My retirement dream home is downsizing to a top floor corner condo with an elevator and no exterior maintenance. It's in a big city where a car is not necessary, with an international airport accessible through public transportation. I can be active and travel for many years, then anything I need after that can be delivered.
Jame's 5 Common Regrets... 1. "Dream Home." 2. Unnecessary Insurance. (Annuities and LTC Insurance Policies) The WRONG Ones. 3. Investment Property 4. Financial Gifts to Adult Children 5. "Trendy" Retirement Trips Another excellent video from James.
Retirees who remained in their starter homes seem to have been able to retire in these homes. I've seen retirees who have sold, moved up, bought "up", and sold several times. And...they now are in rentals. This is what I've seen. Good luck to all of us! 👍😊
That is kind of my goal. I've made several million dollars trading up in homes. My current home is worth 1.25 M and i have two rentals worth 250K each. When i cash out of EVERYTHING i plan on investing the money and using the cash flow to pay rent to someone else. This way i can pretty much move whenever i want and not have to worry about repairs etc etc.
It's interesting to see the different paths retirees take with their housing decisions. Some find that staying in their starter homes allows them to retire comfortably without the financial strain of larger mortgage payments or rent.
Haha, yeah, in 1999, my husband and I bought our first home; our realtor told us to save her contact info for when we wanted to move up from our "starter home." We had two kids and it sometimes felt extremely "cozy," but any bigger place would've meant at least $1K more per month mortgage, and we always had things we preferred to do with that money (including going back to school for a more fulfilling career, cutting back work hours to focus on family & community activities, and saving for retirement). Now we don't feel like we should "downsize" (to what?!). Though I do wish we'd listened to her warning that with 25+ steps to reach the front door, we wouldn't be aging in place.
It is always strange to see retired couples buy huge, 3000+ sq ft. homes. The problem is that you need the big house when the kids are young but you may not be able to afford it, so when you can afford the dream, you have a bunch of empty rooms.
And an enormous lot on which the big house sits; the huge yard requiring constant physical labor to maintain, or at the expense of a landscaping service.
With interest rates well under 4%, we will keep our original home and investment duplex. We can rent our “dream homes” whenever and wherever we want to knowing we will always have our base property to fall back on.
Exercise consistently and eat healthy now so you can travel when you are 70. Consider doing an active vacation now so you can meet the 70 year olds who make up about 50% of the participants. You may find some of them leading the pack.
Highly recommend Die with Zero, especially the chapter concerning children. We’re giving our children the money to contribute to their Roth IRA so they benefit now and in the future and we get joy from helping them now.
I retired in late 2022 at the age of 70 and am doing just fine. My home was paid for and I didn't have any debt. I have about $550,000 in savings, IRAs, and a brokerage account.
Absolutely, larger investments like yachts or motorhomes can be particularly demanding in terms of upkeep, storage, and overall maintenance costs. What may seem like a thrilling adventure at first can indeed become a significant responsibility and financial burden over time.
well I was thinking that motorhomes is a lifestyle enjoyment to adventures and experiencing things. However there are boundaries to excess and I think that's where the overly big and expensive motorhomes can become regrets. But hey, if you can afford it... live it because you can't take it with you
I know a few people that have had the big RV and they use them all the time! A yacht, not so much. Unless you’re super rich and don’t mind all of the maintenance, slip fees etc. or, unless you are living on it.
Great video, Another factor to add is Do they spend a lot of time planning their financial future? The majority of people do not engage in planing for their future
I’m watching this on our last night of a 17 day trip in Europe. Half of it was on a cruise of the Norway coast, and half of it was our own exploration of castles on the Rhine river. Both required a lot of time of research and effort, there were definitely moments of stress, but I think all of that is true of anything you want to be good at. I loved the cruise, but I also loved traveling independently. I don’t think travel is for everyone. we all have our preferences.
Same here. Finished a Transatlantic cruise to England where we visited Stonehenge. Now in Amsterdam to await the arrival of our 9th grandchild due next month but before that we’ll travel to Portugal because we’ve never visited there. Have been to Paris, Italy and Spain already and Switzerland. Our daughter lives in Amsterdam with her European husband. We love traveling at least once a year. If you can just save $200/week for a year. That’s over $10,000+ for a trip. I’ll br staying for at least two months while hubby returns to the States and continues working-which he does while we travel anyway.
I plan on purchasing a dream home, and love traveling. I agree with you on the other pitfalls but having a cool home and traveling is something I plan to pursue. I was thinking about a travel van but decided that pooping in a fancy bucket is not for me. Maybe I will rent a van for a month and test the waters.
