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65 year old divorce new house price guidance
Posted on 3/24/17 at 10:15 am
Posted on 3/24/17 at 10:15 am
I have a 65 year old family member going through a divorce, she will net about $2 mil total. That's a fairly hard figure as it was a 2nd marriage for both and they have kept their finances pretty separate.
She is in great health and also works for about $20k/ year. I'm projecting $75-90k income for her total including investments, SS, etc. Seem accurate?
She wants to buy a house immediately, I'm recommending she rent for a year to let everything settle but she has a ton of stuff the old house was 7,000 sq ft.
What price range seems smart and what seems absurd for her? I'm her only family really so she is coming to me for some guidance but I want her to make the decisions. She is looking at a $650k house, but I was hoping she was looking more toward $450k for example.
She is in great health and also works for about $20k/ year. I'm projecting $75-90k income for her total including investments, SS, etc. Seem accurate?
She wants to buy a house immediately, I'm recommending she rent for a year to let everything settle but she has a ton of stuff the old house was 7,000 sq ft.
What price range seems smart and what seems absurd for her? I'm her only family really so she is coming to me for some guidance but I want her to make the decisions. She is looking at a $650k house, but I was hoping she was looking more toward $450k for example.
2
Posted on 3/24/17 at 10:47 am to baldona
Depends on her spending lifestyle, I suppose. Is she frugal and able to put something like 35-40k of her total income toward a house, or is she more the type to minimum payment it out for the full length? 450k definitely sounds more reasonable to me, as well.
If I was her age I'd get a small, nice house so that upkeep was low and put that money I saved toward travel/experiences. Everyone is different, though. Lots of old people are homebodies and might prefer more house.
If I was her age I'd get a small, nice house so that upkeep was low and put that money I saved toward travel/experiences. Everyone is different, though. Lots of old people are homebodies and might prefer more house.
Posted on 3/24/17 at 10:53 am to Decisions
She is looking to most likely pay cash for the house. I was trying to make the OP as short as possible, but forgot that.
My issue is that she wants to live in a fairly expensive area and she does little to no maintenance herself, hasn't for the last 10-15 years. Even with her husband, they would hire people to do odd jobs like hang pictures and set up their speakers in their living room.
What I worry about is her expenses on a house as an old single woman: landscaping, maintenance, etc. plus utilities and taxes being higher. Without being that age and single, I just don't know how far $1.5 million invested will get you. I really am trying to get her to not dip into her principle every year as she is only 65 and in good health, she could easily live 20 years.
My issue is that she wants to live in a fairly expensive area and she does little to no maintenance herself, hasn't for the last 10-15 years. Even with her husband, they would hire people to do odd jobs like hang pictures and set up their speakers in their living room.
What I worry about is her expenses on a house as an old single woman: landscaping, maintenance, etc. plus utilities and taxes being higher. Without being that age and single, I just don't know how far $1.5 million invested will get you. I really am trying to get her to not dip into her principle every year as she is only 65 and in good health, she could easily live 20 years.
Posted on 3/24/17 at 11:02 am to baldona
6% on $1.5M is $90k
Without a house payment that seems doable for someone that doesn't pinch pennies.
$500k house that's brand new or not needing major maint. Would be my suggestion.
Without a house payment that seems doable for someone that doesn't pinch pennies.
$500k house that's brand new or not needing major maint. Would be my suggestion.
Posted on 3/24/17 at 11:08 am to baldona
If she's walking away with $2M from the divorce, then I don't think $650k budget on a house is out of line. She'll pay cash, still have $1.3M in the bank and decent income from investments still coming in.
The thing I'd be more worried about is that she's going to be a 65 year old single lady. Does she really NEED a huge house to live in by herself? The older she gets, the more difficult it becomes to maintain a big house. So unless she needs the space because of family visiting frequently and staying with her, I'd recommend encouraging her to downsize a bit on square footage.
The thing I'd be more worried about is that she's going to be a 65 year old single lady. Does she really NEED a huge house to live in by herself? The older she gets, the more difficult it becomes to maintain a big house. So unless she needs the space because of family visiting frequently and staying with her, I'd recommend encouraging her to downsize a bit on square footage.
Posted on 3/24/17 at 11:19 am to Tiger Prawn
She invests pretty conservatively so I was going with 4% a year post tax.
She doesn't "need" anything, she is old money and her house in the past 20 years was 7,000 sq ft. So she wants something nice and larger to hold all her antique crap.
That's basically where my dilemma is, is what is the max she can afford. She is much more the type to go big, then to live conservatively at least with a house. Its hard to say what her lifestyle will be after the divorce, he made pretty good money until he lost his job but he was not social at all while she is tremendously. So I think her social life will grow immensely the next year.
I mostly worry because she is the type that pays someone else to do everything, old money style. She cooks, cleans, etc. for herself but I'm talking house upkeep, auto, etc. For a 70 year old I worry that adds up more than she thinks without a man around. I'm not local to her.
She doesn't "need" anything, she is old money and her house in the past 20 years was 7,000 sq ft. So she wants something nice and larger to hold all her antique crap.
That's basically where my dilemma is, is what is the max she can afford. She is much more the type to go big, then to live conservatively at least with a house. Its hard to say what her lifestyle will be after the divorce, he made pretty good money until he lost his job but he was not social at all while she is tremendously. So I think her social life will grow immensely the next year.
I mostly worry because she is the type that pays someone else to do everything, old money style. She cooks, cleans, etc. for herself but I'm talking house upkeep, auto, etc. For a 70 year old I worry that adds up more than she thinks without a man around. I'm not local to her.
Posted on 3/24/17 at 11:41 am to baldona
Got it. Then as the others have said I'd get a brand new house so that maintenance is basically nonexistent those first several years. I don't know what her housing market is like, but I'd wager that she could get a quite nice 3-4k sqft in a half-million dollar price range. Depending on location.
4% return on 1.5 would be 60k, plus her income is 80k. That's plenty enough for someone with no other expenses to live quite well off of, even if she has to hire a handyman every once in a while. She should establish a budget, at least for this first year, until she adjusts to her new financial situation.
4% return on 1.5 would be 60k, plus her income is 80k. That's plenty enough for someone with no other expenses to live quite well off of, even if she has to hire a handyman every once in a while. She should establish a budget, at least for this first year, until she adjusts to her new financial situation.
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