Helping in-laws move to California - what can they afford?

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optimizer
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Helping in-laws move to California - what can they afford?

Post by optimizer »

My wife and I live in the Bay Area and would love to move her parents from upstate NY to somewhere nearby (they would much prefer to live out west, but are concerned about costs). There's a retirement community in the area where appropriate condos sell for $600-900k with a $800-900/mo HOA fee (that includes probably $300+ of things they currently pay for). Here are the facts:

In-laws are 71 (M) and 81 (F).

In-laws income:
  • $42k lifetime annuity (not inflation indexed, withdrawn from pre-tax IRA, so taxable)
  • $50k social security
  • $20k additional income, likely to continue for 3-5 years
In-laws assets:
  • $1.15mm in an IRA
  • $100k in post-tax accounts
  • $125k in equity in current home *after* all selling costs (my estimate)
Current expenses:
  • $2k housing expenses, of which $400 is principal
  • $6k non-housing expenses
Future housing expenses:
  • $800k place in this community at 25% down, 3.5% interest
  • total outlay would likely be around $4500 (including HOA, insurance, property taxes), of which ~$950 is principal.
Questions:
  • Is this doable?
  • How much down payment help would they need to make it doable?
  • How much monthly payment help would they need to make it doable?

    My wife and I are lucky enough to be earning high, steady incomes annually, though have limited free cash. We can likely offer $100-150k of down payment assistance, and can backstop her parents' expenses considerably if need be.
SuzBanyan
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Re: Helping in-laws move to California - what can they afford?

Post by SuzBanyan »

optimizer wrote: Sun Jan 16, 2022 1:18 am My wife and I live in the Bay Area and would love to move her parents from upstate NY to somewhere nearby (they would much prefer to live out west, but are concerned about costs). There's a retirement community in the area where appropriate condos sell for $600-900k with a $800-900/mo HOA fee (that includes probably $300+ of things they currently pay for). Here are the facts:

In-laws are 71 (M) and 81 (F).

In-laws income:
  • $42k lifetime annuity (not inflation indexed, withdrawn from pre-tax IRA, so taxable)
  • $50k social security
  • $20k additional income, likely to continue for 3-5 years
In-laws assets:
  • $1.15mm in an IRA
  • $100k in post-tax accounts
  • $125k in equity in current home *after* all selling costs (my estimate)
Current expenses:
  • $2k housing expenses, of which $400 is principal
  • $6k non-housing expenses
Future housing expenses:
  • $800k place in this community at 25% down, 3.5% interest
  • total outlay would likely be around $4500 (including HOA, insurance, property taxes), of which ~$950 is principal.
Questions:
  • Is this doable?
  • How much down payment help would they need to make it doable?
  • How much monthly payment help would they need to make it doable?

    My wife and I are lucky enough to be earning high, steady incomes annually, though have limited free cash. We can likely offer $100-150k of down payment assistance, and can backstop her parents' expenses considerably if need be.
Bottom line, it looks like their monthly expenses would go up by $2500/month. This would make the monthly expenses in excess of the current income. However, it is not clear whether that income includes the RMDs from the IRA and it’s not clear why there is some income that will disappear in the next few years. If this allows your ILs to live near family in a suitable for aging home, the numbers seem likely to be something you can work out (unless I am double counting some asset).
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retired@50
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Re: Helping in-laws move to California - what can they afford?

Post by retired@50 »

The thing that sticks out to me is the size of the in-laws portfolio ($1,375,000) as it relates to the purchase price of the new home ($800,000). I don't know if this is a problem or not, but buying a house that is over 50% of your net worth when you're retired seems risky to me.

Regards,
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Re: Helping in-laws move to California - what can they afford?

Post by Jack FFR1846 »

Why would they buy? What do rentals go for? Upstate NY is very inexpensive. Very likely no strangling HOA to pay off every month. Bay area is ultra high expensive. With what they've got as savings, I'm going to say no unless they're both in their 90's.
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CletusCaddy
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Re: Helping in-laws move to California - what can they afford?

Post by CletusCaddy »

They can absolutely afford it.

They have $90k in guaranteed income. Their portfolio post down payment would be $1.1M, which can produce $40k in income for at least the next 30 years. That’s $130k in income.

