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    House Rich and Cash Poor

    So I have a coworker who is 84 years old. She is divorced with 1 child and lives in her house that is paid off. She works for money because her SS and investments I guess aren't enough. She is a admin at the front desk and she loves to travel and would love to see her sorority sisters and do that sort of stuff. She has cancer as well. I made a suggestion that she sell her house and use the money to live. I'm not sure what the house is worth but at least $500k to be conservative. She says she can't. Where would she live? I point out that with $500k if she lived another 15 years (highly unlikely) that would be an extra $30k/year. She could use that money to rent a 1 bd apart for $1000/month and then not pay maintenance or property taxes on the house.

    I don't get it. Why would anyone just be struggling to drive, struggling to work to pay for a home? I worry because she came in with a bruise from falling down some stairs and I said are you sure you should be living in your house? I get working to keep busy and active and mentally sharp. But seems a little crazy to keep a house at an age when I doubt she'll run out of money? Unless of course it's in a trust for her kid so that she can leave it to her daughter and she is basically broke?

    Is this typical of older adults?
    LivingAlmostLarge Blog

    #2
    Many older people don't want to leave their homes despite all you hear about people retiring to Florida or Arizona or wherever. The vast majority want to live out the remainder of their lives in the home they have been in for decades. So that's probably one factor here.

    Another factor is that picking up and moving at 84 years of age isn't such a simple task, especially if her health is failing. Moving is very stressful both mentally and physically and maybe she just isn't up for that adventure.

    This is a big reason why reverse mortgages have become a big thing. They're a total rip off but they do provide a way for people to pull money out of their homes to cover living expenses without having to sell the house.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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      #3
      reverse mortgage.

      or you could consider the fact that she may want to pass down the house to her child. Many parents wish to leave something for their children to make their lives easier when they pass away. And the house may be it.

      She's making a sacrifice by working and living off those funds to pass down her property.

      Comment


        #4
        I think it's because something happens to our brains as we age. It's harder to make changes. I sure hope to heck we are out of our house before we get too old to want to leave. It's probably not so much that she doesn't want to sell as it is thinking about how the heck am I going to do this by myself? Can you imagine, packing up a house you've lived in all your life. It's a big job. Heck I'm trying to declutter now in anticipation of moving some day.

        And I seriously think I'd like to just rent so we don't have to worry about maintenance or yard work.

        Comment


          #5
          At 84, she may have lived in that home 50+ years depending on the situation. It is not easy to just up and move. You gave her something to think about though. My parents 68 and 70, in very good health, sold their 3.5 acre 4000 sq ft home to move to an 1600 sq ft apartment about four years ago. They love it! It was A LOT of work to downsize, but no more lawn care and snow removal duties, or home maintenance to take care of. They did have a bad neighbor tenant to deal with one year, but since then all has been well.
          My other blog is Your Organized Friend.

          Comment


            #6
            Originally posted by Thrif-t View Post
            I think it's because something happens to our brains as we age. It's harder to make changes. I sure hope to heck we are out of our house before we get too old to want to leave. It's probably not so much that she doesn't want to sell as it is thinking about how the heck am I going to do this by myself? Can you imagine, packing up a house you've lived in all your life. It's a big job. Heck I'm trying to declutter now in anticipation of moving some day.

            And I seriously think I'd like to just rent so we don't have to worry about maintenance or yard work.
            That's actually a really good point. I'm relatively young, and am COMFORTABLE with certain things. I can imagine this feeling takes hold even stronger as one ages. If you lived in a house for 50 years, it's very traumatic to suddenly have to move to new surroundings. Other people might like things that are new, exciting, sparkly, but I like what's familiar and what I like. I can either go and try a brand new restaurant and possibly really like it (or not) OR I can go to a restaurant that I know I like. She likes her home and wants to maintain the status quo. Even the reverse mortgage thing with bankers and lawyers and mountains of contracts is going to be upsetting for her.

            Comment


              #7
              I can see that it would be hard. I guess it's easy to save move because she fell down the stairs and looked awful. But what do you do? I mean I think she's insane what if she falls and breaks a hip and no one finds her until her daughter goes? Seems so risky. I wonder if this is how many older people get stuck in homes?
              LivingAlmostLarge Blog

              Comment


                #8
                Originally posted by LivingAlmostLarge View Post
                I can see that it would be hard. I guess it's easy to save move because she fell down the stairs and looked awful. But what do you do? I mean I think she's insane what if she falls and breaks a hip and no one finds her until her daughter goes? Seems so risky. I wonder if this is how many older people get stuck in homes?
                probably.... to be honest, I live alone now, so if I fell and cracked my head open and died, no one would find me probably until a week later or something. And only discover it because my workplace would end up calling my emergency contacts eventually because of the no call no shows. Not being in continuous contact with friends and family wouldn't arouse enough suspicion from them to actually physically check to see if something is wrong.

