From First Home to Last Home

One of the questions I get from clients who are a bit older is “can I age in place?”  “Aging in place” simply means, is your home set up so that you can maneuver around as you grow less nimble and perhaps need some mechanical assistance to get around (walker, wheelchair, etc.). This includes having wider doorways, door handles instead of knobs, a shower stall without a ledge versus a bathtub, lower countertops in the kitchen, etc. You’ll notice that I didn’t mention being all on one floor or having a master suite on the main floor. While the data is still relatively new, there is a school of thought that NOT doing stairs is actually exacerbating some aging issues here in America. Now, the study I read compared us to Europeans and that’s like comparing apples to Big Macs but there is a kernel of reality there so this will be interesting to watch as more Boomers age. Of course, some situations make one floor living more realistic but stop and think about whether it is something you “want” or something you “think you should have.”

Contrary to popular belief, size does matter – no one has ever said to me “boy, I really like maintaining this big house now that everyone has moved on – I want to buy a bigger house.”  Bigger houses just cost more and there’s more to maintain both inside and out. Take yard work as an example. While I miss the joy of driving my John Deere with the 60” deck, cup holder, and cruise control, I absolutely do not miss being tied to spending 3+ hours mowing each and every week. It now takes me roughly 17 minutes to mow my front lawn with my little 17’ battery-powered push mower, which means I can throw dinner on the stove, mow the lawn, and be back in before it finishes. Quite a difference. Before you start shopping, make a list of the things you absolutely have to have, the aspects that would be nice to have, AND the features you don’t want. This will shape your search.

So let’s talk money – Remember, a home is where you make it. Often, the hardest part of the moving question is making sure we strip out the emotional aspect of the issue so that it’s more about the financial logistics. VERY, Very, very few people in the Greater Rochester area sell their current home and clear enough to retire on, or even to shore up their retirement significantly. More often, they end up spending slightly more than they clear from their current home (either in actual home cost or in the costs of owning the new home) so the question becomes how to handle the difference. Sometimes the house itself is slightly more expensive, sometimes they move from a less expensive property tax area to a more expensive one, or perhaps it’s as simple as leaving Fairport Electric and being stunned by what the real world pays to turn on their lights. Just ask my parents about their sticker shock when they opened their first Avon water bill compared to the Penfield bill they’d been getting for 40 years (when my mom’s on a roll, trust me, it comes up even 10+ years later).

I encourage all of my “I’m/We’re thinking of moving” clients to build a cash flow worksheet as if they already live in “the new place.” For research purposes, go house shopping and pick a house you’d like.  Take a look at what you’ll pay for it versus the current town assessment and calculate what the annual tax bill is going to be. So many people forget that the tax basis resets after a sale and use the old tax costs in their projections. If a house is assessed at $175,000 but you’re buying it for $210,000, you’ll need to bump up the tax line in your cash flow worksheet by 20% from what you see on the Zillow/Realtor/Whatever database. 

What about moving costs? Are you planning on remodeling? Big project or just paint? Do it yourself or use a contractor? Keep going and pick apart everything you can think of about your current house and your projected house. Once you’ve done an armchair cash flow worksheet, you’ll be ready to start shopping.

There is so much more to this particular question but this should get you moving down the right path (or driveway, so to speak). Doing this work ahead of time might help you realize that there’s no place like home, even if it’s the home you already have.