Let’s say $20k goes to income taxes (this is almost certainly an overestimate)
$55k in housing, part of which is principal.
That leaves $5k per month for living expenses. For a couple in their 70s and 80s that is more than enough.
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quantAndHold
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Re: Helping in-laws move to California - what can they afford?

Post by quantAndHold »

Jack FFR1846 wrote: Sun Jan 16, 2022 2:01 pm Why would they buy? What do rentals go for? Upstate NY is very inexpensive. Very likely no strangling HOA to pay off every month. Bay area is ultra high expensive. With what they've got as savings, I'm going to say no unless they're both in their 90's.
I’m wondering the same thing. The advantage to buying in CA is the long term appreciation and protection from housing inflation. Since they’re already older, that’s less of an advantage for them. The other thing is that the market for condos in retirement communities is completely different than the normal housing market. Nearly every sale is a distress sale, because the units are typically sold by the children, who are in a hurry to get out from under the $900 HOA fees.

I think they can afford it, but my suggestion would be to see what it would cost to rent in this complex or someplace similar. I suspect in the long run, that would work out better for both them and you.
delamer
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Re: Helping in-laws move to California - what can they afford?

Post by delamer »

retired@50 wrote: Sun Jan 16, 2022 1:52 pm The thing that sticks out to me is the size of the in-laws portfolio ($1,375,000) as it relates to the purchase price of the new home ($800,000). I don't know if this is a problem or not, but buying a house that is over 50% of your net worth when you're retired seems risky to me.

Regards,
My initial reaction too. Could they even get a $600,000 mortgage on a $100,000 income?

But it isn’t clear how the $1.5 million in the IRA figures in. Presumably some of it is being withdrawn as RMDs already?

They need to do a deep dive into their expenses if they move. And also into the survivor’s income when the first spouse dies. The Social Security will take a significant hit, even if the annuity payment doesn’t. Some expenses will go down, of course.

But the IRA is key.
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JoeRetire
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Re: Helping in-laws move to California - what can they afford?

Post by JoeRetire »

optimizer wrote: Sun Jan 16, 2022 1:18 amcondos sell for $600-900k with a $800-900/mo HOA fee

Is this doable?
Assuming all of your estimates are accurate, Yes.
How much down payment help would they need to make it doable?
None.
How much monthly payment help would they need to make it doable?
None.

They would be cutting everything close. It could go awry if they have unexpected large expenses, such as long term care costs.
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gavinsiu
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Re: Helping in-laws move to California - what can they afford?

Post by gavinsiu »

Where is this retirement community.

My mom moved to the bay area about 9 years ago and settled in a retirement communtiy call Roosmoor in Walnut Creek. My sister purchased a 1000 sq ft co-op for about $159K (now worth about $384,639). This is a unheard of price in the bay area, but apparently co-ops are cheaper because they are not good investment properties. She current resides there paying $1K a month HOA fees (the place is paid off) which apparently includes the property tax.

You may want to look at this as an option. Walnut Creek is in the bay area.
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optimizer
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Re: Helping in-laws move to California - what can they afford?

Post by optimizer »

gavinsiu wrote: Sun Jan 16, 2022 8:47 pm Where is this retirement community.

My mom moved to the bay area about 9 years ago and settled in a retirement communtiy call Roosmoor in Walnut Creek. My sister purchased a 1000 sq ft co-op for about $159K (now worth about $384,639). This is a unheard of price in the bay area, but apparently co-ops are cheaper because they are not good investment properties. She current resides there paying $1K a month HOA fees (the place is paid off) which apparently includes the property tax.

You may want to look at this as an option. Walnut Creek is in the bay area.
You nailed it - that’s exactly the spot. How does she like living there???

Re: the pricing: there are definitely spots there that are ~$400k, but they need a place with 0 stairs, which cuts the inventory down by 80-90% and increases the price. They also currently live in a 1350 sq ft place and are slightly resistant to a place that’s materially smaller and want 2 beds and 1.5 baths min. Honestly though, some of the Rossmoor layouts will work fine for their needs with ~1000-1200 square feet. The truth is that there are spots there that are $550-650 that would probably fit their needs and I bet they will end up in a place that’s sub $750k, but I’m just trying to see how much the absolute ceiling should be.
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optimizer
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Re: Helping in-laws move to California - what can they afford?

