Author Topic: I'll Just Work Until I'm 65  (Read 4071 times)

foghorn

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I'll Just Work Until I'm 65
« on: August 16, 2019, 08:15:25 AM »
A few weeks ago I was chatting with a good friend of similar age (he is about 50 - and I am 52).  He was telling me how he and his wife are considering moving up to a new/larger house - they live in a HCOL area.  I was surprised to hear this as their kids are now teenagers and will be leaving their current home in a few years as they head off to college.  The current home has served them well and there is nothing new that has come into their life that would necessitate a newer/larger home.  In fact, is seems that downsizing in a few years would be the more likely move.

When I asked him why they were deciding to upsize when they could maintain where they are - and then downsize (or simply stay in their current home) - all he could really say was they wanted something bigger/newer.  When we talked about how this would certainly create a larger mortgage and many more years of paying that mortgage, he just said - "Well, I will just work until I am 65."

Sadly, he has been through a couple of layoffs in his career (no fault of his).  But, he certainly knows these things can happen.

I guess I was just so surprised to hear him speak of not only a willingness to work until 65 - but the assumption that good paying career would be available until then.     


ysette9

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Re: I'll Just Work Until I'm 65
« Reply #1 on: August 16, 2019, 08:23:06 AM »
That is sad, but maybe he just lacks any other vision in his mind of what is possible aside from working to 65? Maybe he needs to see some other paths as demonstrated by you when you retire soon..... ;-)

2sk22

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Re: I'll Just Work Until I'm 65
« Reply #2 on: August 19, 2019, 05:28:27 AM »
By a coincidence, I was just some relatives of ours did exactly this. They upsized to a very large house (in a midwestern city) just when they least need the space - kids have grown up and moved out. Five bedrooms no less!

norajean

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Re: I'll Just Work Until I'm 65
« Reply #3 on: August 19, 2019, 05:36:18 AM »
Does he like his job?

foghorn

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Re: I'll Just Work Until I'm 65
« Reply #4 on: August 19, 2019, 07:31:47 AM »
Yes, I think he likes his job.  But it has its stresses and having been laid off from other jobs (again, no fault of his) - he is not delusional about jobs always being around for him.

Fishindude

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Re: I'll Just Work Until I'm 65
« Reply #5 on: August 19, 2019, 07:57:48 AM »
My brother in law is doing the same thing.   Very high paying job but I suspect they spend it as fast as they make it.
Just built a new house I suspect they owe a bunch on, and probably can't handle the expense of private health insurance out of pocket.

PDXTabs

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Re: I'll Just Work Until I'm 65
« Reply #6 on: August 19, 2019, 08:07:17 AM »
When we talked about how this would certainly create a larger mortgage and many more years of paying that mortgage, he just said - "Well, I will just work until I am 65."

Real estate in the US can be highly leveraged with tax deductible interest. Although slightly risky, depending on how the real estate market does this could turn out to be a large windfall for him.

Not what I would do, but also not outside of historic norms.

EngineerOurFI

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Re: I'll Just Work Until I'm 65
« Reply #7 on: August 19, 2019, 12:27:41 PM »
When we talked about how this would certainly create a larger mortgage and many more years of paying that mortgage, he just said - "Well, I will just work until I am 65."

Real estate in the US can be highly leveraged with tax deductible interest. Although slightly risky, depending on how the real estate market does this could turn out to be a large windfall for him.

Not what I would do, but also not outside of historic norms.

I'd agree with the bolded point prior to recent tax reform....but due to tax reform and significantly higher standard deduction, you have to have one monster of a house with no down payment and/or be tithing in order to qualify for any real tax deductible interest beyond just taking the standard deduction.....

PDXTabs

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Re: I'll Just Work Until I'm 65
« Reply #8 on: September 03, 2019, 09:59:23 AM »
I'd agree with the bolded point prior to recent tax reform....but due to tax reform and significantly higher standard deduction, you have to have one monster of a house with no down payment and/or be tithing in order to qualify for any real tax deductible interest beyond just taking the standard deduction.....

I guess it depends on which state you live in and how much you make. You can still take a $10K SALT deduction and the standard deduction for single folks is $12K, so you only need $2K of mortgage interest to be above the standard deduction in this case.
« Last Edit: September 03, 2019, 10:00:56 AM by PDXTabs »

Sugaree

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Re: I'll Just Work Until I'm 65
« Reply #9 on: September 05, 2019, 06:07:00 AM »
When we talked about how this would certainly create a larger mortgage and many more years of paying that mortgage, he just said - "Well, I will just work until I am 65."

Real estate in the US can be highly leveraged with tax deductible interest. Although slightly risky, depending on how the real estate market does this could turn out to be a large windfall for him.

Not what I would do, but also not outside of historic norms.

Or he could end up like the people in the article I read recently who built some of those godawful McMansions 15 years ago and now want to sell them and retire.  Except no one wants to buy them or can afford them. 

