Home Downsizing

[LivingAlmostLarge]

How do you address issues older adults may have when trying to downsize out of their large homes into condos? My parents are a bit upset over the change and the idea of a home into the condo is not going to be easy. My dad is looking forward to it, but my mom is resentful. Also is the idea that they can't have as much stuff, which she hasn't quite wrapped her head around yet.

Also finances play a huge role because it's been 30 years since they bought a home. Thus, they want to buy a home before selling their. However, they are not thinking and understanding the costs associated with this move. They are making the assumption they will be able to sell in 1-2 years at a profit or rent it out at a profit. Which is definitely NOT the case if they hate the condo they buy.

How do you deal with your parents when they say it is their money? Let them make a mistake? Do you give advice about living in a condo? Why it might be better to not buy a studio when they've lived in 4000+ sq ft home?

I'm struggling because financially my parents are majorly impulsive. They own three cars outright with 2 drivers. Sigh, they bought a pickup truck because they don't like the idea of renting a truck if they need it once a year! They do a lot of impulsive things, like trading in for a new car every 2 years or leasing because they like new cars. They've always been able to afford this, however they are moving into retirement, and the situation is about to change. I am slightly worried about them.

[mbhunter]

Re: Home Downsizing

It sounds mainly like an issue of losing social stature. I gather from your description that the house they're in now will be too much for them to handle financially in retirement. They could get a condo or even get a used trailer for $10 per square foot and be in much better financial shape. But that's unappealing to them. It probably would be to most people. But it is an option that lets them keep independence.

Gary North's Reality Check is a free bi-weekly newsletter that discusses financial planning (among other things) in a no-nonsense way. This newsletter, if they take it to heart, will get them thinking correctly. (I recommend it on by blog regularly -- it's really good.) Gary's newsletters are harsh, but he wants to help people help themselves. He may even answer their question for free if he thinks a lot of his readers will benefit. If not, ten bucks for a subscription to his members-only forum will get the question answered for sure. (I don't get a dime in commissions for this recommendation; I just really think it's worth it.)

If not, then the next step is to find someone who will tell them what they won't read.

After that, they'll find out first-hand whether they're ready for retirement or not. It's not as if you didn't try. Then the question is how do you fit into the picture? What will they expect of you?

[LivingAlmostLarge]

Re: Home Downsizing

Nah, they have more than enough money to outearn their stupidity. BUT it could happen in 20 years they don't if they keep acting stupid. Sigh. They are bad about debt, no CC debt, and leasing the car, well they say all the time leasing is okay because they can afford it. And if you have so much disposable income you might as well enjoy it. They are retiring relatively early for my mom and late for my dad. And they have a lot in the bank.

Thanks for the website.

[disneysteve]

Re: Home Downsizing

It's so hard to raise good parents these days.

I suspect that the realities of life will gradually mold their spending habits in retirement. It sounds like they've done well and never found themselves in a position where they had to be too concerned with their spending. If and when that changes, they'll figure it out and realize they can't keep spending recklessly if they want to hang on to enough money to live a certain way.

Also keep in mind that studies show that spending in retirement peaks in the first few years of retirement and then gradually tapers down as folks get older.

Do you give advice? Sure. That way they can't come to you later and say, "Why didn't you tell us not to do this?" But ultimately, they are mature adults and can make their own decisions.

I've been fortunate in this regard. My mother always solicits my input before making any major financial moves. She moved from her 3-bedroom home to a 1-bedroom apartment in June. Her house is for sale (currently under contract for the 3rd time - hopefully this deal goes through). But she (and my father) has always been sensible with financial issues (I guess that's where I get it from). So there really haven't been any of the types of conflicts that you are talking about.

Good luck. Just keep being supportive and gently discussing the issues and suggesting different points of view. There isn't always a "right" answer. What you would do might not be what they will do, but that doesn't necessarily make their choice wrong.

[LivingAlmostLarge]

Re: Home Downsizing

LOL. I'm frugal because of them. Never spend more than you make, and retirement first, then home. But after that it's sort of a spend it before you die philosophy. My parents are old school because my mom's got a pension to kill for. That in itself pays huge dividends for them. Plus she'll have free medical for her and my dad for the rest of their lives.

I wish they would rent before leaping into something. I think losing a home is a huge adjustment, one which many people don't realize how difficult it is to live with neighbors. I hate it, but my parents haven't got a clue. They think it's so easy, but they way they live. They have two refrigerators and a freezer for two people (a war is coming). 6 tvs, 3 cars, tons of stuff. The list is endless. And I mention their dining room tabel won't fit in a small condo, they say no way.

Their idea is to buy a home and if they hate it discard it like a sweater. Sigh. This is how when I was growing up we'd end up with a new car every year or two.

[PrincessPerky]

Re: Home Downsizing

My MIL is currently agonizing over a similar situation with her mom..(old gma) and well, truth is the woman lived thru the depression.....I think she can prolly handle it...no not they way MIL wants her too, but no one said MIL was going to get it all her way, after all her DIL (me) is totally wrong!

I do think suggestions advice, ideas, kindly put examples are useful, but in the end, what is really important should be your relationship with your parents, no weather they are right or wrong about money.....