Getting Ready to Retire? Start by Rightsizing Your HomeTopic: Investments
If your long-term plan is to keep working, investing and living where you are until the day you retire, and then change your lifestyle and financial life, you are practicing what I call “cliff living”—living one way until you abruptly leave the world of work, then leaping to a whole new level of life and finances.
Instead of waiting for this dramatic turn of events (which, incidentally, many people can no longer pinpoint in their future), I recommend living a “blended life,” one that incorporates some major changes as early as possible that can continue seamlessly into your retirement years.
In other words, rightsizing your finances, work and lifestyle so that you ease the transition, and at the same time help to ensure that your income and assets (inflow), as well as your costs and liabilities (outflow), are well-suited to retirement or semi-retirement.
Home Sweet Home
A blended life includes considering whether it’s time to rightsize your home. Typically, this means downsizing—particularly if you are an empty-nester living in the family home with empty bedrooms, not to mention the great room, finished basement, and formal dining room… Start by taking an inventory of how and where you spend time over a week or two. How many of those rooms and other features do you (and the other occupants) really use? Consider moving to a smaller home that includes only the rooms, overall space, and yard that you truly need, for these three reasons:
You’ll immediately start saving money on everything from utility bills and property taxes, to cleaning supplies and light bulbs.
You’ll get your cash outflow in line with your lifestyle now as well as with your anticipated retirement lifestyle, making it an easier, more blended change when the time comes.
Rightsizing your home and your possessions may seem scary or negative, but it will actually empower you, and give you a new life that is a match for your practical, unique financial life. That is the definition of rightsizing.
Small Is Beautiful
Current home sales are following this rightsizing trend; according the US Census Bureau, the median floor area of new homes fell to 2,094 square feet in the third quarter of 2009 from 2,309 square feet at the start of 2007. The National Association of Builders agrees that the median size of new homes is shrinking, pointing out that rooms are getting smaller, and some of the luxury amenities that were popular last decade are disappearing—including opulent bathrooms and kitchens.
What about the Market?
My clients—along with a lot of other homeowners out there—are leery of selling their property in today’s unfriendly real estate market. However, I argue that this could be a good time to make a change. The question you should be asking yourself is not “Is my house worth less than it was before?” but rather “Is my house worth less than it will be in the future?” If you’re staying put because you hope that the answer will be yes—particularly in the next few years—it’s important to understand that there is no guarantee that the market is going to recover at any kind of reasonable pace. And when the market does change, it won’t have “the perfect storm” of easy money, dropping interest rates, and strong economic conditions to accelerate as it did in the past.
So if you are in a position where you would not buy your home today because of your situation (whether family size, finances, or location), you should take action toward rightsizing.
Sharing Your Home
Another option for rightsizing housing costs is to cohabitate, either in your current home or in a shared dwelling. This is becoming more common, as grown children move back in with their parents (and vice versa) to weather unemployment or the slow economy. There is even a trend toward building multifamily dwellings so that aging parents or grandparents can share a roof with caregivers. I think that more people will find it practical to cohabitate in a single- or multifamily home, whether with family members, friends, roommates, or boarders, finding unique and creative ways to make these situations not just financially beneficial, but comfortable.
I have practiced what I preach here, which is how I can attest that rightsizing a home is so empowering. Several years ago, my wife and I moved from our four-bedroom home with a three-car garage, to a duplex apartment that is better-suited to two people, closer to our work, and the ideal home for our blended life. The change has been a positive one, and I encourage you to carefully consider what factors might help you choose your rightsized home sooner rather than later.
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It is harder to find for your money, bsaeuce his plan will give you the names of the characters, instead but I was able to watch couple.En on the system will have to understand you based on your age and stuff, but In general, it would be something most of its 401 balanced or mixed means that some links to some great (more secure) stocks . then put a bit more of a growth fund (to combat inflation, a little bit of your money to grow faster than large caps and bonds do not), then a little money (only 10% 20%) should be invested globally. .. took us to the world .. they are working, building and growing like crazy . and make you money (the investment) From what I could do on the funds you listed, you have a balanced fund and then see how the Growth Fund is .. .. American Capital and Income Builder has some exposure . World if you think that the Small-Cap Fund, the world is too risky. (Or 10% goes for any international) You can make a big difference if you are not happy after a year or two But I think you will see that some risk is worth it If we compare the percentage of benefits after a year or eighteen months.
I hadn't thought about the limit on funds, but that's ionartmpt to me, too. I have a Roth IRA open at Edward Jones right now they allow me to start with $250, and contribute $50 a month. I've been looking at Vanguard index funds, too. Your vote of confidence in them helps me feel better about my own thoughts, which was that, after hitting 3K, it might be a good idea to switch. Or maybe, split between the two.Boy, it's hard to make these decisions sometimes.
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