My financial advisor always talks about “65-year-old Nancy,” and how we have to consider her when making financial decisions today. 65-year-old Nancy is the reason I need to keep working at a job that I find spiritually unsatisfying, because not only do 58-year-old Nancy and her 22-year-old kid need to live TODAY, 65-year-old Nancy needs to be able to live comfortably a mere seven years from now (it used to be more years but, man, do they zip by quickly, which makes 65-year-old Nancy’s plight that much more urgent).
When my mother passed away, she was able to leave my sister and me a small nest egg, mostly derived from my deceased father’s assets but also wisely invested, and my cheapo mother never needed to dig into the pot to cover unanticipated expenses, like both her daughters have done with some frequency. (My mother also never paid full price for anything; it was always coupons and store brands, even though, in my mind, we were reasonably well off and didn’t have to scrimp.) Over the past seven years since her death, I have slowly but surely whittled down a $350,000 inheritance to little over $100,000. (And don’t even get me started on the $35,000 she left for my daughter, who, as soon as she turned 18 and was entitled to access the funds, spent it all – every damn penny – despite my entreaties to set some aside in a CD or money market account so she might have some left over for college or a car or something substantial.)
The bulk of my mother’s money went to into my house. Insurance didn’t pay enough to cover the renovations after the storm, and then the elevation, despite the generous grant from New York State’s New York Rising program, was more costly than anticipated when, in the course of lifting, the entire rear of the house practically fell off and ultimately had to be demolished and rebuilt. Of course, this resulted in my having two-thirds of a brand new abode, but it also meant that my assets were no longer in the form of (easily liquidatable) stocks and bonds and REITs but in real estate instead, which will only be realized once I sell the house.
This raises all sorts of questions about my future. My daughter has stated in no uncertain terms that she wants to keep the house, which creates a small problem: If I don’t sell the property, I don’t get the benefit of my investment. So that’s one hurdle to overcome. The other is actually selling the house for what it’s worth, given that it will need new floors throughout thanks to my pet pee situation. And it’s also dependent on the economic environment, which I think right now is a buyer’s market given the glut of distressed lots and rebuilt homes since Sandy. Sky-high property taxes will be a further consideration for anyone contemplating buying a home in Long Beach (that is, if there even IS a Long Beach if another one of those “100 year storms” rolls around).
The key may be to sell sooner rather than later, my daughter’s wishes notwithstanding. She’s presumably going to be traveling the world working with endangered animals anyway; why would she want to come back to lovely but boring old Long Beach? So her future factors into this, too, not just 65-year-old Nan’s.
Let’s say I sell within the next 3-5 years. Would I go on to buy another place, or maybe just rent? There are benefits and drawbacks to both. I enjoy having SOMETHING to show for the money I pay every month, even if I do share it with a bank. With rent, it’s basically just throwing money away for the privilege of living in someone else’s investment. But as I’ve discovered over the years, home ownership is a royal pain in the ass when it comes to maintenance and repairs. It was a pleasure, when I lived in the apartment last year, to have someone take out the garbage and shovel the walk (even if I never actually took advantage of my on-site super to fix things like the leak in my kitchen sink because I didn’t want to him to know I had a bunch of cats in the apartment!)
But the biggest question is, WHERE DO I GO?? One thing that’s quite clear is that I want to be somewhere much warmer than here, without the snow. I’d also like to avoid major storms and weather events like tornadoes and wildfires and natural disasters like earthquakes and floods, which kind of limits my choices since nearly everywhere in the world has its own local destructions.
Plus, it’s got to be a lot less expensive than living in New York, because the taxes and cost of living here are probably higher than they are nearly anywhere else in the country, let alone the world. If I’m going to be depending on Social Security and whatever remains of 65-year-old Nan’s paltry investments (including my meager 401(k)), there’s going to be a lot less money coming in (although I can probably come up with some online work – or, dare I say it, freelance writing? –to make ends meet). And because I’ll be older, I’ll need someplace with dependable health care, which pretty much puts me out of the United States since our health care system here is an obscene embarrassment compared to the rest of the civilized world.
And what happens with my animals? I’m up to eight permanent members of my furry family – five cats and three dogs – although realistically not all of them will be living three to five years from now. If I move out of the country, will I have to quarantine them? Can I ship them by boat or airplane? The logistics are kind of daunting. And if I do decide to rent, not everywhere is pet-friendly (especially with SO MANY creatures).
Clearly, I need to do more research, but two places keep popping into my head – one domestic and the other international. On the domestic side, I’ve heard good things about Delaware. I could live in one of the many lovely beach towns, so I’d be able to continue enjoying coastal life with less of a hurricane threat than Florida (or even Long Beach) and a slightly more temperate climate than New York (although with global warming, the mid-Atlantic states are seeing more snow than ever – ugh!). Perhaps best of all, I’ve heard that Delaware is one of the most tax-friendly states for retirees and seniors, featuring no sales tax, low state income tax, and no tax on Social Security benefits. As an added bonus, I’d still be close to friends and family who live in the New York area, and even closer to family and friends on the Delmarva Peninsula and North Carolina.
On the international front, though, there’s Costa Rica. I’ve never been, but my daughter has, and she always raves about how much it appealed to her. (“Costa Rica has a piece of my heart,” she says.) Conceivably, if I moved there, she could come with me and pursue her career in wildlife conservation in an amazingly rich ecosystem. It would also be a great place for the aforementioned friends and family to visit. From what I’ve read and seen (Darian posted a great video on Facebook the other day that I keep revisiting [https://www.facebook.com/worldeconomicforum/videos/10155046651386479]), Costa Rica is a thoroughly modern tropical paradise: low crime and cost of living, high regard for the environment and sustainability. The more I think about it, the more I want to move there.
Who knows? There are other places to consider – Sedona, Arizona; Portland, Oregon; Vancouver, Canada; Spain (where my friends Erika and Curtiss are planning to retire) or even Portugal. But at the moment, Delaware and Costa Rica are the two front runners.
So now it just becomes a matter of getting 58-year-old Nan to be wise enough with her money so that 65-year-old Nan (or maybe even a younger version, if I win the lottery!) can think about the next phase of her life with excitement and anticipation rather than dread and worry.