Preparing For Retirement – Part IV

For many people, the bulk of their wealth is tied up in their homes. As people approach retirement with a PLAN (Part I), the home and whether to downsize… or to acquire a 2nd home is a key decision.

If you have been diligent about paying down your mortgage, selling the home can be a source of liquidity to make sure that you have enough cash to live on and establish an emergency fund. In an ideal world, the home’s value would have appreciated and this equity could be the foundation of your retirement ‘nest egg’. This scenario is a far cry from the backlash reality of the current market decline, as people are seeing their home values slide.

On the other hand, there are amazing opportunities for purchasing a dream home at a fraction of its original cost. If you are in a position to take advantage of the market with a purchase and hold out a while longer for the market to shift back toward positive, that may be the best answer. Each geographic area has unique market characteristics. Truly understanding a certain market will help in timing a sale or purchase. This is called “gaming” the real estate market. This decision is critical in the overall success of the retirement plan.

Pay close attention to trends in the region you are considering by reading the local newspapers, searching the Multiple Listing Service… and by all means, using the service of a professional Realtor®.

Planning Your Retirement? Things To Consider!

Retirement remains a great opportunity to finally enjoy the results of years of hard work. However... without a great deal of thought and planning, this transition may not go as smoothly as you would like. It is important to determine HOW you would like to retire. What is the Grand Plan? What lifestyle makes sense for you? Is traveling a priority... day after day of golf or tennis... daily strolls on the beach???

Once you have determined the lifestyle you aspire to for your retirement, the planning really becomes important! Where you choose to live should reflect that lifestyle. Golf every day? You may want to consider joining a golf club or living by a favorite golf course. Boating a priority? Pros and cons of having your own boatslip right out from your back door. Is weather a priority? Tired of brutal winters that involve slipping on ice or endless shoveling and hovering around the fireplace? You may want to consider a warmer climate. That takes care of the winters, but are you prepared for the hot summers? And owning two residences (in order to live half the year in each) requires a great deal of coordination to maintain both.

Financial Planning is critical! There are a variety of retirement plans that range from IRA's to 401K's to Credit Unions. A good financial planner is a good start. Having the means to support the type of retirement you dream of may take some serious strategic investment and saving. We particularly like this article - Fundamentals Of A Successful Savings Program. Another good one is Determining Your Post-Work Income.

Where to Live? Glenn Curtis in his Five Retirement Questions Everyone Must Answer gives a list of factors to consider when thinking about this question:

• Proximity to family members
• The cost of housing
• Access to health care facilities
• Access to entertainment (such as shows and sporting events)
• Proximity to a major airport
• Year-round weather conditions
• Taxes (state income, property and estate tax)

As I look at the list, I realize once again how much the Tampa Bay area has to offer! It simply makes sense that other retirement-oriented baby boomers will think the same. For a look at what is looming ahead for an aging population, read The PURTEE Team Blog Social & Economic Implications Of An Aging Population.