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Retirement Investing - Active Adult Retirement Communities

November 8th, 2006 by Papabear

The word ‘active’ in Active Adult retirement communities doesn’t mean that you have to be an athletic person to want to live there.  ‘Active’ actually refers to a community with lots of choices and opportunities available for people to participate in.  While these communities certainly may offer golf, tennis, swimming, hiking and other athletic activities, they also offer things like bridge clubs, reading groups, choral groups, and the like.

Social life is an important aspect of Active Adult retirement community living and these retirement communities provide ample opportunities for that.  Indeed, people looking into Active Adult retirement communities tend to look at the lifestyle choices first and the housing second.

Active Adult retirement communities often have a minimum age restriction.  These age-restricted communities are often referred to as 55+ Active Adult, and at least one person in the family has to be 55.  Age-restricted retirement communities don’t allow children as residents even with a 55+ family member.  Other Active Adult communities are simply age-targeted with no age restrictions.  You need to be clear in your mind which type you would prefer.

While residents of Active Adult communities buy their homes…be they single family homes, apartments, townhouses, manufactured homes or whatever…they also must pay homeowners fees to use the clubhouse, swimming pool, golf course, or other shared resources.  These communities will have a Community Association with Conditions, Covenants and Restrictions (CC&Rs) as well as association fees to cover things such as maintenance, landscaping, security, activity fees and the like.  Be sure to read the fine print carefully as these charges could mount up significantly and wreak havoc with your retirement investment finances.

Another thing to be aware of when planning your retirement move is that Active Adult retirement communities are usually not equipped to provide health care or assisted living services.  While you may not plan on needing such services, your retirement investment planning should take that need into consideration.

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    Retirement Investing - Test Drive Your New Retirement Community - Part 3

    October 27th, 2006 by Papabear

    It is admittedly extra trouble to test drive a new area by renting there first. Maybe you’re sure you know you’ll like the area because you’ve been there on vacation several times or on business trips. But there’s nothing like investing 12 months in finding out what an area is like to live in year-round to help you avoid surprises.

    It can be one of the best retirement investing strategies you can have, because it can pay huge dividends. It can open our eyes to the reality of living in a new place full-time. This is the kind of information you need to know before you spend serious money to ship your furniture cross-country to a new area.

    Let’s say you visited Phoenix in the winter and dreamed of not having to shovel snow for days on end. I lived in Arizona for 5 years, and there is a lot to like about Arizona. My mother-in-law still lives there.

    Winter is very pleasant in Phoenix. But are you ready for 120 degree days in the summer, when your feet stick to the pavement of asphalt parking lots, and the steering wheel in your car gets so hot from being parked in the sun, that you can get blisters on your hands from touching it?

    Yes, I know you can buy a cover to keep your steering wheel cooler. But the point is, to fully experience an area you might be considering making a permanent move to, you need to test it out for at least 12 months first. Experience all the seasons, so you can see the good and the bad.

    Some people love the heat in Phoenix. Some people spend the entire summer under an air conditioner and never go outside, at least in the daytime. If you like to walk for exercise, you’ll have to do it at 5am, like my mother-in-law, before it gets unbearably hot. Only you know what you like and what you can’t put up with.

    So…before you make a permanent move, check out your new area by renting there for a year. Granted - it is extra trouble and maybe a little extra expense, but it can save you from making a very costly mistake. Get to know the neighborhoods and the city. Find out about development plans. You will be able to gather the kind of information you need to make an informed decision. If you rent first and then you decide not to move, you’ll still have your house back where you came from to go back to.

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    Retirement Investing - Test Drive Your New Retirement Community - Part 2

    October 26th, 2006 by Papabear

    Yesterday we talked about renting out your house, storing your furniture and getting set up to test drive an area you’re thinking about moving to before you actually buy there. This can be one of the best retirement investments you can make. When it comes to retirement investing, it can pay you huge dividends on the money you will spend. Today we’ll talk about why you need to get to know the area better before you put spend money on a home in a new area.

    One of the big benefits you get by renting in an area before you buy is you’ll get to know the various neighborhoods. This is especially important if you’re not buying in an age restricted retirement community. In a retirement community, at least you know what kind of development will be going on around you.

    If you buy in a regular neighborhood in a town in, say, the Sun Belt, you could be in for a rude surprise. If you rent first in your new area, it will give you time to find out what the future development plans are for the area you’re considering. If you’ll start reading the newspaper and watching the local TV news, you can learn some very valuable information.

    For example, when we moved to the town where we live now, we almost bought a particular house because it was close to the local high school and had beautiful open fields behind the house. It was only by a little research and a lot of luck that we found out that the city was about to build a huge community recreational park on that field.

