Five Retirement Dream Home Mistakes to Avoid!

Many people dream of retiring to warm weather states like Florida or Arizona and spending leisurely days golfing, fishing or walking along the beach. But those dreams can easily turn into a big retirement mistake. As great as it may feel to retire in a bucket-list destination, moving to a new home in an unfamiliar area requires a careful plan. Take care to avoid these pitfalls when relocating for retirement.

1. Don't get stuck in a location just because of its beauty or weather. Retirement home decisions must take into consideration much more than the area's scenery. "While it may seem great to live out retirement in a sunny state, it may not be as glamorous as you think," says Ben Barzideh, a wealth advisor at Piershale Financial Group in Crystal Lake, Illinois. "We've seen people move to a state and buy a retirement home, and they are bored and miserable and want to come back. They sell the home, sometimes at a loss."

Some people who live in colder climates decide they want to retire in Florida without really knowing what it's like. "They’ve never lived in Florida, don't know about the weather and the traffic, but they are in a rush to buy a house," says Dan Routh, an associate advisor at Exencial Wealth Advisors in Oklahoma City. He suggests that you go to Florida and rent for a year to see if that's a place you want to live.

Think twice before being lured in by the beauty of a rural setting. It might be "a pretty place in the woods, but far away from shopping, your doctor, kids and grandkids," Barzideh says. "Is it close to airports? In the first decade of retirement, people travel a lot if they are healthy."

Access to health care and health professionals is another important consideration. "When you age, you need access to specialists," Barzideh says. "Are there specialists within a half hour, or will you have to drive two hours?"

Determine if you will have access to the things that are important to you for an enjoyable retirement. You might not want to move to another state if being near children or grandchildren is a priority. "Some people may think their dream is to go out in the country and get space," Routh says. "Do you really want to retire to a beach house that is two hours away from the airport and family?"

2. Make sure your home is built for aging in place. A large home with lots of stairs may not be a good fit as you get older. "Make it a place that you will live in for the rest of your life – 36-inch doorways for wheelchair access, a walk-in shower," says Joe Wirbick, president and founder of Sequinox in Lancaster, Pennsylvania. "I was looking for a home in Arizona and the homes with stairs cost significantly lower. Nobody wants stairs."

If you buy a multilevel home you may end up selling it again or having to do expensive upgrades when you need more age-friendly features. "Don’t think we are invincible to our bodies aging," says Bryan Bibbo, a financial advisor at JL Smith Group in Avon, Ohio. "That's something people underestimate. They should consider a ranch-style home or a house that has a master bedroom and bathroom on the main floor."

3. Don't tie up all your cash in a house. Financial planners generally recommend against paying for a retirement home with cash. Wirbick suggests using enough cash for a large down payment, but taking out a mortgage on the property, if you can. "With interest rates where they are, I'd rather you keep your cash than dump it all into a home," Wirbick says. "If you put your cash in a home, you may not get it back out."

While many people want to enter retirement with no debt and no mortgage, sinking all of your cash into a new house means you can't use the money for other purposes. "Today people can still get a relatively low rate on a mortgage," Routh says. "You'd be better off taking out a mortgage and putting down something."

4. Consider long-term housing costs. When you buy a retirement home, you need to determine if you can continue to afford the housing costs throughout retirement. “You do not want to overburden yourself with a mortgage," Bibbo says. "Don't exhaust your resources." If you live into your 90s, you need to make sure you will still be able to afford that monthly payment.

In addition to your mortgage payment, you will probably have other monthly expenses. Remember to factor in real estate taxes, and if you are moving to a place with a homeowners association, there may be maintenance fees.

You should also have an emergency fund for real estate. "We all know life happens, whether the roof starts leaking or the furnace breaks down," Bibbo says. "Have a pool of money for unexpected and ongoing maintenance on your home or vehicle." That emergency fund should not be in the market, Bibbo says. It should be in an account that does not fluctuate in value.

Also, be prepared to manage costs as a widow or widower. When one spouse passes away, you will go from having two Social Security payments coming in to only one. If the spouse who keeps up with maintenance passes away first, you might need to hire someone to help around the house.

5. Don't forget to factor in taxes. Before moving to a new location, consider how much you will pay in taxes. You should look at real estate taxes, sales taxes and how your retirement income will be taxed. Find out if the state taxes your pension and Social Security income. Some states have estate and inheritance taxes that apply to those who plan to leave significant wealth to the next generation, while many other states have none. Pay attention to how moving to a new state could change your tax bill.

