# newbie to thoughts of retirement



## rar4710 (Aug 18, 2015)

Hi, I've been doing a lot of thinking about retiring lately and I'm 57.  I know that I would try to wait till I'm 59 1/2 so as not to incur the penalty from the IRS.  My thought was to retire at 59 1/2 and take my 401K roll part of it into a qualified account and the other part purchase a house in another state and move there.  Then get a job in the new state (one that I can just go home at the end of the day) for another 6 years.  Is that a bad financial idea?  Am I just stuck till I'm 62?

I want to be closer to my family.  I currently have a house with a little bit of equity, but I would sell it (or try to).  

Any thoughts would help.


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## hollydolly (Aug 18, 2015)

Just bumping this up for our new member Robin  in case anyone has any advice


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## Lon (Aug 18, 2015)

QUESTION---Other than your 401K do you have a Pension? Do you have any stock or bonds? Are you married?


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## Lethe200 (Aug 18, 2015)

I think you're proposing to make some very big changes in your life and really need to think about the consequences. Would it really be that easy for you to find a job that fits your criteria? For a lot of Boomers, it hasn't been. So be sure about that before you leap into anything!

You're also proposing to carry a mortgage in retirement. Not the worst idea, but not the best either, unless your retirement income will be sufficient. Will you be able to retire and manage home maintenance, auto repair/purchase, health emergencies, etc.? What will you do if not just one thing goes wrong, but several things all within a few months? 

I ask this because we've been retired for over 5 yrs. Our friends/family who did no real financial plnng, ended up having to postpone retirement because they were all caught not by just the market downturn, but by losing their jobs and having to scramble for new ones. 

Nothing wrong with being close to family. Just be aware if some of that family is younger and still working, it's not uncommon these days to have to move someplace else for the job. Happened to my nephew - had to move across country, then three yrs later his company was bought and he had to move again. His mom was just about to sell her home and move to be near them, when we got the news. She literally had already packed up everything in boxes and was within 1 month of leaving town!

No one can tell you whether your ideas are "good" or "bad". It simply depends on how well you have planned, researched, and strategized for big changes in your lifestyle. Only you can decide how much extra financial cushion you need, or what you can do without.

No one is ever really "stuck" anywhere. People move every day. Just take the time to be aware of the pros and cons of doing a big move.


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## Don M. (Aug 18, 2015)

Retirement is Great....if well planned.  Step 1 in Any retirement planning, IMO, is to be Debt Free....No mortgage, car payments, credit card debt., etc.


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## Falcon (Aug 18, 2015)

Good advice Don.   That's the key IMO.


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## imp (Aug 18, 2015)

Agree with Don, 100%!    imp


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## Underock1 (Aug 18, 2015)

Don M. said:


> Retirement is Great....if well planned.  Step 1 in Any retirement planning, IMO, is to be Debt Free....No mortgage, car payments, credit card debt., etc.



My big worry for you is your apparent need for a job. That starts to get really tough at about 50. After that, being debt free is *the *most important. The secret weapon that got us there. I went out at 63. That's against the conventional wisdom, re SS, but it worked for us. You have to live simply, but it can be done. I've had twenty happy years of it until the recent inevitable.


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## Glinda (Aug 18, 2015)

You don't say what state you'd be moving to and whether this would require a mortgage.  I almost quit and moved to another state when I had about 6 working years to go.  I ultimately decided against it.  It was difficult and very stressful but I believe I made the right decision and am better off both financially and emotionally as a result.


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## Bullie76 (Aug 19, 2015)

Underock1 said:


> My big worry for you is your apparent need for a job. That starts to get really tough at about 50. After that, being debt free is *the *most important. The secret weapon that got us there. I went out at 63.



Debt free is very important. I agree on the need for a job. That would be a concern at the OP's age. If only a part time job is needed, that might be doable. Places like Walmart and Home Depot will hire seniors. 

Without knowing more of rar's financial situation, hard to give decent advice.


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## Sunny (Aug 19, 2015)

I agree with the debt free part, all except the necessity to be free of a mortgage. As long as the retiree has sufficient income from pensions, social security, annuities, etc. to handle a (relatively small) monthly mortgage payment, it is probably better to hold a mortgage than to have all one's cash tied up in a house. Many retirees have refinanced their homes to take advantage of lower mortgage rates, and to have more cash for their needs. And there is a tax advantage. The trick, of course, is to keep the monthly payments down to what is affordable.

I think "rar" could use the services of a good financial planner before taking any drastic steps.


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## Don M. (Aug 19, 2015)

Sunny said:


> I agree with the debt free part, all except the necessity to be free of a mortgage. As long as the retiree has sufficient income from pensions, social security, annuities, etc. to handle a (relatively small) monthly mortgage payment, it is probably better to hold a mortgage than to have all one's cash tied up in a house. Many retirees have refinanced their homes to take advantage of lower mortgage rates, and to have more cash for their needs. And there is a tax advantage. The trick, of course, is to keep the monthly payments down to what is affordable.
> 
> I think "rar" could use the services of a good financial planner before taking any drastic steps.



The Problem with carrying a Mortgage is the money that goes to the Interest on the loan.  For example, if a person buys a house for $200K, and takes out a 30 year mortgage, they will ultimately pay almost $350k for that house....even at today's relatively low rates.  That is $150,000 that flows from their wallet to the bank...and does them No Good.  They can capture a small portion of that back by claiming the mortgage interest at tax time, but they will still be out well over $100K...most likely $120K, by the time the house is paid for.  

IMO, there is no such thing as Good Debt...especially for someone in, or near, retirement.  About the Only good aspect of home ownership is that when it comes time to sell, a person gets back Part of their investment...after making payments, paying property taxes, and home repairs/upkeep, etc., etc.  In that regard, buying is a far better option than renting...where all a person has to show for their time in a rental property is a box of rent receipts.  

I would FAR rather be debt free, than to be subsidizing the banks.


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## Lethe200 (Aug 20, 2015)

Don M. said:


> ...IMO, there is no such thing as Good Debt...especially for someone in, or near, retirement.



I have younger Boomer friends who are multi-millionaires, having ended up earning far more $$$$$ than they had thought possible. Almost all of them took early retirement - only two stayed at their original jobs. The remainder retired to do a variety of interesting things. In almost all cases it was actually much more advantageous for them to refinance when rates were low and have the interest deductions. 

Obviously the OP is not in that kind of position, but one should be careful about making blanket statements. Your opinion is merely your preference. Although it is a conservative and prudent position, it is not always the best plan of action for everyone, every time.


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