    Now behind the house we almost bought are youth baseball fields with stands full of screaming parents and tennis courts lighted to at least 10 o’clock every night with huge floodlights. And right next to that, they built a new football stadium for the high school last year.

    The beautiful back yard of that house is now as bright as daylight at 10 pm, and the floodlights shine right into the back windows of the house. And of course, if we had bought that house and decided we wanted to sell it later because of these distractions, it would be worth a lot less than we would have paid for it.

    Tomorrow we’ll talk about getting to know the realities of living in a new area.

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    Retirement Investing - Test Drive Your New Retirement Community - Part 1

    October 25th, 2006 by Papabear

    Retirement investing includes more that just your retirement savings account. It also includes makes choices about where you will live. Over the next 3 days, we’re going to look at a strategy that could save you a considerable amount of money and possibly a really big mistake if you’re thinking about moving to a retirement community in another part of the country.

    Many folks relocate when they retire. Many more folks think about it but don’t do it. According to the Del Webb Company, the folks who built Sun City in Arizona, the first master-planned retirement community, 47% of those 51 to 60 years old would seriously consider moving after they retire.

    Here’s a modest proposal to think about before you make that move. Take the area you’re considering for a test drive.

    You wouldn’t think of spending $30,000 for a new car without test-driving it. You would not buy a car based on just reading the brochures and giving the car a quick walk-around. Yet every day people spend $150,000 for a small house in a retirement community of modest houses to $1,000,000 or more for a Miami condo based only on fancy brochures and a brief walk-through.

    Instead, consider test-driving your new location for a year. If you’re thinking about a particular retirement community that’s limited to seniors, you also need to check out the surrounding local area. If you’re planning to buy in a mixed residential area instead of a planned retirement community, it’s even more critical.

    In most parts of the country, it’s easy to find a real estate agent who can rent out your current home for a commission of 10% of the monthly rent. You can put your furniture in storage for about $200 a month or less, pay a small increase in your home-owners insurance and then use the rest to pay your rent in the area you’re considering moving to.

    Since you’re probably planning to downsize your house if you move after retirement, the net amount you will have from your rental income after paying the real estate agency and paying for furniture storage should cover the rent on a smaller house in the area you are thinking about moving to. Also, since it’s only for a year, a small apartment may be fine.

    You may want to take a small amount of your furniture with you in a Uhaul truck, or you can rent some furniture from one of those rent to own places. Maybe you can even find a furnished apartment.

    Today we’ve talked about setting up a test drive of your new area. Tomorrow we’ll go into a couple of real world examples of why checking out your new area could save you a great deal of money and a lot of frustration later on.

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    Introduction - Thoughts on Retirement

    October 16th, 2006 by Papabear

    I’ll be ready for retirement in a few years, so I’ve been doing a lot of reading on various retirement subjects lately. I’ve decided to start a blog about retirement so I’ll to have a place to share some of the things I have been learning. Some of the topics I’ve been studying lately include:

    * Retirement Planning
    * Different kinds of Retirement Saving Accounts
    * 401(k) Accounts
    * Borrowing against retirement savings
    * Finding money to invest for retirement
    * Dollar Cost Averaging

    I’m not a CPA or tax attorney or lawyer. So don’t treat what I’m saying as some kind of tax or investment advice coming from a professional. I’m just a person who’s being doing a lot of reading lately, and I think I’m beginning to understand some of this stuff. I trust that putting down on paper what I’ve been reading will also help me clarify my own thoughts. For professional advice, you should see a CPA or other tax or investment professional. That’s what I do. I learned to hard way to use a CPA for my taxes after I got audited a few years ago and found out I had managed to get confused on a few things when using do it yourself tax software.

    But then life, and retirement, is not all about money, so I plan to write about other things also. I’ve been reading a lot about retirement lifestyles lately, things like selecting a retirement community and staying healthy in your retirement years.

    I plan for this blog to be a useful place to post what I’ve learned, and I also want it to be a place where you can also share what you’ve learned, and what you’ve been thinking about retirement and retirement planning. If you’re already retired, I’d love to have you share your thoughts also. Right now retirement is still in the future for me so all my thoughts are theoretical. If you’re retired now, I’d love to hear about the reality of retirement.

    To start with, I’ll be posting a number of topics on the financial side of retirement and retirement planning, as well as links to news articles about retirement. After that, I plan to discuss retirement communities and other options – things like should you move when you retire, or would it be better to stay where you’re living now. After that, we’ll see where it goes from there.

    Please feel free to comment, and I hope you enjoy it. You can follow the series by checking back in here often.

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