#4. I agree with your points but you failed to mention for those in the situation to do so, gifting is a strategy for lowering your estate tax liability upon your passing.
Buying expensive toys without renting at least a few times or seasons first. RVs, trailers, boats, touring motorcycles, etc. We probably all know folks who dropped major cash on buying something they had never tried or only tried once, only to find the reality of the experience to not be what they expected. The toys gather dust or soak up major maintenance expenses for years, or are sold back for a fraction of what they cost.
You're absolutely right. Buying expensive recreational vehicles or toys without first renting or trying them out can sometimes lead to unexpected realities.
L❤VE THIS GUY! Thank you so very much for your honest, sensible retirement advice - it is PRICELESS! The most important goal in retirement is PEACE & PEACE OF MIND.
Great, informative video! Could you record a video in the future that goes more in depth on annuities (types availble, what to look [out] for, benefits, when they do and don't make sense to purchase so we dont buy into the fears you mentioned? Maybe a similar video on the life insurance policies that can be used for long term care?
I think investment property is a good investment for the early stage of retirement period. Yes, it is active but doesn't require as much time and effort like the full time. It is a quarter time job that does not require lots of time but kills the boredom of the retirement.
Strongly Agree: I’ve now had 2 FPs make needlessly complex buys under the guise of diversification. But really they just extend a hundred tentacles and make it overwhelming to think about disengaging. And I also think they sandbag with lower-than-realistic returns to keep clients anxious about the future and therefore less likely to find alternatives. I’m fixin to fire my second FP and go all-in with Vanguard Select.
Luckily, I have looked at these issues prior to retirement and went through a similar line of reasoning. We moved to an area that with the lifestyle attributes that we really enjoy that is exponentially more affordable than where we were. We did this 10 years before retirement, so we wouldn't be rushing into anything while we were on the cusp of retiring. And we still love living here. Your list is a good one. The one thing that sticks in the gut, though, is LTC. We always maintained LTC policies and still do. But I am not sure that there is a good plan out there . All of the plans seem shaky and expensive. But it's one of those things that you feel you may regret if you don't have one.
I'm curious where you live. I'm 7-years into my (early) retirement journey. Struggling with where I want to/should live. Still enjoying an active lifestyle, (biking, hiking, gym, yoga), but not a fan of the winters in NE Ohio, (where I've lived all of my life). I'm fortunate to have low rent, subject to change at any moment. I try to travel as much as possible and chase warmer weather in the winter. I've visited some nice cities with more favorable climates, but can't see how the major increase in housing costs in those places will be offset by a better overall lifestyle fit. Feel like I'm settling and not truly living my best retirement life. Wish I could find that sweet spot that feels like a great fit.
Nice job with this video presentation. Keeping the list present as you walk through each item was very helpful while also referring back to them as you progressed through the entire list. That said, all great points and you now have me as a subscriber. I’m 2 years out from planned retirement and putting more time into planning those next moves, and you’re giving me good points to consider. Thanks!
That "investment" apartment building will open a can of tax worms. Nothing in the tax code is simple, but anyone considering this should consult a tax expert first.
Timeshare and a motorhome. You might as well burn your money on the bbq 🔥 🤢 I’ve seen a number of millionaires whose money becomes immediately useless as soon as they get a terminal illness. 💀
Incredible safari through Europe? Hehe swole Conole rarely slips so I’ll take this as intentional. BTW your target audience seem the 55-65 near retirement cohort. How about some advice for 45 year olds?
Here is some advice for 45 year olds and younger. Save. Save. Save. Do math and look at the actual cost of things. Most people bleed off far more money than they realize.
From what I've seen and heard there is no middle ground on this. People either really, really love it or they really, really don't. It's not a casual, occasional thing though. It takes effort and a desire to live that lifestyle.
I’m closing in on my retirement and I’d like to move from Minnesota to a warmer climate, but the prices on homes are ridiculously high and Mortgage prices has been skyrocketing on a roll(currently over 7%) do I just invest my spare cash into stock and wait for a housing crash or should I go ahead to buy a home anyways
Good calls and definitely no what the other finance channels are talking about. I laugh at people talking about their "forever homes". There are often four homes in our lives. 1. The starter; 2. The larger home when kids get bigger; 3. The down-size when the nest empties; and sometimes 4. The retirement home. Let's not talk about the old folks home!!!
You make a great point about the different phases of homeownership that many people go through in their lives. Each stage often corresponds to different needs and circumstances, such as starting a family, accommodating a growing family, downsizing once children move out, and possibly transitioning to a retirement home later on.
