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Trusted Contributor
Posts: 1,403
Registered: ‎03-10-2010

Finances and retirement

Dh and I are both retired. Him 3 years and for me 2 years now. We want to have our kitchen remodeled and our roof repaired which does not leak but needs cosmetic repairs. Each cost a substantial amount. We were lucky in that we have pensions and health care. We have a moderate savings account along with our monthly allotments and we also have some investments. Here's my dilemma. Dh feels we should put something down and finance the rest. This would mean making payments and taking money away from our monthly living expense or using money from our savings. I thought when we retired we'd take the money from our investments,TAKE THE HIT ON TAXES and pay cash, which he does not want to do. I don't know what to do. I didn't mind having monthly payments when we were working but I really don't want them now. On the other hand, I know we may need the investment money down the road. I know there are retirees who remodel their homes. Which is the best way to do it?

 

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Honored Contributor
Posts: 37,281
Registered: ‎03-10-2010

Re: Finances and retirement

Perhaps you need to enlist the services of a financial advisor, in case you don't already have one. 

New Mexico☀️Land Of Enchantment
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Posts: 2,146
Registered: ‎05-09-2016

Re: Finances and retirement

The best thing to do is to talk to your financial advisor about how to handle this. 

~The more someone needs to brag about how wonderful, special, successful, wealthy or important they are, the greater the likelihood that it isn't true. ~

Respected Contributor
Posts: 3,489
Registered: ‎10-27-2010

Re: Finances and retirement

 There are too many variables for anyone to be able to give you a good answer. You need to sit down with your accountant, attorney, or financial advisor – but not a financial advisor who is in the business to sell you something! – to go over your situation in detail and make that recommendation. There's no single answer.  We were fortunate with our careers and investments and saved consistently from age 30, so we've paid cash for everything for a very long time. Personally,  I would pay cash, tailoring my plans to suit the amount of cash I wanted to spend! But that's me. Your situation may be different. 

Respected Contributor
Posts: 2,639
Registered: ‎03-13-2010

Re: Finances and retirement

[ Edited ]

I retired seven years ago and wanted to remodel our bathroom and kitchen.  I had enough money in my personal savings to pay for the bathroom remodel.  Four years ago, we decided to remodel our kitchen, add a laundry room to the first floor and replace our deck.  I wanted to pay cash.  Husband said no way.  Financial adviser agreed with my husband so we took out a home equity loan.  Our home was paid off about 12 years before I retired and not having that payment was wonderful.  We both have SS and pensions as well as savings from both our 401k's and some investments.   The taxes would have killed us if we had paid cash from our savings and it would take a long time to make up the hit to our savings.   Anyway, that's what worked for us. 

Honored Contributor
Posts: 10,537
Registered: ‎10-25-2010

Re: Finances and retirement

[ Edited ]

Our financial advisor has advised us to finance and not take money from our retirement savings.  He suggests that a home equity loan is the best way and we could use the interest to write off on our taxes.

 

Every time we do a sit down with him, he bugs us to borrow from a home equity account, even though we don't have a need to borrow for. He says we are paying too much for taxes.

 

Your case might be different, but you will get a big hit on taxes if you take out a substantial amount out of your savings and you have no way to make it up again.  You might have a long time to live and you don't want your money to run out.

 

At least with a loan, you know you will pay it back.

Trusted Contributor
Posts: 1,173
Registered: ‎08-05-2011

Re: Finances and retirement


@starpolisher wrote:

Dh and I are both retired. Him 3 years and for me 2 years now. We want to have our kitchen remodeled and our roof repaired which does not leak but needs cosmetic repairs. Each cost a substantial amount. We were lucky in that we have pensions and health care. We have a moderate savings account along with our monthly allotments and we also have some investments. Here's my dilemma. Dh feels we should put something down and finance the rest. This would mean making payments and taking money away from our monthly living expense or using money from our savings. I thought when we retired we'd take the money from our investments,TAKE THE HIT ON TAXES and pay cash, which he does not want to do. I don't know what to do. I didn't mind having monthly payments when we were working but I really don't want them now. On the other hand, I know we may need the investment money down the road. I know there are retirees who remodel their homes. Which is the best way to do it?

 


You have to be careful with financial advisors. Shop VERY carefully for one. They are not all created equal or trust worthy.

There is a saying that no one cares about your money as much as you do. We learned that the hard way years ago.

I personally would wait on the cosmetic stuff. I know you want to do it but waiting won't cost you anything and money you spend is money gone no matter how you figure it.

My husband has always had savings accounts for various expenses he sees coming down the road. As soon as we bought our Prius, cash, in 2010, he began saving again for our next car 10 years down the road so we could pay cash again or only take out a very small loan.

Any money you take from investments is money no longer working for you.

Good luck. Hope you find someone really trust worthy to talk to about this.

Honored Contributor
Posts: 8,121
Registered: ‎03-09-2010

Re: Finances and retirement

Think this all depends where you live and what the housing market is like there at this time, and where it's going in the future. 

 

I'd say take a home equity loan to finance this, if you know your home is going to soar in value over the next few years. 

Honored Contributor
Posts: 26,959
Registered: ‎03-12-2010

Re: Finances and retirement

The people who said you should talk to a financial planner, I think, are right.

 

That was one of the first things I did when my husband died.  My daughter handles everything between the financial planner and the accountants, etc.

 

You need to have someone help you decide if it's possible for you to make payments, etc.  It sounds like you will eventually need to repair things in your house but someone can show you what to do now, how to save for later and so on.

 

It is worth any money it costs.  Often banks have financial planners and they don't charge anything if you have your money with them.

 

Look into all firms and decide what's best for your family.  My advice is to also include whomever you trust (be it son, daughter someone who will be the executor) include them so they know.

 

When my husband died my daughter was the executor and now she's on all of my accounts so when something happens to me she can have an easier time with all of it.

Honored Contributor
Posts: 11,373
Registered: ‎03-09-2010

Re: Finances and retirement

This might be a little simplistic, but if your investments have a better interest rate than the finance charges, then I'd finance and let my investments keep earning interest.