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Preventing Dehydration in the Elderly

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Certified Senior Housing Professional Su Swanne

The Seniors Real Estate Institute congratulates Su Swanne - Realtor, Long Realty in Tucson on becoming a Certified Senior Housing Professional (CSHP).
Thank you, Su, for choosing to serve seniors!
Connect with her at: TheRealEstatePage.Biz

I am delighted to receive this honor. It signifies that I have dedicated my time and energy, and lifetime experience, to serve the needs of seniors who are moving from one home to another as they journey through their life. Their needs are often more detailed and complex than "ordinary moves", and there are always the factors of fear and emotional attachments to consider.

I appreciate your support as I move into this area of expertise while serving my clients. If you know someone who is considering moving, but is hesitant, I would appreciate the opportunity to have a conversation about what that move might mean. It's better to plan in advance than have to make a decision during a crisis. 

Contact me via email, phone, or text to arrange a confidential, no-obligation consultation.

Retiring with Debt? More American's Are. Here Are Some Stratagies

DETROIT – Rhonda and Lonnie Edwards Jr. had good middle-class jobs most of their lives. He worked nearly 35 years in an hourly union job at General Motors. She had a job in Detroit Public Schools for 13 years as an attendance agent and earlier as a parent liaison. She later worked for the state unemployment agency for another 10 years. 

"We were just middle-income earners. My goal was to be debt free by the time we retired," said Rhonda Edwards, 63. 

Things didn't quite work out that way. The medical bills hit after Lonnie, now 67, was diagnosed with prostate cancer in 2007, just three years after he had taken an early retirement in his 50s.

Around the same time, their finances took a dive during the depths of Detroit's housing crisis when they had plans to move to a smaller co-op but had trouble selling their family home in the well-regarded University District in Detroit and ended up in foreclosure. 

"We had a rude awakening that something was really going bad in the economy," she said. 

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Older Americans increasingly are discovering that retirement might not go as smoothly as brochures for retirement communities and river cruises across Europe suggest. 

Carrying a boatload of debt, facing job cuts and dealing with bad health news make it tougher to pay the bills in retirement than many expect, even long after the Great Recession officially ended in 2009. Some, such as the Edwards family, are able to eventually work through their financial struggles in retirement. But the financial curveballs can be stressful nonetheless. 

American families just reaching retirement or those newly retired are more likely to have debt – and higher levels of debt – than past generations, according to an Employee Benefit Research Institute study of debt of the elderly and near elderly from 1992 to 2006. 

About 53 percent of households ages 55 or older had some level of debt in 1998. That number climbed to 68 percent in 2016.

Why such a dramatic increase? 

"Debt has certainly become more acceptable," said Craig Copeland, senior research associate for EBRI in Washington, D.C.

Many people want more manageable payments, so they reject the idea of taking on the higher payments associated with a 15-year mortgage – and many may have bought homes in their 40s or 50s. 

"Some people have, instead of downsizing, up-sized as they've gotten older. And if they've taken a 30-year mortgage, that certainly would make them be in debt into their 70s," Copeland said. 

"The biggest bulk of the debt is the mortgage debt." 

According to the nonprofit Employee Benefit Research Institute, the average debt in families age 75 or older was $36,757 in 2016. That is up from $30,288 in 2010.

Debt can have a significant impact on one's sense of financial security in retirement – and ability to deal with unexpected expenses – especially if they don't have a steady pension or anything even close to a six-figure amount saved up in a 401(k) plan. 

"People are going into retirement less prepared," said Donna McNeill, chief operating officer for GreenPath Financial Wellness, a national nonprofit based in Farmington Hills, Michigan. 

The safety net of a pension and retiree health care from an employer-sponsored plan is not the scenario many people are looking at today, she said.

Like it or not, more people may need to cut up some credit cards before they retire and re-evaluate whether they should retire in their late 50s or early 60s.

Some strategies worth considering if you are in or near retirement:

Focus on ditching the debt

"You have to be smart in how you tackle your debt," Copeland said. 

Ideally, pay off your highest-priced loan before you retire, including credit cards that might be charging 15 or 20 percent. 

Maybe even sell the family home to pay off that mortgage and downsize to a less costly home to live in during retirement.  Given that home values are on the rise in many communities, many families no longer risk going into foreclosure or losing money selling the family home as was the case in 2007 or 2008.

