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Write an article about She’s 71 With No Retirement & This is the Advice She Gets? in English
You boomers had it made when you people did jack shit in your life, and yet you could afford a roadster and a 1/4 million home.
Yep, some really stupid advice out there. My own aging parents were duped by well-meaning friends and family to sell their paid-off, well-built home in the Seattle area, which they sold at a small profit for $200k 15 years ago, and rent a smaller house that included maintenance my dad could no longer do. No one had the imagination to keep them in their home years more by having them pay for the strenuous help like lawn, housekeeping, which was far less cost than the rent for the lousy small home. Not to mention their original home's value is now $800k.
Let's not name the guy. Let's just call him DR. Let me guess, he gave this person the contact info for Dr. Jack Kevorkian at the end of the call.
Please get to the root cause. No matter where they live, the cash will be spent and no home repairs made. Freestand ing homes aren't for everyone. They need financial and marriage counseling.
Nice painting, planning in this life is like , planning to live a long . You never know when you'll need a roadster. What happens if you get a reversed mortgage and you're husband accidentally runs over you with his roadster?
Condos have HOA fees, and single family residences have maintenance costs. The only difference between the fee and the cost is that you have some control over the timing of the costs if you're smart. Condos aren't for everyone, but I don't know why people who don't pay HOAs think they're saving money. If they track their costs they're not. Everyone pays to maintain their property. There are no free lunches.
Josh,hope you are well. No post today makes me worried!
We did a RM last year, and it was the smartest financial decision I've ever made.
Some of the best advice I ever received was this. “Be careful who you date because you just might end up marrying them. “
Sounds like Mr. Dave Ramsey
I heard some very bad advice from that same guy years ago, never again did I listen to him. I felt bad for the couple then (it sounded very much like they were going to take his advice), feel bad for this woman. Financial literacy is so important.
That speech at the end about financial literacy as a method of keeping families, and subsequently a society, together gave me chills. Thank you for being the financially literate uncle I never had. Keep doing what you do!!
Common sense ain't so common.
Devin just did a podcast mentioning a HELOC instead of reverse mortgage.Can you talk about that idea?
Excellent video!! Condo fees can be upwards of $800/mo. I saw the video you're referring to…it was ridiculous and out of touch. Thank God for you, Josh.
Reverse mortgage would probably allow them to stay in place but I think they should sell a car and pay off the car loan. Also, what happens with the budget when one dies. If they take the reverse mortgage now with a fix income stream can they handle loosing one social security income.
thank you,,, josh,,,, for explaining it straight,,,,,!
I say it for you ,,,, Dave Ramsey,,, I have the same opinion about him too,,,,
Debt in retirement is bad. But reverse mortgage debt is a different sort of animal. Unlike ordinary debt, you aren't obligated to repay it during your lifetime, so instead of being a burden to you, its an asset. If the children want to inherit the house, its on them to step up and pay it off after you die. This makes sense if inflation was fairly high as they get to payoff the mortgage with inflated money. In the rare case that deflation occurs, the children are probably best just walking away from the house.
If they don't take the reverse mortgage, and they are struggling to pay the bills, then they could be at risk of loosing the house if they can't pay the mortgage. So taking a reverse mortgage could actually save their house for the period that they are still alive.
$250 HOA a month in OKC is crazy for an apartments built in 1979 converted to a condo. This is also a really rough area of OKC with a lot of section 8 housing close by and a major thoroughfare that has heavy traffic all-day everyday. That complex is collecting roughly $9k in HOA fees a month and the drive looks like crap. HOA dues includes exterior maintenance, pool, water, trash, sewer, exterior insurance, lawn maintenance, and roof. google satellite view put to shame on what they are really doing with the money. Putnam city schools are low income with 80% of students on the free lunch program and predominately African American. They would be better served to look 1.5 miles south at Bethany or look 5 miles southeast at the bedroom community of Moore.
Here my angle, sell the house and roadster and take the 250k give or take at 4% in a money market fund, that would last 20 years taking 1500 a month. That gives them 3500 income a month. Rent in OKC is not that much for a 1 br apartment or house no repair cost, no HOA, no taxes and home owners insurance.
Thanks, as always!
I listened to that episode of Dave Ramsey a couple of times. She cleans houses at 71 for up to 2k per month.
Sell the house and rent. Take the $200,000 and take out a CD at 5% live your life.
Josh, I live in OK. She could sell her house and move to a more rural town just outside of OKC – I bought a 1700 sq ft house – 3 bed, 2 bath -built in 1950 for 24000 – had about 15,000 worth of work done and moved in. Its paid for … she could bank the equity and live like royalty – it takes me about $1,000 / mo to live (figuring in utilities, health insurance, auto insurance, property taxes, – which at her age could be frozen in addition to homestead exemption-, groceries & garden supplies cuz I grow veggies, etc.(and my hobby – a horse & care). I dislike apartments / condos and I'm not fond of reverse mortgages (as my child likes to say, I'm living in his inheritance), but to each his own. If she doesn't get out of stress she wont have to worry about it much longer.
Some people just don't have a brain , and can't be reasoned with .
Better to sale the house and move into their car or a used RV. You can trade RV space for work around the RV lot.
Holy Cow I was better off financially when I was 18 right out of HS. than this 71 year old. Dont know their history, but sounds like they made really bad money decisions early in life.
I am right with you Josh! In fact, I went to help a client put a portion of their Roth IRA into an indexed annuity to help reduce the volatility of their portfolio and the insurance company won’t issue the policy since the client had a reverse mortgage out!
THe HOA would be more than offset by the higher tax, insurance (personal property is cheap for the condo) and maintenance cost of the home. So that is is probably a wash. By selling the house she could gain some cash to invest (over a 100k) based on the numbers you provided. So it is not back and white.