Post by optimizer »

delamer wrote: Sun Jan 16, 2022 2:22 pm
retired@50 wrote: Sun Jan 16, 2022 1:52 pm The thing that sticks out to me is the size of the in-laws portfolio ($1,375,000) as it relates to the purchase price of the new home ($800,000). I don't know if this is a problem or not, but buying a house that is over 50% of your net worth when you're retired seems risky to me.

Regards,
My initial reaction too. Could they even get a $600,000 mortgage on a $100,000 income?

But it isn’t clear how the $1.5 million in the IRA figures in. Presumably some of it is being withdrawn as RMDs already?

They need to do a deep dive into their expenses if they move. And also into the survivor’s income when the first spouse dies. The Social Security will take a significant hit, even if the annuity payment doesn’t. Some expenses will go down, of course.

But the IRA is key.
Great points. No RMDs yet b/c the IRA is my father-in-law’s and he’s not yet 72. Re: what they can qualify for for a mortgage, I’m not 100% sure - the amount of the mortgage will depend on whether the bank would count the assets or future RMDs as income. We could also co-sign for them, which I think would cover any gap in their income. It’s also possible they could also get a loan against their IRA, which could make sense depending on the interest rate vs. a mortgage, but that’d be a stop gap (i.e., something like: get the largest loan they can, buy the new place for cash, immediately sell their old place, refi).

Also great point re: SS survivor benefits. We’ll have to model that out. Though I kinda think the decrease in expenses could outweigh the drop in benefits? Also this community has lots of smaller places, so it’d be easy to downsize in that scenario to a place that’d likely be $300-400k (today’s prices).
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optimizer
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Re: Helping in-laws move to California - what can they afford?

Post by optimizer »

Jack FFR1846 wrote: Sun Jan 16, 2022 2:01 pm Why would they buy? What do rentals go for? Upstate NY is very inexpensive. Very likely no strangling HOA to pay off every month. Bay area is ultra high expensive. With what they've got as savings, I'm going to say no unless they're both in their 90's.
Interesting point. Annoyingly, this community doesn’t have a lot of rentals, but it’s a great point. Their current HOA is $300 vs. the $1000 here (which would include $100 or so of things they currently pay for and another $600 of pretty valuable community stuff like gym, pools, etc.). Outside of housing, I’m not sure the day to day cost of living for a retired person in the Bay Area is *that* much higher than it is in the Hudson Valley (maybe technically they’re “downstate” but on the cusp and closer to Albany than NYC, but in an area that’s becoming increasingly populated by NYC transplants; they’re not in Buffalo)…
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optimizer
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Re: Helping in-laws move to California - what can they afford?

Post by optimizer »

JoeRetire wrote: Sun Jan 16, 2022 3:06 pm
optimizer wrote: Sun Jan 16, 2022 1:18 amcondos sell for $600-900k with a $800-900/mo HOA fee

Is this doable?
Assuming all of your estimates are accurate, Yes.
How much down payment help would they need to make it doable?
None.
How much monthly payment help would they need to make it doable?
None.

They would be cutting everything close. It could go awry if they have unexpected large expenses, such as long term care costs.
Makes sense. That was my take-away from some modeling, but this is a good gut check. I think this is the upper limit for what they’d end up buying.
rgs92
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Re: Helping in-laws move to California - what can they afford?

Post by rgs92 »

Would a lender give a large long-term mortgage to a borrower in that age range?

I know there are rules for qualification, but I think a lender can, in practice, simply turn down a loan just on a judgement call that they don't have to justify by saying something like it doesn't meet their internal guidelines, like insufficient income.

I mean, if they reject you, there is probably nothing you can do from a practical standpoint I would think.
Maybe a mortgage broker could help. I'm not sure.

I just bring this up because this possible obstacle should be considered in planning for such a major endeavor.

(I'm actually curious about this myself.)
Thank you.

Edit: They may have to just take a big chunk of money from their IRA and suffer the tax and Medicare IRMAA charges (but this would just be for a year).
Last edited by rgs92 on Sun Jan 16, 2022 9:42 pm, edited 1 time in total.
Topic Author
optimizer
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Re: Helping in-laws move to California - what can they afford?

Post by optimizer »

SuzBanyan wrote: Sun Jan 16, 2022 12:12 pm
optimizer wrote: Sun Jan 16, 2022 1:18 am My wife and I live in the Bay Area and would love to move her parents from upstate NY to somewhere nearby (they would much prefer to live out west, but are concerned about costs). There's a retirement community in the area where appropriate condos sell for $600-900k with a $800-900/mo HOA fee (that includes probably $300+ of things they currently pay for). Here are the facts:

In-laws are 71 (M) and 81 (F).