I live in what would be considered a "starter home" today.  1600 sq ft of heated space with 400 sqft of semi-heated space (it's a 2-and-a-half-season room).  It's just me and my husband and my kid.  It's a little crowded right now, but I fully expect it to be the perfect size as the kiddo gets older and has fewer/smaller toys.  Now if I could just do something with the amount of random stuff my husband collects...

EricEng

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Re: I'll Just Work Until I'm 65
« Reply #10 on: September 05, 2019, 08:01:45 AM »
I guess it depends on which state you live in and how much you make. You can still take a $10K SALT deduction and the standard deduction for single folks is $12K, so you only need $2K of mortgage interest to be above the standard deduction in this case.
Although it is uncommon for a single person to have a large mortgage.  If they are living some place where they get hit with $10k SALT, they are probably in an urban area like NYC, DC, etc and renting an apartment with no mortgage. 

Most of my coworkers in the Denver area rent until they need more space due to family at which point you are looking at $24k deduction. That's hard to match unless you make a large charitable donation in a single year to a DAF.

PDXTabs

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Re: I'll Just Work Until I'm 65
« Reply #11 on: September 05, 2019, 01:03:26 PM »
Most of my coworkers in the Denver area rent until they need more space due to family at which point you are looking at $24k deduction.

I have friends like that, they were astute enough to not get married due to other marriage penalties before this tax law. One files head of household with the kid and the mortgage interest and they come out ahead.

Of course, convincing your wife to get a paper divorce for tax purposes doesn't usually end up well. Don't ask me how I know.

BlueHouse

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Re: I'll Just Work Until I'm 65
« Reply #12 on: October 06, 2019, 09:20:15 AM »
he and his wife are considering moving up to a new/larger house - they live in a HCOL area.  I was surprised to hear this as their kids are now teenagers and will be leaving their current home in a few years as they head off to college.  The current home has served them well and there is nothing new that has come into their life that would necessitate a newer/larger home.  In fact, is seems that downsizing in a few years would be the more likely move.

When I asked him why they were deciding to upsize when they could maintain where they are - and then downsize (or simply stay in their current home) - all he could really say was they wanted something bigger/newer. 

I think this is more common than most people realize and I think there is a reason often overlooked:  As people approach empty nest, they think about what they'll be missing and how to get it back into their lives.  Is it possible your friend and his wife are hoping that if they have a new home with ensuite baths that the kids will be more likely to come visit?  Especially when there are grandkids involved?   Look for clues:  if they're more interested in features that make visitors comfortable than in how they live their own lives, then that's the driver.  And they're focusing on having a house be the draw, rather than the relationships or activities, etc. 

The_Big_H

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Re: I'll Just Work Until I'm 65
« Reply #13 on: October 06, 2019, 09:04:40 PM »
When we talked about how this would certainly create a larger mortgage and many more years of paying that mortgage, he just said - "Well, I will just work until I am 65."

Real estate in the US can be highly leveraged with tax deductible interest. Although slightly risky, depending on how the real estate market does this could turn out to be a large windfall for him.

Not what I would do, but also not outside of historic norms.

Or he could end up like the people in the article I read recently who built some of those godawful McMansions 15 years ago and now want to sell them and retire.  Except no one wants to buy them or can afford them. 

I live in what would be considered a "starter home" today.  1600 sq ft of heated space with 400 sqft of semi-heated space (it's a 2-and-a-half-season room).  It's just me and my husband and my kid.  It's a little crowded right now, but I fully expect it to be the perfect size as the kiddo gets older and has fewer/smaller toys.  Now if I could just do something with the amount of random stuff my husband collects...

Just remember that people tend to fill out whatever space they live in regardless of size.  THe stuff may be crowding you now, but in a 3000sqft house it will just be 5x more stuff.
Clutter always happens, set some rules both ways, ex:
- this bookshelf right here, if its 100% full of books, something needs to be sold/donated before another is bought.
- this closet/dresser drawer, if it cant fit, something needs to go before new items get added into it.
- gunsafe, if its full, sell one before buying another.

etc...

BlueHouse

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Re: I'll Just Work Until I'm 65
« Reply #14 on: November 05, 2019, 10:45:25 AM »

Just remember that people tend to fill out whatever space they live in regardless of size.  THe stuff may be crowding you now, but in a 3000sqft house it will just be 5x more stuff.
Clutter always happens, set some rules both ways, ex:
- this bookshelf right here, if its 100% full of books, something needs to be sold/donated before another is bought.
- this closet/dresser drawer, if it cant fit, something needs to go before new items get added into it.

etc...

heheh.  I had a storage bookshelf (IKEA) thing in my last place that held SO MUCH STUFF.  I didn't want to fill it, but those empty shelves sang out to me.  I decided to fill them with pretty boxes (empty).  So everytime I got a gift from Tiffany or some other fancy designer store, I kept the box and stored them on empty shelves to dissuade me from buying more stuff.  Then I became addicted to the boxes and actually found myself buying empty cigar boxes to put on one of my shelves.  Later, when I moved, I came to the point where I actually paid someone to pack the empty boxes and move them.  That's when I knew I had a problem.  (most of) the boxes are now gone.  I still have those cigar boxes and I'm still searching for the right thing to put in them.  It's been 20 years.