Great list! Others to approach with caution are RV, sailboat, 2nd home. Rent first and multiple times before purchasing. You may find out you can still have the dream but only when you are enjoying it and not the rest of the year you must maintain that big purchase.
Thank you for the wise words in this video. Although there were years when I wished I had bought that dream home and our kids had the huge house, we stayed put. Now the kids are gone and the house is paid off. It is such a freeing feeling to not have a mortgage in retirement. Travel for me is important though, but only within the budget we established. I know there are many places I will never get to, but I will enjoy those that I can visit.
I don't know if this has been mentioned or not. As an adult (and working), I had dogs (Airedale and Wire Hair Fox terrier). However, as I've retired, I've been traveling like crazy (Europe/Asia). And for up to 30 days at a time. I still love dogs, but it is not fair to have a dog and also be gone a lot. When my traveling days are done, then I will get a "rescue" dog, not a puppy, to live out my days. Spending Hint: Who cares what you look like. I buy alot of used clothes (shirts, pants, etc) at GoodWill, Salvation Army. Just make sure that they are in good shape and wash before wearing.
It’s fascinating watching this video and seeing some of the responses. Maybe it’s a US cultural thing but certainly in Europe many retirees tend to downsize their property once the kids have grown up, are able to free up capital by not keeping a large house. Also investment property is seen as a bad thing? Once again it may be a macro US thing but it’s very common for European retirees to buy a foreign property and use it several weeks a year for vacation purposes but rent it out for 15-20 weeks (provides an additional income to a pension as well as capital appreciation if due diligence is paid on what and where to buy).
I think the key take away from this video is that if you can’t afford an investment, home, vacation,etc before you retire, you can’t afford it after. Making increases in your living expenses after your employment income has ended is very risky. My biggest financial gift to my adult children is contributions to our grandchildren’s’ 529 accounts. It allows our adult children to contribute more to their retirement savings and gives us the satisfaction of empowering our grandchildren with educational opportunities.
James, I like the clarity of your videos! You might want to make a video on the most basic question in retirement, which needs to be asked first, before thinking about "how much is needed for retirement?" ...e.g. what does your retirement "look like'". Scenario1 ... Husband wants to hunt and build ship models in the basement. Wife wants to paint the next greatest landscape. Scenario 2 ....Husband wants to finally study monetary policy and investments, and wife wants to travel on cruise ships all over the world. Scenario 3 ....Husband gets Parkinson's, and wife stays at home as the Care Taker. The dollars need to support these 3 retirements is VERY DIFFERENT!!
Interesting that your main focus was his wardrobe and not the message. I’m personally more concerned about the lamp behind him. Looks like it is about to attack him! I’m gonna see how this plays out so I’ll watch till the end. 😂
I’m watching this on our last night of a 17 day trip in Europe. Half of it was on a cruise of the Norway coast, and half of it was our own exploration of castles on the Rhine river. Both required a lot of time of research and effort, there were definitely moments of stress, but I think all of that is true of anything you want to be good at. I loved the cruise, but I also loved traveling independently. I don’t think travel is for everyone. we all have our preferences.
Congratulations on your travels. My wife and I have a passion for travel and we get months of enjoyment planning and anticipating the trip and years of memories. We are secure in our retirement and plan to travel extensively while we can. I know too many people in their late 60s who suddenly have a medical condition that limits their ability to travel. Bon voyage!
If I have a property manager then what is the problem ? In retirement you need a property manager for your rentals . There are plenty of good ones out there .
True. But all properties require maintenance and upkeep. Some property managers may handle all of this for you but you can rest assured that it will come at quite the cost and greatly erode your ability to achieve a true financial benefit. Hard to beat 5% CDs if what you’re looking for is cash flow.
Very true about investment properties. Great income but a steep learning curve that is not passive even with the best manager. Would I change it? Not now. Was I surprised for the first few years? All the time.
I am an early Retiree. I could afford a vacation home, but I just can’t justify the math over renting an AirBNB. Paying for taxes, insurance and upkeep just does not make sense.
Came to same conclusion. Would tie up too much of our assets in something you would not use enough. I would have to have some serious FU money to do it, and not be a rental. Far cheaper to rent and go some place different.
So how do you plan financially for gifts to kids? Especially if you plan to “Die with Zero.” We would like to gift our kids when they most need it. Is it the one time payments built into a plan? How do you know if you are “enabling” when they are just struggling financially with no other issues?
I took my retirement 60 and still working part time as a handyman because I Love it. The condo is paid off and it’s only 3 plex No big condo fees, no car as I live downtown. I dream of buying a dream car then I would have to get a parking garage etc etc. Stay active move that body, spend time with other people, travel if your into it. Don’t buy crap you don’t need! Cheers 🇨🇦
With condos investment properties are NO WORK!!! Awesome!! If the unit has a clog or issue, you just enter a work order and the building maintenance fixes it! All you have to do is clean it between renters… travelling nurses are the best … 3 month stints, responsible and clean!