In-laws income:
  • $42k lifetime annuity (not inflation indexed, withdrawn from pre-tax IRA, so taxable)
  • $50k social security
  • $20k additional income, likely to continue for 3-5 years
In-laws assets:
  • $1.15mm in an IRA
  • $100k in post-tax accounts
  • $125k in equity in current home *after* all selling costs (my estimate)
Current expenses:
  • $2k housing expenses, of which $400 is principal
  • $6k non-housing expenses
Future housing expenses:
  • $800k place in this community at 25% down, 3.5% interest
  • total outlay would likely be around $4500 (including HOA, insurance, property taxes), of which ~$950 is principal.
Questions:
  • Is this doable?
  • How much down payment help would they need to make it doable?
  • How much monthly payment help would they need to make it doable?

    My wife and I are lucky enough to be earning high, steady incomes annually, though have limited free cash. We can likely offer $100-150k of down payment assistance, and can backstop her parents' expenses considerably if need be.
Bottom line, it looks like their monthly expenses would go up by $2500/month. This would make the monthly expenses in excess of the current income. However, it is not clear whether that income includes the RMDs from the IRA and it’s not clear why there is some income that will disappear in the next few years. If this allows your ILs to live near family in a suitable for aging home, the numbers seem likely to be something you can work out (unless I am double counting some asset).
Thanks! Yea the income is a part-time job that’ll likely roll off at some point (likely can be done remotely). The income doesn’t include RMDs.
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Re: Helping in-laws move to California - what can they afford?

Post by gavinsiu »

optimizer wrote: Sun Jan 16, 2022 9:18 pm You nailed it - that’s exactly the spot. How does she like living there???

Re: the pricing: there are definitely spots there that are ~$400k, but they need a place with 0 stairs, which cuts the inventory down by 80-90% and increases the price. They also currently live in a 1350 sq ft place and are slightly resistant to a place that’s materially smaller and want 2 beds and 1.5 baths min. Honestly though, some of the Rossmoor layouts will work fine for their needs with ~1000-1200 square feet. The truth is that there are spots there that are $550-650 that would probably fit their needs and I bet they will end up in a place that’s sub $750k, but I’m just trying to see how much the absolute ceiling should be.
I assume she likes it. She's sort of a complainer and complaint that we moved her out of a crime ridden neighborhood to a nice community that looks more like a college campus. However, when I call she's usually not home which means she has things to do.

The 0 stairs would be a problem. My mom's place has a flight of stairs. They should reconsidered the smaller place. Bay area cost of living is quite high as you already know. The other issue to consider is the hot market. A lot of places in Rossmoor in the last couple of year demand that you pay the entire place in cash upfront.
psychoslowmatic
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Re: Helping in-laws move to California - what can they afford?

Post by psychoslowmatic »

As someone in New England who’s getting snowed on tomorrow you could also point out that outside is always useable unlike in NY. Maybe they can get by with less space if they’re not trapped in it for 3 months.

I’d maybe have them rent for a bit to make sure they like the Bay Area and will handle the transition ok.
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Re: Helping in-laws move to California - what can they afford?

Post by Watty »

psychoslowmatic wrote: Sun Jan 16, 2022 10:46 pm I’d maybe have them rent for a bit to make sure they like the Bay Area and will handle the transition ok.
That is what I was going to post.
optimizer wrote: Sun Jan 16, 2022 1:18 am Is this doable?
For a reality check if they paid cash for the house then their Social Security and the annuity would more than cover their expenses and they would have around $700K left over. At some point could get a reverse mortgage if they needed to tap their home equity.

The details of how to do it get complicated and tricky but it is doable.

There are endless threads about if you should pay cash for a house or get a mortgage but if they paid it all off at once then they would have to make a large IRA withdraw and pay high taxes so getting some sort of mortgage likely makes sense. In addition to a 30 year mortgage they could also consider getting a mortgage then paying it off over something like 5 to 7 years if that could keep them from being in too high a tax bracket.

