Author Topic: Stay Put or Move Up?  (Read 4100 times)

jorgygirl

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Stay Put or Move Up?
« on: June 26, 2016, 12:50:13 AM »
Hi Everyone.  I am posing a question and am just split in half about making a decision.  The hubster and I are mortgage-free and have NO debt.  We have paid off luxury cars, no credit card debt and no school/education loans.  I am retired (age 48), but have a good pension coming in and the hubster is still working, but has 2 years to go until his retirement.  Approx income is about 100K. We each have 2 retirement accounts in addition to our pensions, totaling about 200K and then have savings close to 100K. Our house is worth about 250K on the market right now and we are getting more aggravated with our neighborhood (lots of fire trucks, motorcycles and kids in racing cars). We could stay put, but any more improvements in our current home won't be seen on return if we sell - we are at the top of the market for our surrounding area. Our home is nice and financially it makes sense to stay put, but we would like to live in a nicer neighborhood.  I have a home biz right now, so finding a place where my clients will follow me in the areas we like, mean most homes are about 325-450K. We know taxes will be higher but we are looking for our dream house.  This is the question: does it make sense to make do and just do a few more improvements? Or just make the current home our dream house and spend another 50-75K knowing we wouldn't see it back if we sell? Or just move to our dream house and suck up the additional expenses? Most likely we would try to pay the new mortgage off in about 5-7 years. I also keep hearing the Dave Ramsay motto of just save the difference and then buy the house in cash, which would take us about another 3+ years of saving.

Thanks in advance for your input!
« Last Edit: June 26, 2016, 12:56:29 AM by jorgygirl »

ETBen

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Re: Stay Put or Move Up?
« Reply #1 on: June 26, 2016, 07:05:20 AM »
Do you have kids to consider in the decision?  I didn't see it but wasn't sure. 
I would write out the scenarios of where you would be and what it looks like in 1,3,5 years. Which aligns most with what you want. Also to keep that business viable, what kind of work will he need to put into it with a move and does he want to do that.

jorgygirl

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Re: Stay Put or Move Up?
« Reply #2 on: June 26, 2016, 07:49:17 AM »
ETBen, thanks for the advice. No kids to consider as they are grown.  Hubster is still working, but the biz is mine and set up costs are just for paint, a rug and maybe light fixtures. Hard to look at the 1-3-5 as the only factor right now is the hubster retiring in 2 years, but he wants to continue working in other employment until age 60-62. We are just trying to determine if the cost of moving to a better neighborhood is worth taking on a manageable mortgage, or stay mortgage free and feel unsettled in current situation. The noise factor and surrounding area are the main reason for moving.  One neighbor suggested a privacy fence and insulating the property with shrubs.  That could be an option. We just aren't wanting to put any more money into our current home because we won't see much (or any of it) of it back at the sale. We could maybe add about 10K more and see some back, but 10K doesn't go far when you are talking about refacing the front of the house with a front door and landscaping - at least not in New England!
« Last Edit: June 26, 2016, 07:55:13 AM by jorgygirl »

Dee18

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Re: Stay Put or Move Up?
« Reply #3 on: June 26, 2016, 09:47:31 AM »
If you would live in the new house many years, go for it!  Sounds like you are really ready to move and have met all your financial obligations.

CDP45

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Re: Stay Put or Move Up?
« Reply #4 on: June 26, 2016, 10:13:12 AM »
Are your investments +pension enough to pay for ongoing retirement? $300,000 in retirement accounts at 4% is only $12,000/yr. I would get a handle on what your expenses will be when you both retire and see if there is room for increased housing costs.

jorgygirl

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Re: Stay Put or Move Up?
« Reply #5 on: June 26, 2016, 10:27:43 AM »
Dee18, yes we are ready to move - we've been looking for 2+ years!  And CDP45, we have on-going pensions that more than cover expenses for the new house and the investments/retirement accounts are separate.  Those we won't touch until we are well into our 60's.  Our living expenses are low, maybe $25K right now, but know it will go up a bit with a newer house. All extra money will continue to be invested somewhere.  Maybe that's the answer???  lol

Choices

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Re: Stay Put or Move Up?
« Reply #6 on: June 26, 2016, 01:52:03 PM »
What will your lifestyle look like when your husband retires? Will you travel more? Are you both healthy? Can you maintain a bigger/nicer house or is it actually better to downsize? You might be able to get a smaller but nicer place for the same price as your current home.

jorgygirl

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Re: Stay Put or Move Up?
« Reply #7 on: June 26, 2016, 08:01:49 PM »
Hi Julie. The hubster still plans on working another job after he retires from his current one in approx. 2 years.  We allot a budget for travel now, so unless our expenses change drastically, we will keep that allotment going but may have to reconsider the frequency of travel.  His possible future job may include some pretty good travel and it would be a situation where I may be able to go with him.  Crazy but true, as he's in that kind of career path. We talked about downsizing but have agreed that may be 20 years from now when we are both permanently retired, so it's an option but not likely right now. We've been looking at houses for 2+ years and have made a list of what we are looking for in features and house types, so it's a narrow search, which may be making this a little harder than maybe anticipated. We are just trying to justify the expense of a bigger/more expensive home.  It's a matter of economics and desire to get into a quieter, better neighborhood.  Some tough choices, but we know how lucky we are to even be in this position! 

ShoulderThingThatGoesUp

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Re: Stay Put or Move Up?
« Reply #8 on: June 27, 2016, 04:32:24 AM »
What's more valuable, though, bigger or quieter? I think Julie's point about a smaller home in a quiet neighborhood is valuable.

jorgygirl

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Re: Stay Put or Move Up?
« Reply #9 on: June 27, 2016, 03:37:47 PM »
Hi Shoulder.  That certainly gives us something to consider!  Thx!

frugaldrummer

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Re: Stay Put or Move Up?
« Reply #10 on: June 28, 2016, 02:55:30 PM »
Is there any difference in the age of the houses?  I sometimes think about "trading up" - not because I really need more house, but because my 25 year old house will need some major repairs in the next 10 years most likely (new roof etc) and I could buy a brand new house for just about $100 k more. Since I'm 60, a brand new house would likely need relatively few major repairs in my lifetime, almost offsetting the cost.  However, I am staying put for now because I like my current neighborhood better.

nottoolatetostart

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Re: Stay Put or Move Up?
« Reply #11 on: June 29, 2016, 04:28:19 AM »
....we are getting more aggravated with our neighborhood (lots of fire trucks, motorcycles and kids in racing cars).

Move. Keeping in mind what MMM said recently in an article about taking money out of the equation and make your decision in a moneyless world....your sentiment here said everything. Financially, it makes sense for you too without making you sweat. We recently moved from a noisy railroad situation (it woke me up in the middle of the night, 5:30 in the morning horns blaring, NEVER listen to a realtor that says you will get used to it...but I digress) to a quiet brick ranch house in a downtown setting. It's so peaceful. We keep waiting for it to get loud. It ended up being $10k more than what we sold our other home for and we pinch ourselves every day with our luck.

I personally would not wait the 3 years and just get it done now. 3 years is a long time.