In some cases, people might even be able to use some of the equity they've built in the home to deal with other expenses in retirement. 

Get a game plan for how to pay the bills

Some people do need extra help when it comes to budgeting, like finding an app such as Mint and Wela. Some apps, though, could have promotions for credit offers included in the platform, so consumers should avoid being tempted to apply for other loans or credit cards. 

GreenPath Financial Wellness, a nonprofit service, offers a "Wellness Wallet," a free personal financial management tool via the app store. 

GreenPath also introduced a new program late last year called the Simple Payment Plan, which involves a partnership with EarnUp, an automated loan payment platform.

The tool currently is free for the first year, thanks to a sponsorship from Freddie Mac. The monthly fee later will be $19.95. GreenPath's number is 877-663-0143. 

The tool – which can be used by any age group – automates debt payments such as an auto loan, mortgage and student loans. The objective is to help consumers pay bills on time to avoid late fees, as well as paying down debt.  

GreenPath's financial counselors review clients' loans and expenses to help them determine the debts that should go on the Simple Payment Plan. The payment schedule takes into account when the consumer is paid. The idea is to set it and forget it. 

The consumer can opt to round up payments to save interest over the life of the loan. The increasing rate of consumer debt and low home ownership rates indicate that average Americans can use help managing their debt, according to a statement from Freddie Mac. 

Enrolling in automatic payment plans via utility companies and others might also help older consumers if they're dealing with health issues or dementia to ensure that bills get paid on time, according to James Ellis, a personal finance researcher for ValuePenguin, a financial website. 

Some consumers may want to cut back on bills and limit their credit-card spending to one or two cards, instead of five or six credit cards. Consumers can also sign up for bill reminders via text or email. 

Learn now to deal with life's letdowns

Rhonda Edwards, who retired in 2014, said she and her husband chose to retire relatively early, he at 54 and she at 59, because it was something they had planned to do for many years. 

"Lonnie’s mother and father passed away at 33 and 57 years old, respectively, while my father and mother died at 49 and 55," she said. Her mother died nine days after the birth of their first child.

"We understood that tomorrow is not promised to anyone, and we wanted to do something our parents never experienced; retire with a decent measure of health and quality of life to look forward to," she said. 

When they started facing challenges over which bills to pay, they decided to get help and turned to counselors at GreenPath to get a better handle on their finances. They were clients before the housing crisis hit. 

Today, they continue to pay off some debt but say it's manageable. 

"We're not debt-free but we're not swimming in debt, either," she said.

She was glad that they had outside help as they worked through their medical bills and the foreclosure. At times, she said, they were so stressed that they weren't sure how to prioritize the most important bills to pay with the money they had. 

"Everybody needs to know where they stand financially," she said. 

Using Nutrition as Medicine

PHILADELPHIA — Feliciano Pagan stood at his front door when the MANNA food truck pulled up to his two-story brick row home.

Pagan, 48, greeted the driver with a smile as he carried in two large bags filled with frozen dinners and fresh fruit that would last a week. Among the goods were chicken fajitas with brown rice and zucchini; chicken dumplings, carrots and beets; and sweet-and-sour pork chops with turkey noodle soup.

These medically tailored meals — all with limited salt and carbohydrates — are designed to keep Pagan, who has congestive heart failure, out of the hospital. Health Partners Plans, the nonprofit company that runs the Medicaid health plan Pagan belongs to, is betting on it.

Since 2015, Health Partners has joined a small group of insurers around the country to offer some members specially designed meals to improve their health. The company paid the full cost for 560,000 meals to be delivered to more than 2,100 of its members with various conditions such as diabetes, heart disease and kidney failure.

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The Metropolitan Area Neighborhood Nutrition Alliance (MANNA), a Philadelphia-based nonprofit organization that provides medically appropriate food for people with serious illnesses, prepares and delivers the meals.

The service covers three meals a day and typically lasts six weeks, although members can renew for two additional six-week cycles. It also provides nutritional counseling. MANNA provides the meals to everyone in the household to help family members support patients who need to change bad diets. Health Partners, which serves Philadelphia and nearby counties, said its investment is paying off.

With the kick-start that comes from receiving these free meals and continued counseling to shop better and prepare healthy meals, the members are better able to control their diabetes, use the hospital less and reduce their medical costs, according to the health plan.