There are lots of ways to pay for the house and what is the best way is not clear to me but it should be doable.
optimizer wrote: Sun Jan 16, 2022 1:18 am $42k lifetime annuity (not inflation indexed, withdrawn from pre-tax IRA, so taxable)
....
Future housing expenses:
$800k place in this community at 25% down, 3.5% interest
total outlay would likely be around $4500 (including HOA, insurance, property taxes), of which ~$950 is principal.
That $42K annuity is $3,500 a month before taxes.

After taxes I would think that the annuity would still be more than enough to pay the mortgage itself and some of the other house related expenses. They would then only need to budget for the rest of the including HOA, insurance, and property taxes that the annuity does not cover.

Their other $70K in income would just about cover their other non-housing costs.

If the income from the annuity is dedicated to paying off a fixed rate mortgage then that would take away the inflation risk which could devalue the annuity.

The 4% safe withdraw rate that you hear so much about is for a 65 year old who is planning on a 30 year retirement. At their age their safe withdraw rate would be higher than 4% so they will be able to spend a lot each year from their IRA.

Be sure to crunch their numbers three ways, as a couple and as if either of them survives the other. If one of them dies then they will only get one Social Security check and the survivor will be in the higher single tax brackets.
Last edited by Watty on Sun Jan 16, 2022 11:35 pm, edited 2 times in total.
moneyflowin
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Re: Helping in-laws move to California - what can they afford?

Post by moneyflowin »

Have you considered senior (55+) mobile home parks?

Some people have a prejudice when they hear "mobile home park", but I've seen some really nice 55+ ones in the Bay Area. They are well kept, no riff raft. And some of the mobile homes themselves are nicer than a (lower end) house. The space rent costs the same or less than your condo's property tax + HOA.

Because of the age requirement, there's less demand so they're less expensive than a comparable mobile home with no age restriction.

You won't get much appreciation, but who needs it when you can buy the mobile home for $250k cash and use the remainder to invest. There's your appreciation.
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Re: Helping in-laws move to California - what can they afford?

Post by celia »

optimizer wrote: Sun Jan 16, 2022 1:18 am * $42k lifetime annuity (not inflation indexed, withdrawn from pre-tax IRA, so taxable)
. . .

* $1.15mm in an IRA
Is the $42k annuity being taken from the $1.15mm IRA? If so, many people here are counting it as both income and still available to withdraw from, as needed. How much of this IRA is NOT part of the annuity?

When one of them dies, how will that impact their income? Of course, one of the SS will disappear. Will part of the $42k annual annuity also disappear?

I also noted that you said you looked into a “retirement community”, but most people here are only talking about the condo expenses. If they stay in the community as their health declines, I would think the fees would increase accordingly.
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Re: Helping in-laws move to California - what can they afford?

Post by phxjcc »

I do not understand the problem.

$112,000 current income
Add 4% from IRA, $44,000

That gets you to $156,000.


So if the Condo is $800,000 that is 4,000/ month P+I; with 90% being interest.
With T+I, add 1000/month.
So now you are at 5,000.
With your quoted non housing expenses of 6,000 that gives you 11,000.
They are getting 13,000.

“But that is pre tax”,…the breathless doomsayers scream.

They are getting 13,000/ month income and probably writing off at least 50,000/ year due to property tax and mortgage interest….AND SS income is not taxed in CA…and the pensions may not be either. Plus insurance premiums and healthcare costs…their tax burden will be very low (try it out in TurboTax, et al)

soooooo, most of that $13,000 is untaxed.

they have a $2000 cushion and $1,000,000 i+ in the bank.

What is the issue.?.,,

…and quite frankly…and not to be morbid…but their life expectancy (mean) is 14 more years.

What are you waiting for/what are they saving for?
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Re: Helping in-laws move to California - what can they afford?

Post by lasp506 »

optimizer wrote: Sun Jan 16, 2022 1:18 am

In-laws are 71 (M) and 81 (F).


In-laws assets:
  • $1.15mm in an IRA
  • $100k in post-tax accounts
  • $125k in equity in current home *after* all selling costs (my estimate)

Future housing expenses:
  • $800k place in this community at 25% down, 3.5% interest
  • total outlay would likely be around $4500 (including HOA, insurance, property taxes), of which ~$950 is principal.
Questions:
  • Is this doable?
  • How much down payment help would they need to make it doable?
  • How much monthly payment help would they need to make it doable?

