Am I home free or kidding myself?
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Anonymous
| Lol yes. I love your writing style. |
Anonymous
| I have a 500k house that I built (so not old) in a low cost of living area and it still aint cheap to maintain. We do all our own yard work and general maintenance but still spend quite a bit on our house yearly. Plus we are already saving for things down the road that come up before you know it...we've been here 7 years and we realize in about another 10 we could need a roof, AC, windows, etc etc. I think you are really underestimating the maintenance cost of a house that Im assuming is going to be 2500+ sqft. Doing that on a lower fixed income is a big risk. You said you want live there forever so I don't see the costs escaping you. Now a smaller 250k house where you have less sq footage and a lot more money in the bank? Thats a safer long term plan IMO. |
Anonymous
| OP I am from NC and I can tell you there are plenty of people there who work very little or not at all and live frugally. Go with you dream. It's very different than the dc area |
Anonymous
| Google FIRE, Mr. Mone Mustache, etc. It can be done but you will need to do it differently than you are planning now. |
Anonymous
Thanks. Just remember. Keep the house small, that's the key to this whole endeavor working for your family. First of all, you want the extra capital (the other half of the $750k) in productive investments, earning you dividends year after year after year to supplement your income. If you can average 6 or 7% from them, that's an extra $22k per year. Not that you can count on that EVERY year, or that you should be spending it, but it's just an extra $22k per year on average compounding in the background, out of sight. And leave it out of sight. That's almost like an entire extra pension, in addition to the one your DH's already earned. If you were to spend the full $750k, not only do you not have that extra $22k investment income, but your property taxes will be twice as high, your energy costs will be higher, your maintenance and upkeep and renovation costs will be higher, and your neighbors will be richer so you'll always feel more pressure to spend more just to keep up. |
Anonymous
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NC poster here.
The biggest problem I see with your plan is being in one of the nicer areas, in a nicer home (yes, for those in DC, living in an $600+ home is a higher end neighborhood) and being house poor, with a young child. You have no money for nights out, barbecues (we just had 3 families over and spent $300), activities (your kid wants to go to the bounce house? $15 and everyone goes to lunch after, $45 outing), bikes, scooters, sports equipment, all that. And you will be broke. I can't imagine living in a $700k house and being that house poor, neither parent working, with a child. Also have you thought about landscaping? With a large hard and pool, that is mulch, weeding, flowers, stones, and constant work that you won't be able to pay someone to do. We spent about $500/year between mulch, flowers, pose washing alone is $250. I think you need to cut your house budget way way down, into the $300's and forget the pool. All those communities have neighborhood pools. We also thought we were going to be the destination spot and guess how many people came the first summer? 12. Second summer? 6. This summer? 0. Kids grow, people want to go to new places, and honestly people just don't want to stay at someone's house as a destination. Good luck |
Anonymous
| ^^just to add for relevance, we live in the $700k + price range and have a HHI of $130k and are the poor ones. Our neihbrors are double income lawyers, a doctor and nurse duo, a ton of tech and pharma people. |
Anonymous
She's talking about being a retiree with a young child, and all of the expenses laden into that. Also, she's tacking an additional 20+ years onto retirement, with all of the risk inherent in that. It's not the same, at all, as being a 65 yo retiree whose kids are grown. Also, OP, it seems like you are going to expect all friends and family to come see you, in your "destination" house. That's pretty selfish. |
Anonymous
| I agree that you should be thinking much smaller. If you insist on retiring big, work the additional few years to build the emergency fund. |
Anonymous
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I'm just not buying that someone who wants a 700K house with a pool is also the same person who wants to scrimp and never go out or send their kid to camp, etc. If you are in fact this person, I think the others who mentioned that you will feel "out of place" in your 700K neighborhood are right. Your son will be that odd kid who never goes anywhere with his friends. I am not in love with my job, but am hanging in there for the sake of my son. He's in college now and if we did not contribute, he would have huge loans. Sometimes you make the sacrifice. |
Anonymous
+1 People usually think "I don't spend that much on food/gas/utilities... so I can live on $3K/mo" -- ha, ha, ha! You would be surprised to add up all the unusual expenses that happen every month. We tend to tell ourselves they only happen once in awhile, but there seems to be one or two or more every month. Car maintenance -- $2500 (oil gasket leak or something) Other car maintenance $600 (new brakes plus other things) Home repairs/maintenance (faucet needs fixin', A/C unit needs new copper coil$$, powerwashing house and windows, new water heater, add insulation to the garage ceiling, etc., etc) Travel/vacation -- $1000 for that trip to the beach, $1500 for flights to see _____, etc. Therapy for _______ ($400/mo.) Day Camp for summer enrichment: $$$$ Lessons/enrichment: music instrument, after school classes, rec leagues, swimming lessons, gear Replace grill Replace Washer Dryer Replace Dishwasher New mattress New sofa College savings Medical bills (these are only going to get bigger as you age) Etc, etc. These are the big expenses that bust the budget. Each one may only happen once in awhile, but there is always one or the other (or more) happening each month. Saving for a new car every 12 years (that means we need $2500-3000/year to go into that savings account-- for EACH vehicle we have -- so that's $5000 minimum PER YEAR that goes toward saving for a new car). Property taxes -- $4000-7000/year My DH talks about living on his military pension too.... and I say no way! It would lock us into a very tight budget. We are fortunate to have it, but it is not enough for a family of 4 to live well on. |
Anonymous
| OP, where is the 700k now? TSP? If so that's a terrible idea to cash it out. You will pay taxes and also 10% penalty. They will take half... |
Anonymous
We are retirees and my husband's pension is nothing given he was 20 year enlisted. However, there are very few medical bills as tricare covers most things. We had to pay out of pocket for about a year for speech therapy till they finally covered it. Other than that, its a $12 speech and other co-pays as we do most things on base. Even prescriptions are free. However, factor in things like the annuity which is $100+ a month if you are younger, or have young kids as that is the only way to get the pension transferred (and only a portion) to the remaining spouse and child/ren. But, it also assumes they continue to allow retirees to access tricare. Every few year congress tries to take it away or change it. |
Anonymous
You must not be military. They need a active duty base to access tricare prime for the entire family. Once you retire, you continue tricare prime. VA is for the veterans only - as a retiree one can use it but cost wise, its not worth it and it does not serve the spouse or child. |
Anonymous
You are not factoring in taxes, social security, annuity, property taxes, if they are not living near a military base being on Tricare standard which is very different than what they use now, etc. So, at best, maybe $2800. |