Retiring to vs. Retiring from
cheerful1_gw
14 years ago
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jakkom
14 years agolast modified: 9 years agoRelated Discussions
My Budget: Debt vs. Savings. vs. Retirement
Comments (5)Hi glavinsolo, When you buy your home, do you plan to cash in your MFs in order to achieve a down payment? You don't say what kind they are, but with expected rate of return of 8% I assume that they're equity-based. The expense rate of 0.5% makes me wonder about that, though, as few charge that low. If you plan to liquidate within a couple of years, if the markets go down, you may be an unhappy camper when it comes time to reclaim the investment. On the other hand, if you have the certificates issued, you can take them to a financial institution to use them as collateral for a loan ... ... which will work if your growth rate on the investment is greater than the rate you pay on your mortgage, after allowing for income tax cost and deductibility in each case. That way, you convert that investment from being a short-term one into a longer-term one, which reduces your short-term risk. Be aware, though, that a financial institution will be unwilling to loan you more than 50% (or at most 60%) of the value of the asset. But you carry some risk if you draw near the limit of what they'll allow, for if the value of the asset goes down and slips below double the value of the loan, the lender will want either some cash to reduce the amount of the loan, or some other assets to underwrite the support for the loan. And they'll want it today ... tomorrow at the latest. With regard to the cost of homes, I'm not familiar with the U.S. markets in general, let alone the ones in your area. But some calculate that the tough times in the housing markets are far from over. I think that it would be well for you to carry on some study of what house prices are doing in the area where you prefer to buy. If you buy early, and house prices continue to reduce, you'll be an unhappy camper, then, as well. Mortgage lenders get quite unhappy if the valuation of the house comes rather close to the amount of the mortgage still owing. If the value goes too low, they'll require that you sell it ... at a loss, of course ... ... or they may choose to foreclose, in which case there'd almost surely be more costs if they sell it than if you do. Which could well mean that they'd be notifying you that you owed them the difference between what you owed on the mortgage, plus costs of repossession and sale, less the amount that they sold it for. Not a pleasant scenario. But one that many who accepted those low-rate mortgages a few years ago will be facing. My feeling is that if I wanted to buy a home in the U.S. these days, I'd be keeping my money in my genes (sorry, "jeans") for a while. There are those who claim that I have some frugal chromosomes in my genes, as a matter of fact. As a matter of fact, my daughter is considering buying accomodation in Arizona, these days. Good wishes as you make your plans. ole joyful...See MoreRetiring from the work force - when?
Comments (35)tina...I do get what you are saying. We have volunteered a lot with the local food bank and our church. Many people need rides out of town and few can do it so DH and I are always called upon to give rides to those that have out of town appts for MD's and lengthy tests etc. We are gone a lot so it is a challenge to fit in volunteer work and travel, for sure ! I seem to never have much time to relax LOL! DH and I are on the go and this trip has been much the same..you have to be someplace every day by a set time...sigh... this will be my last bike tour with others...remember I said I hate too much structure...even if it is " fun" ! We have LOVED being on our own the past 2 1/2 weeks..no one to please but ourselves. You should have seen my face when the 1st B and B wanted to know when we wanted breakfast ...arrgghh ! I don't know !! It is SO fun tonight to be at our nephew's home near Den Haag..they are gone and we are borrowing their home...we can get up when we want :) Joanie...exactly..you said it perfectly ! Precisely what I was trying to convey..thank you ! If you are at all like DH and I you will have more trouble deciding "what to do next? ! " ..there are just too many great things and people and places out there and of course family comes first so that has made a big difference in our plans. We would move to Europe most of every Summer were it not for our children and now our lovely sweet grandson...so choices. May you have a lovely time deciding what joy to bring in to your life next . c...See MoreIN Retirement calculator
Comments (1)bump......See MoreFrom what did you retire?
Comments (3)Well, pilgrim you have stumped me. I love to take forum names apart and give the members my own pet name for them, but I don't want to call you pil and I don't want to call you grim or ill or rim. Maybe I'll call you 555. It sounds full of mystery and intrigue, not unlike 007. Remember him? 555, sounds to me like it's time to make some short term fun goals. Work is definitely not what it is ALL about, but it is good. ful, We joked about my nickname for you, but honestly, it does describe you in many other ways too. How great it is that you are full of joy and can laugh at yourself and enjoy the other "old farts." It is wonderful that you have things you want to see, do and learn. Please keep posting lots and tell us about those things. Remember, you have a new audience now. You can even repeat for my benefit. Are you doing community/charity work to make your community a happier place in which to live? I used to do scads, but now pretty much limit it to the church. jan...See Moremaime
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