    My wife and I are lucky enough to be earning high, steady incomes annually, though have limited free cash. We can likely offer $100-150k of down payment assistance, and can backstop her parents' expenses considerably if need be.
1/ I would be uncomfortable tying up 800k out of 1.3m (plus ss and annuity) assets at this age. Can they rent instead?

2/ Alternatively, and this is what I would do if I were in your shoes, they could buy the place with the understanding that you will inherit the condo AND you will help them financially if they are short of cash along the way.
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optimizer
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Re: Helping in-laws move to California - what can they afford?

Post by optimizer »

Watty wrote: Sun Jan 16, 2022 11:30 pm Be sure to crunch their numbers three ways, as a couple and as if either of them survives the other. If one of them dies then they will only get one Social Security check and the survivor will be in the higher single tax brackets.
Yes, great point (and thanks for your whole post), will do. Figuring out the mortgage piece is also key now. As you mention, the goal is to keep from having to bump them up into a high tax bracket for one year. Also I agree with you about the nice alignment between a fixed rate mortgage payment and a fixed annuity. One of the reasons I think they should buy vs. rent, assuming, of course, that they're certain about the move.
phxjcc wrote: Mon Jan 17, 2022 1:23 am They are getting 13,000/ month income and probably writing off at least 50,000/ year due to property tax and mortgage interest….AND SS income is not taxed in CA…and the pensions may not be either. Plus insurance premiums and healthcare costs…their tax burden will be very low (try it out in TurboTax, et al)
Good thoughts, so I ended up running the AARP 1040 calculator (and CA's online calculator/tax tables) and indeed the tax burden is quite low. Probably like 12-13% state+federal. Unfortunately pensions/annuities are taxed in CA, but CA has more progressive tax brackets than NY, so the state taxes don't really change.
celia wrote: Mon Jan 17, 2022 1:17 am Is the $42k annuity being taken from the $1.15mm IRA? If so, many people here are counting it as both income and still available to withdraw from, as needed. How much of this IRA is NOT part of the annuity?

When one of them dies, how will that impact their income? Of course, one of the SS will disappear. Will part of the $42k annual annuity also disappear?

I also noted that you said you looked into a “retirement community”, but most people here are only talking about the condo expenses. If they stay in the community as their health declines, I would think the fees would increase accordingly.
The annuity is separate and I'm looking into the survivor benefit. Should be at least 50%. And yes, conceivably their expenses could go up in the future, but from everything I've read expenses on average go down as people age.
moneyflowin wrote: Sun Jan 16, 2022 11:31 pm Have you considered senior (55+) mobile home parks?
I love this idea and I will actually look into it, but I think it's unlikely unless you're willing to try to convince my mother-in-law to live in a mobile home park, no matter how practical it might be.
psychoslowmatic wrote: Sun Jan 16, 2022 10:46 pm As someone in New England who’s getting snowed on tomorrow you could also point out that outside is always useable unlike in NY. Maybe they can get by with less space if they’re not trapped in it for 3 months.

I’d maybe have them rent for a bit to make sure they like the Bay Area and will handle the transition ok.
This is a real selling point. They check our weather every day. Plus the community has so many activities available that there's always an opportunity to do something outside the house. Also we have a backyard studio/ADU, so they typically spend ~6+ weeks in the area per year with us and have for several years now.
rgs92 wrote: Sun Jan 16, 2022 9:38 pm Maybe a mortgage broker could help. I'm not sure.

I just bring this up because this possible obstacle should be considered in planning for such a major endeavor.

(I'm actually curious about this myself.)
I'm looking into it and will post what I find. They can't discriminate based on age/source of income so the question is whether they'll consider IRA distributions "income."
gavinsiu wrote: Sun Jan 16, 2022 10:03 pm However, when I call she's usually not home which means she has things to do.
Awesome

lasp506 wrote: Mon Jan 17, 2022 7:22 am …and quite frankly…and not to be morbid…but their life expectancy (mean) is 14 more years.

What are you waiting for/what are they saving for?
Yes exactly. I am quite comfortable, especially because I know we can help out if ever need be, but they don't want to feel like their moving here requires financial assistance from us.
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Re: Helping in-laws move to California - what can they afford?

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optimizer wrote: Mon Jan 17, 2022 7:17 pm
psychoslowmatic wrote: Sun Jan 16, 2022 10:46 pm As someone in New England who’s getting snowed on tomorrow you could also point out that outside is always useable unlike in NY. Maybe they can get by with less space if they’re not trapped in it for 3 months.

