# Should aging retirees sell house and buy condo or simply rent?



## piano mom (Jan 18, 2012)

My mother in law was diagnosed with cancer but is now in remission. Her hubby is approaching 80. They want to sell their house and buy a luxurious condo with half of the sale proceeds. I think they should just rent instead and avoid property tax, maintenance etc, considering this fancy condo has a lot of amenities that could be costly to fix. I think they should invest in dividend etfs and enjoy a free lifestyle. What are your thoughts?


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## andrewf (Mar 1, 2010)

They could also get an annuity, which would have a very juicy yield with one spouse at 80 and the other with a history of cancer.


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## marina628 (Dec 14, 2010)

Condo living probably will be good for them or they can buy in a retirement community where everything is done for them.If it were me at that age I would rent a condo though.


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## Four Pillars (Apr 5, 2009)

She had cancer, he's 80, it's their money. I would just let them do what they want.


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## MoneyGal (Apr 24, 2009)

andrewf said:


> They could also get an annuity, which would have a very juicy yield with one spouse at 80 *and the other with a history of cancer.*


This is only relevant if they get what's called an impaired life annuity - a "regular" annuity is indifferent to the annuitant's health status.


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## piano mom (Jan 18, 2012)

Four Pillars said:


> She had cancer, he's 80, it's their money. I would just let them do what they want.


That's probably what we'll end up doing - can't help but try to protect them as they don't have a lot in savings.


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## GoldStone (Mar 6, 2011)

Four Pillars said:


> She had cancer, he's 80, it's their money. I would just let them do what they want.


+1



piano mom said:


> That's probably what we'll end up doing - can't help but try to protect them as they don't have a lot in savings.


If half of the house proceeds pays for a luxurious condo, they are in good shape for their age.


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## financialnoob (Feb 26, 2011)

I'd say rent but I don't think they're wrong with either option. Perhaps a retirement condo would be better if there's one near them, which offers amenities and health services close by.


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## Daniel A. (Mar 20, 2011)

Maybe ask a lawyer what options are best from an estate point of view.
Make sure they update their wills.


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## Eclectic12 (Oct 20, 2010)

Daniel A. said:


> Maybe ask a lawyer what options are best from an estate point of view.
> Make sure they update their wills.


Good point.

I'd think a condo as a primary residence would have no tax implications but may be more difficult to access the value. 

If part of the house sale proceeds is invested in a dividend ETF, the dividend part will be grossed up (i.e. $5K dividends will be reported as something like $7K) and added net income, which will increase. Is this going to trigger or increase a clawback? If so, can this be offset somehow by actions such as charitable donations etc.?


Cheers


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## AltaRed (Jun 8, 2009)

financialnoob said:


> I'd say rent but I don't think they're wrong with either option. Perhaps a retirement condo would be better if there's one near them, which offers amenities and health services close by.


The best option from my perspective. 55+ independent facilities generally offer additional services, perhaps an evening meal each day to help reduce cooking duties, 24/7 life monitoring support, staff nurse, perhaps even housekeeping. All of these things have merit as people age. My mother is now in one of these kind of buildings.


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## aldur1 (Aug 17, 2011)

There's timely article posted on million dollar journey that talks about downsizing that you may be interested in.

http://www.milliondollarjourney.com/the-joys-and-pitfalls-of-downsizing-your-home.htm


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## piano mom (Jan 18, 2012)

They have just informed us that the house is now listed for sale and they will be putting an offer on the desired condo. I think they just want to keep it simple.

Thanks for all your responses, as usual


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