                Comment


                  #9
                  Maybe you've already thought of this, but you might offer to you co-worker to help her declutter, distribute unneeded possessions, pack, get that house sold, and move to a more appropriate place. Maybe your family could work together with her daughter and any grandkids and great grandkids, nieces & nephews. The actual help would be a lot more supportive than just the advice.
                  "There is some ontological doubt as to whether it may even be possible in principle to nail down these things in the universe we're given to study." --text msg from my kid

                  "It is easier to build strong children than to repair broken men." --Frederick Douglass

                  Comment


                    #10
                    Originally posted by LivingAlmostLarge View Post
                    So I have a coworker who is 84 years old. She is divorced with 1 child and lives in her house that is paid off. She works for money because her SS and investments I guess aren't enough. She is a admin at the front desk and she loves to travel and would love to see her sorority sisters and do that sort of stuff. She has cancer as well. I made a suggestion that she sell her house and use the money to live. I'm not sure what the house is worth but at least $500k to be conservative. She says she can't. Where would she live? I point out that with $500k if she lived another 15 years (highly unlikely) that would be an extra $30k/year. She could use that money to rent a 1 bd apart for $1000/month and then not pay maintenance or property taxes on the house.

                    I don't get it. Why would anyone just be struggling to drive, struggling to work to pay for a home? I worry because she came in with a bruise from falling down some stairs and I said are you sure you should be living in your house? I get working to keep busy and active and mentally sharp. But seems a little crazy to keep a house at an age when I doubt she'll run out of money? Unless of course it's in a trust for her kid so that she can leave it to her daughter and she is basically broke?

                    Is this typical of older adults?

                    Pretty easy and effective solution for this: Reverse mortgage.
                    How can you have any pudding if you don't eat your meat?

                    Comment


                      #11
                      Originally posted by TexasHusker View Post


                      Pretty easy and effective solution for this: Reverse mortgage.
                      Isn't that expensive? Do you have until you tap 50% equity in the home? Or does it depend on which reverse mortgage?
                      LivingAlmostLarge Blog

                      Comment


                        #12
                        Originally posted by LivingAlmostLarge View Post

                        Isn't that expensive? Do you have until you tap 50% equity in the home? Or does it depend on which reverse mortgage?
                        Like standard mortgages, reverse mortgages come in all shapes and sizes. Like any other financial product, reverse mortgages can be a really good deal, or a ripoff.

                        For someone who has a paid-for home but little income, a reverse mortgage is a no-brainer.
                        How can you have any pudding if you don't eat your meat?

                        Comment


                          #13
                          Originally posted by LivingAlmostLarge View Post
                          I made a suggestion that she sell her house and use the money to live. I'm not sure what the house is worth but at least $500k to be conservative. She says she can't. Where would she live? I point out that with $500k if she lived another 15 years (highly unlikely) that would be an extra $30k/year. She could use that money to rent a 1 bd apart for $1000/month and then not pay maintenance or property taxes on the house.
                          LAL - it's possible she already has a reverse mortgage. If she says she can't and where would she live, it may be because she knows that if she sells she'll end up with very little or nothing. And if she does already have a reverse mortgage, she may not want to tell you. Often there are many other pieces of a person's finances that a casual outside observer may not know, and probably has no business knowing.

                          Comment


                            #14
                            Nope she just can't seem to think about selling. I think it's too overwhemling. Too bad since I worry she'll fall down the stairs and break her neck.
                            LivingAlmostLarge Blog

                            Comment


                              #15
                              Sentimental value often trumps all over values. I know someone in their 50s who lost their husband. He was in ministry, and he opted out of SS years ago (You can do that early on when you become a minister if you claim to not believe in government support for religious reasons, meaning you will never pull SS). Well, along with that he didn't believe in life insurance either. I'm not debating his feelings, although I do not agree with them, but the point is that it left his wife without anything when he unexpectedly passed away almost three years ago. The main income was his ministry income. She did make a small amount working in the office for the church. They had a pretty big inheritance years before, and he put it all into a nice house. His feeling was that she could sell the house and live off that if needed(my guess is 200-300k value). To this day, over two years later, she is struggling to make it and refuses to sell her house. The house takes up the memories of the family, so letting go of the house is like letting go of your family. It is sad.
                              Everything happens for a reason. Sometimes that reason is you're stupid and make bad choices.

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