I’d maybe have them rent for a bit to make sure they like the Bay Area and will handle the transition ok.
This is a real selling point. They check our weather every day. Plus the community has so many activities available that there's always an opportunity to do something outside the house. Also we have a backyard studio/ADU, so they typically spend ~6+ weeks in the area per year with us and have for several years now.
This point is really worth hammering home. In a retirement community, they will be out doing stuff in the community as much as they’re home. They eat their meals in the dining room, don’t really use the kitchen, their activities are out of the apartment, and they’ll generally socialize in the common areas, not in each other’s homes. They really don’t need as much space as they did, especially in a place where the weather is good. They also don’t need a lot of storage space, because since everything is handled for them, so they don’t need as much stuff as they did before.
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Re: Helping in-laws move to California - what can they afford?

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quantAndHold wrote: Mon Jan 17, 2022 7:24 pm In a retirement community, they will be out doing stuff in the community as much as they’re home. They eat their meals in the dining room, don’t really use the kitchen ...
FYI, I don't believe that Rossmoor necessarily means that kind of "retirement community (i.e., CCRC or similar).
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Re: Helping in-laws move to California - what can they afford?

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By the way, thanks everyone for your replies!
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Re: Helping in-laws move to California - what can they afford?

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increment wrote: Mon Jan 17, 2022 8:22 pm
quantAndHold wrote: Mon Jan 17, 2022 7:24 pm In a retirement community, they will be out doing stuff in the community as much as they’re home. They eat their meals in the dining room, don’t really use the kitchen ...
FYI, I don't believe that Rossmoor necessarily means that kind of "retirement community (i.e., CCRC or similar).
So it’s just a normal neighborhood, except there are no young people?

They should just rent an apartment somewhere then. If one of them is 81 now and they both already have mobility issues, they probably aren’t going to want to stay in that place long enough to make owning worth it.
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Re: Helping in-laws move to California - what can they afford?

Post by SuzBanyan »

quantAndHold wrote: Tue Jan 18, 2022 1:22 am
increment wrote: Mon Jan 17, 2022 8:22 pm
quantAndHold wrote: Mon Jan 17, 2022 7:24 pm In a retirement community, they will be out doing stuff in the community as much as they’re home. They eat their meals in the dining room, don’t really use the kitchen ...
FYI, I don't believe that Rossmoor necessarily means that kind of "retirement community (i.e., CCRC or similar).
So it’s just a normal neighborhood, except there are no young people?

They should just rent an apartment somewhere then. If one of them is 81 now and they both already have mobility issues, they probably aren’t going to want to stay in that place long enough to make owning worth it.
I think the suitability of Rossmoor depends mostly on how close the OP and his wife are to that location. I know my brothers have encouraged my 92 YO widowed Dad to move there because it would be closer to them in Oakland and Berkeley than his current single family home in Hayward.
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Re: Helping in-laws move to California - what can they afford?

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Is there a less expensive option for them than California?

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Re: Helping in-laws move to California - what can they afford?

Post by goodenyou »

I would rent. As someone from Upstate NY in a previous life, California will create sticker shock for real estate costs for someone from Upstate NY. Maybe not shock of taxes, but definitely cost of housing.
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Re: Helping in-laws move to California - what can they afford?

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Sandtrap wrote: Tue Jan 18, 2022 9:50 am Is there a less expensive option for them than California?

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Not that would be near their family in the Bay Area.

Renting would clearly be cheaper. A quick Zillow search found a couple dozen accessible 2+ bedroom places in Walnut Creek for $3k or less.
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Re: Helping in-laws move to California - what can they afford?

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I always thought that it was wise to rent before buying in new area. I’m sure that the attraction is family more than the weather or state.
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Re: Helping in-laws move to California - what can they afford?

Post by JackBoglereader21 »

Spouse and I am nearing 50 and have personal experience moving parents (both sets) which involved cleaning/selling homes, buying/renting new homes. We have also had cousins and close friends go through same with their aging parents. Moving from SoCal to New Hampshire. Moving to Maryland to Hawaii. Moving from Ohio to Florida. Based on information shared of assets/cash flow, I would recommend you look for a rental. Keep in mind any location with strict rent control (aka San Francisco), age discrimination is very real. Landlords don't want older "protected" tenants - just one of the ripple effects of rent control, not making an argument for or against.

