FREE NEWSLETTER

Dream Inflation

Kristine Hayes, 1:03 pm ET

AS PART OF OUR retirement strategy, my husband and I plan on using the money we make from the sale of our home in Oregon to help cover part of our retirement expenses. We already own a second home in Arizona, which we’ll move into once I leave my job. We’ve played around with different ideas for how best to use the money, including making a large, onetime payment against our Arizona home’s mortgage.

More likely, however, we’ll use the cash to help cover our living expenses until I’m eligible to receive Social Security. Even though I can access most of my retirement account money when I turn age 55, I’m hoping to hold off tapping my nest egg until I’m at least 65. Once I leave my job, we’ll still be eligible to receive health-care coverage through my employer. We will, however, have to pay premiums of about $7,000 a year for the two of us. The money from our Portland home would help cover that expense.

When we started making our plans, we assumed we’d get back little more than our down payment—$80,000—when we sold our Oregon house. But over the past year, the equity in our modest home has increased sharply. Our ideas for how best to use the money have also grown by leaps and bounds.

I started making a list of items we might want for our Arizona house, including new kitchen appliances and new flooring. A few new electronic gadgets also made the cut. Every day, as I checked the latest estimate for the value of our home on Zillow, the list grew longer and more diverse. Our latest idea: Using some of the money to start a small business—which might eventually create a stream of income for us during our retirement years.

Browse the Blog

Subscribe
Notify of
13 Comments
Inline Feedbacks
View all comments
Bob Wilmes
Bob Wilmes
20 days ago

If you haven’t spent a summer in Arizona, you might want to hold on to your Oregon house for awhile. Not only is the drought and Colorado river water shortage impacting the state, it is a special kind of place when the summer heat reaches 115-120 degrees.

My wife and I love Arizona and we own a condo in Scottsdale, but we now live in a green climate in the Midwest where I especially enjoy the summer tomatoes from a nearby farm stand.

kristinehayes2014
kristinehayes2014
19 days ago
Reply to  Bob Wilmes

We’ve spent a few weeks in Arizona in the summer and have definitely experienced the 115 degree days. My husband worked in Saudi Arabia for awhile, so he knows what he’s getting into. I’m a warm weather fanatic so I’m not concerned. Our home happens to be in a 55+ community where about 50% of the residents leave for the summer. This makes it quite nice for the full-time residents since we have access to six swimming pools, four recreational facilities and a variety of indoor activities during the summer months when it’s much less crowded.

Bob Wilmes
Bob Wilmes
19 days ago

Sounds wonderful. Half of the true Zonies leave in the summer for the beach in San Diego. I used to go fly fishing up in the mountains near Farmington, New Mexico

Jackie
Jackie
20 days ago

Unless you have a big cash cushion, it seems like a good idea to use the cash from the sale of the house to live on vs paying down the mortgage on the other house.
I’m curious, what type of small business are you thinking of?

kristinehayes2014
kristinehayes2014
20 days ago
Reply to  Jackie

Thanks for your thoughtful comment.

We do have a reasonable cash cushion (about $150K), but I like the idea of using the money from the sale of the home to help us bridge the time from when I retire until I reach age 65.

The small business idea we’re toying with is a dog training business. I’ve been involved in dog training (as a hobby) for nearly 30 years. I recently heard someone use the term ‘jobby’ which is a perfect description of what we’d like to do. A hobby that pays a few bills but isn’t a 70 or 80 hour a week commitment.

parkslope
parkslope
20 days ago

Given your expertise in training dogs, I have no doubt that you can start a successful business. Our trainer is a former special ed teacher who has a six-figure gross income from private lessons and service dog training. Dog trainers are in great demand due to the pandemic puppy boom.

kristinehayes2014
kristinehayes2014
19 days ago
Reply to  parkslope

I’ve had a dog training business plan in my head for about 15 years now. I was never comfortable enough to leave behind a full-time job with great benefits in order to take a chance on my own business. Now that I’m getting closer to being able to say ‘good-bye’ to full-time work, I’m a bit more comfortable contemplating the idea. It remains to be seen if I’ll actually go through with the idea, but it’s a fun dream at the moment.

Jackie
Jackie
20 days ago

Sounds like a great idea for a small business.

kristinehayes2014
kristinehayes2014
19 days ago
Reply to  Jackie

Thanks Jackie. At the moment, I’m really enjoying thinking about how I’d run it and how much of a commitment it might be. It’s fun to dream.

R Quinn
R Quinn
20 days ago

Isn’t it generally best to enter retirement with little or no debt, especially a mortgage?

You might want to check the alternative of using a ACA exchange in lieu of that $7,000 employer premium, likely wider choice and maybe better subsidies.

Perhaps you know, but once you are both on Medicare your premiums for Part B, Part C and Medigap coverage can easily be over $7,000, likely more (unless your former employer also provides Medigap coverage) and that’s assuming no IRMAA premiums.

kristinehayes2014
kristinehayes2014
20 days ago
Reply to  R Quinn

We could pay off our mortgage, but I’m more inclined to keep the money to cover living expenses, at least at this point.

As for the ACA exchange, a quick check shows the premiums (for myself only) would be just about $7000/year with higher deductibles, higher out-of-pocket costs and less comprehensive coverage. Besides, with my employer coverage, the coverage can be ‘inherited’ by my husband. Should I die first, he would get 100% of the benefit that would have been paid to me.

And yes, my employer does provide Medigap coverage for myself, and my husband, for the rest of our lives.

R Quinn
R Quinn
20 days ago

That is a very generous part of total compensation – tax free too.

kristinehayes2014
kristinehayes2014
19 days ago
Reply to  R Quinn

That one benefit (lifetime health care coverage) is pretty much the only reason I’ve stuck around for as long as I have. I’ve never heard of any other employer (except for a few other higher ed institutions) that offer such a benefit.

Free Newsletter

SHARE