she wouldn't get enough from her current house to buy one outright either. The difference is, she definitely could not afford to cash in any part of her small savings/investments to cover the difference in price, as she needs that money for the rest of her life and it will likely run out anyhow. If she had more, or was older (she is 68) and didn't need her money to last as long as I anticipate she needs, I would definitely consider encouraging her to move to one of those communities. As it is, she does a lot of what other posters have mentioned with her friends now, but she drives/gets picked up for all of them. Being able to just walk a few houses or buildings away would be great as she ages and her driving capabilities decrease.

[ny96]

My mom sold her house a couple years ago and bought a condo, not in a 55+ community, but as it turned out, on a block with a few other 55+ women. It’s been great, they walk their dogs together, have dinner together regularly, and even went to Mexico together recently. Even though she is close to family and other friends it’s been great that she’s got a built in community.

[gt7301b]

I think a lot depends on the specific community.  My ILs just moved from one 55+ community that was apartment style living to a new community where they own their house, but there are community activities.  They were never really happy with the previous apartment community. They were not happy with the food and other community resources.  However, I think it wasn't necessarily the community fault, but the fact that they came in with unrealistic expectations especially with regards to the food.  (The food wasn't amazing, but was in line with what I've had in similar communities) They were some of the first people in the community so they weren't able to tour it when people were actively living there.  One of the things they appreciated about this community was they had doctors and therapists onsite.  My ILs still drive, but it was helpful especially with Covid.

They recently built a home in a different 55+ community.  They are happier there, but I think it could end up being a lot for them to take care of in a couple of years.  They like having more space and still having access to all the activities in the community.

Bottom line, I think a 55+ community can have a lot to offer, but I'd want to visit multiple times to get a feel of what each community is actually like.

[krystee]

A couple of my mom’s friends have moved into 55+ communities and LOVE them. Their social lives are more active than mine has ever been! My friend’s parents just moved into the Villages, and she is like, “Every crazy story you hear is true!”

[midwestmama]

DH's grandpa and step-grandma live in a 55+ community (mobile home community) and love it. I think they feel safer and everyone kind of looks out for each other. If it were me and I was single and older, I would definitely look at a 55+ community.

Regarding the mortgage v. cashing out investments, my initial thought is around interest. Will her investments earn more interest than the interest she would be charged for the mortgage?

[ssmjlm]

I don't think a small mortgage is a necessarily bad thing if her income covers it. Is she paying a mortgage now or is the home paid for?

I think being in a 55+ community can be a good thing when you're in a new town and trying to find people that are in a similar seaon of life.

We went to visit my grandparents in an independent care condo community and I was like "Damn, I am ready for this life." They were so busy and had so many options.

[steamboat185]

My parents live in a 55 an older community and love it. They have a condo and it was designed to help people age in their home. Every room is wheelchair accessible as are all the switches and doorways. They have a ramp leaving to the front door. While they don’t need it now it’s nice to have. Their end of the development is super active. They have happy hours and walk together frequently. They have an outdoor space, but only have to deal with their front porch plants- no shoveling or mowing grass. I really didn’t think they would like it as much as they have.

I probably would have taken out a mortgage, but with interest rates high I’d lean towards selling investments.

[k3am]

How old is your mom? I think that would come into play in the decision. She may also want to consider renting vs. buying - I know it's very common in the 55+ communities around here.

FWIW, I think it's a great option and I wish my mom had done something similar. She retired and basically never left her home after that, which I think has played a large part in how quickly her health and mental state have declined. I think she would have thrived in an environment that kept her active socially.

[macmars45]

My aunt & uncle have lived in a 55+ community for years now. They love it!

My parents live in a condo community that's probably 80% 55+ but isn't exclusively for that age range. They are very happy. My 45 year old sister also lives there (in her own condo) and has been really happy as well.

[mich1]

Apr 8, 2023 8:45:27 GMT -5 goldengirlz said:

My mom is thinking of selling her house now that my dad died. She wants to either move closer to her friends or her children (both of which would be HCOL), and lately she’s been thinking of a 55+ community.

Is there a rule of thumb for how much she can reasonably spend on a house? And when would you consider a mortgage vs. cashing out investments?

I don’t think the equity in her current home will be enough cover what she wants in HCOL, even though she’d be downsizing.

I’d also be interested to hear any pros/cons of 55+ communities.

You need to figure when her cashing in her investments (and presumably needing to pay taxes on them) would affect her IRMAA.  It kicks in fairly fast for a single person, at somewhere around $80k in MAGI.  So her pulling out a chunk of an IRA could have an impact on what she pays to Medicare for insurance the year after.  At the highest levels, other than taxes she’d pay at the marginal rate, she could be paying up to around $6000 extra that year for health insurance.

[fryjack2]

I think it would be so fun to live in a community part time when we retire. Like living in college apartments.

And I just realized that H is only 7 years away from 55 and woah. He has no desire to retire anytime soon, but just knowing there are retirement communities available in 7 years is crazy to think about.

[goldengirlz]

May 23, 2023 21:39:45 GMT -5 fryjack2 said:

I think it would be so fun to live in a community part time when we retire. Like living in college apartments.

And I just realized that H is only 7 years away from 55 and woah. He has no desire to retire anytime soon, but just knowing there are retirement communities available in 7 years is crazy to think about.

I know, that number no longer sounds so old anymore! I will say, though, that the community we toured definitely skewed older than 55.

Quick update for the thread though: My mom decided she’s not emotionally ready to move just yet. There were a lot of tears on the tour. My dad died two years ago and she can’t even bring herself to go through his stuff, let alone pack it up or donate it. So she’ll stay where she is for now.