"We wanted to see how this would work out and we are quite pleased that with the cooperation of our members we did see a dramatic reduction in their costs … and improved outcomes," said William George, CEO of Health Partners.

George would not disclose how much his health plan pays for meals, although one industry expert said it costs less than $15 a day per member.

The growing number of "food as medicine" programs nationally are aimed at improving nutritionamong adults with serious illnesses to help them heal, recover from medical procedures and control chronic diseases.

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The Talk to Have With Your Kids Before You Retire

Your retirement could have an impact on your children, especially if you plan to move or are helping them financially. (Getty Images)

Baby boomer parents need to add an important item to their retirement checklist: A conversation with your kids to discuss how your life will change in retirement.

It can be uncomfortable for some parents, but you need to prepare your children for your impending retirement. “It’s important to start financial discussions early in retirement,” says Dana Anspach, CEO and founder of Sensible Money in Scottsdale, Arizona. “If you’ve established open lines of communication, it makes things easier in later years when cognitive decline can impact decision-making."

Here's what you need to tell your children about your retirement:

Give plenty of notice. Your retirement could have an impact on your children, especially if you plan to move or are helping them financially. Bryan Bibbo, a financial advisor for The JL Smith Group in Avon, Ohio, recommends informing your children of your retirement intentions five years prior to leaving the workforce. "It gives them ample notice," Bibbo says. "Continue to remind them every six months to a year.” 

Share financial information. Some couples do not want their children to know the details of their finances, while others share information and even involve their children in the process. “Be more open and honest with your kids about your financial information,” says Joe Wirbick, president and founder of Sequinox in Lancaster, Pennsylvania. "That way the kids feel secure that Mom and Dad are OK.”

It’s important that children know if their parents are doing well or if they are struggling. “If I were struggling, and my son was doing well, he will probably want to know," says David Evans, founder of Evans Financial Group in Shreveport, Louisiana. "Let your children know you are OK or if you are not sure how you will make it because of expenses you weren’t accounting for.”

Phase out financial support. Some parents have been paying their kid's bills for years, including cellphone bills, cable bills and even mortgages. You may need to withdraw your financial support to be able to retire. “You need to cut that financial umbilical cord. You can’t afford to take care of you and them," Wirbick says. "You have to cut that out long before you retire, or you’re never going to make it.”

Disclose your estate plan. Talking to your children about who will inherit what can help to avoid confusion and sibling rivalry at a very emotional time. "It’s beneficial to talk about which child will be executor," says Ben Barzideh, wealth advisor at Piershale Financial Group in Crystal Lake, Illinois. "The child who will do most of the caretaking, it’s not uncommon for parents to leave more to that child."

Discuss your new lifestyle. A critical conversation between parents and children is how you want to live. “Do you want to live in the same city, or do you want to be a snowbird?” Barzideh asks. You might move near where your children have settled or to a place with opportunities to enjoy retirement.

It’s also important for your children to know your preferences for an assisted living facility or a nursing home when you get older. "Some want to live with their kids, some do not,” Barzideh says. Another aspect of the conversation is how you will pay for long-term care.

Prepare and share documents. There are several estate planning documents every person should have in case they become incapacitated, including a health care directive, durable power of attorney and a medical power of attorney. Your wishes should also be shared with your children. "For a lot of people, it makes sense to get a living trust drawn up, to make sure your property and after-tax investment accounts do not go through the probate process when transferring from one generation to another," Barzideh says. "Spending a couple of grand on a trust now will save thousands upon thousands and avoid the probate fees, taxes, stress and time heirs have to go through sometimes.”

[Read: How to Keep Your Grown Children From Endangering Your Retirement.]

Make a list of contact information. If children are named as an executor, successor trustee or as a beneficiary on retirement accounts and life insurance policies, make sure they know who to contact if something happens to you. “That list typically includes your accountant, attorney, insurance agent and financial advisor, if you have one, or a list of the financial institutions where you have accounts," Anspach says. “To help explain technical details, many families bring adult children to key meetings with their attorney and financial advisor. This can help adult children see that your advisors have your best interests in mind.”

Consider giving your children a list of the people and institutions you are working with. "It is good to know what institutions your parents have accounts at. It is a nightmare when there is not that conversation," Barzideh says. "Parents pass away and kids don’t know where to start. Those are important things to go over with your children."

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