We had to move my aging mother near us. She has more than enough liquidity to buy a small sized single story home in San Francisco but we didn't want her to be stuck with a house, neighborhood, neighbors she didn't like. We showed all financial statements to the landlord so he knew she could easily be a buyer but was wanting to be a renter first (she was 75). In the end she loved the rental house, loved the neighborhood, neighbors. She stayed a renter and passed away several years later. Yes her estate would have realized a gain if she bought but being a renter had a lot of advantages. When we factor in maintenance, insurance, property tax, it was probably a wash. Fixed monthly expense under rent control was a good decision for us.

A family friend is currently going through this ... moved parents from Mid West to Portland to be closer to his sister. Bought a house last year. Dad had a stroke, now needs 24/7 care, house needs updating which they planned to do. Mom is not happy to be saddled with house, would have wanted to get Dad into assisted living and herself into studio.
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Re: Helping in-laws move to California - what can they afford?

Post by calwatch »

The OP stated that the in laws visit the Bay Area regularly and spend multiple weeks there. Assuming they have hit all seasons, I don't think it's necessary to rent for a year or two if they know what they want. The one issue is that the public transit in this area is poor. If they are fine with paying for car services when they can no longer drive, that may be acceptable.
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Re: Helping in-laws move to California - what can they afford?

Post by optimizer »

Rossmoor has assisted living (which is different) and it has normal condos. All are 55+. The advantage is that the $800-1000 HOA fee includes access to their gym, dozens/hundreds of clubs (pottery, poetry, etc.), internet and cable, a number of utilities, and various other activities. It’s a gated community and has its own free shuttle transportation to BART, shopping centers, and medical centers for dr. appts, if one doesn’t want to drive. There’s a super cheap subscription maintenance service that not only fixes things in the unit, but also hangs up shelves and does other random small things for which you’d otherwise you’d have to hire a TaskRabbit or call, well, me. In short, there are a lot of specific advantage of this community over just any condo/rental in the general area. Unfortunately there aren’t really any rentals in the area, so it’s hard to try it out. At the high end we’re talking about $4600 or so in monthly outlay, of which $1000 is principal. That includes the HOA fees that get you access to all those community benefits.

And yes, the draw here is to be close to us (beautiful 25 min drive door to door).
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Re: Helping in-laws move to California - what can they afford?

Post by optimizer »

JackBoglereader21 wrote: Tue Jan 18, 2022 11:19 am Spouse and I am nearing 50 and have personal experience moving parents (both sets) which involved cleaning/selling homes, buying/renting new homes. We have also had cousins and close friends go through same with their aging parents. Moving from SoCal to New Hampshire. Moving to Maryland to Hawaii. Moving from Ohio to Florida. Based on information shared of assets/cash flow, I would recommend you look for a rental. Keep in mind any location with strict rent control (aka San Francisco), age discrimination is very real. Landlords don't want older "protected" tenants - just one of the ripple effects of rent control, not making an argument for or against.

We had to move my aging mother near us. She has more than enough liquidity to buy a small sized single story home in San Francisco but we didn't want her to be stuck with a house, neighborhood, neighbors she didn't like. We showed all financial statements to the landlord so he knew she could easily be a buyer but was wanting to be a renter first (she was 75). In the end she loved the rental house, loved the neighborhood, neighbors. She stayed a renter and passed away several years later. Yes her estate would have realized a gain if she bought but being a renter had a lot of advantages. When we factor in maintenance, insurance, property tax, it was probably a wash. Fixed monthly expense under rent control was a good decision for us.

A family friend is currently going through this ... moved parents from Mid West to Portland to be closer to his sister. Bought a house last year. Dad had a stroke, now needs 24/7 care, house needs updating which they planned to do. Mom is not happy to be saddled with house, would have wanted to get Dad into assisted living and herself into studio.
Fair enough - issue is that rent control isn’t applicable to all units (e.g., the nice single family homes that are well maintained) while rental stock owned by professional landlords is almost always several clicks below condos in quality. In this community if one of them needs assisted living, it’s actually kind of easy to move them into the assisted living facility in the same community, sell their 2-bedroom place, and move the other person into a 1-bedroom unit in the community (or move both of them into the assisted living building). We’d have to cover the realtor fees, but could get a deal if we use the same agent for selling and buying in the community and frankly either way we could cover that expense.
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