You may purchase an annuity and purchase the wrong product. You may purchase long term care, and purchase the wrong product. Guess what? You may invest, and invest in the wrong investment. You may purchase a 2nd home, and purchase the wrong home. You may purchase and RV, and purchase the wrong RV. You see where I'm going here. Shall we just list everything?
I’m glad I’m watching vids like this four years before retiring. I’ve already mentally downsized my ambitions from a dream home to a modest home that I can easily buy and maintain. I might even rent, who knows. If I really want to travel in an RV, I’ll rent one short term. I’ve also been learning about Social Security and Medicare long before I have to make decisions on them.
Start early with diversified investments in stocks, bonds, and real estate. Maximize contributions to tax-advantaged accounts like 401(k)s and IRAs. Regularly review and adjust your strategy to ensure security.
You completely forget using reverse mortgages to buy your dream home and that’s what we did and we love it and our payment is zero in our taxes and utilities are reasonable
Thank you for your video. I'm 63, my wife is 62, and we are both retired. I think most of you what you have to say makes sense however, one thing you didn't mention was the quality of your "dream home" when we retired in order to retire we sold "this old house" which we had sunk $300,000 into upgrades repairs and maintenance. We also sold our boat, we love boating and spent about 200 hours a season out on the water, , however, it's very costly. One of the things I insisted on is a newer house upon retirement. The house we bought is not our "dream house" but it's new, it's spacious enough, and I don't have to worry about new roof, new HVAC, new siding, etc., etc. etc. Well eventually things fail I have plenty of time to enjoy a new home without spending my retirement money on fixing up the house. The second thing I would caution you on is your last comment number five. One of the things I enjoy. Most in life is travel. Now somebody may have a different interest, such as boating, or season tickets to a sports team, or RVing. Travel personally is very rewarding. It makes me happy. I sacrificed living on the water, in order to be able to have plenty of free cash available to spend traveling 2 to 3 times per year. Traveling is how my wife and I enjoy our free time going places we've never been before and spending much of our free time cruising around the globe. Travel is not for everyone, but travel in and of itself is very rude warning, very fun, and is my passion. Again, it's imperative that anybody who seeks to do this has the financial means to do so, and doesn't go into credit card debt to support this lifestyle. I pay off my credit card in full every month and live debt-free.
Yes purchasing an Annuity depends on 2 things 1. The right annuity for your situation 2. What the market does in the beginning of your retirement I plan on buying a single premium immediate annuity and I hope the market does well and it was waisted insurance.
I bought the home I wanted when I was half the age I'm now. In the meantime, it has paid for itself at least twice by saved rent. I have no plans purchasing any insurances. Health care is generally very good here anyway, including care. My home is already wheelchair accessible, although I don't expect to be dependent on that. I already collect my pension, but keep working as a freelancer, but not full time. Since I don't have children, no plans to give those nonexistant children any money. My only relative is my niece who owns her own house. I'm going to use up my money and travel a lot with my car and caravan in order to enjoy my retirement. No need to buy anything permanent elsewhere, my home is where I park my caravan, except when I am at home.
Dream home is a big one and it's definately as much location as it is structure. We live in a 55+ community. Single story houses between 2000-2800 sf and smaller yards. A large number of our neighbors moved here to be closer to family (kids/grandkids), and these people TRAVEL, I tell you.😊 We had some investment properties but they are a lot of work and time and will wear you out. We sold them and reinvested in more passive areas. ROI and revenue stream isn't the same but then again neither is the effort or stress, and that trade-off was worth it for us.
I'm now avoiding new purchases to avoid slipping into a bear trap. However, I'd like to know where the best investment opportunities are during a downturn. My goal is to retire comfortably on around $1.2 million.
Great advice! Also, be crystal clear what your values are. Retirement gives you the time to live your values every day. This strategy makes it easier to live a "rich" life and avoid the 5 big mistakes listed above.
100 percent true. I’m approaching retirement and while I am in a good position to have the ‘dream home’ increasingly I don’t think I want it. I don’t want the hassle or, as he notes, being tied down with having to worry about what to do with it while away doing things I really want to do. Not sure what we’ll do as flexibility will be key in retirement but of course I also want to live in something nice when we are at home. Guess we’ll see what seems best when time comes.
Disagree on the insurance one. Different people need different peace of mind. If insurance or annuities give you peace of mind and help you sleep, it's worth it.
