Making Hay from the Nest Financing Your Retirement Home Is Not Always Easy, but There Are Creative Options By Jimmy Magahern
When Randy Johnson and his wife, Lisa, found themselves as empty nesters last year, they did what many 50-something couples do, they downsized from this beautiful 25,000-squarefoot home in Paradise Valley to an 8,000-square-foot house in North Scottsdale.
ast summer, following the departure of their oldest children to college, Randy and Lisa Johnson did what a lot of empty nesters do: They decided to downsize into a smaller house. Granted, for the 50-year-old newly inducted Baseball Hall of Famer and his wife, that meant merely moving out of their sevenbedroom, 12-bath, 25,000-squarefoot mansion at the foot of Paradise Valley’s Mummy Mountain (listing price: $25 million) and into an 8,000-square-foot, $3.9 million house in North Scottsdale. Still, downsizing from a 5-acre home—with annual property taxes assessed at more than $62,000 and an energy bill likely rivaling that of a major shopping mall—was undoubtedly a good idea for the Johnson family and a good example for any over-50 couple who are starting to think about a retirement home. While it may be tempting to imagine living out your retired years in a palace befitting induction into your own hall of fame, you’ll have more
money left to enjoy those years if you think smaller instead of bigger. “Downsizing is the first thing every senior should think about when they’re looking to reduce their housing costs—everything else flows from that,” says Leo Pruett, a senior counsel attorney at the Frutkin Law Firm specializing in business law and estate planning. “And it’s not just seniors. People in their 40s may find that’s a proper time for them to start downsizing. Once the kids are off to college and have flown the nest, that’s about the time to start making those plans.” Of course, Pruett acknowledges, sometimes it can be hard for older adults to tackle such a major life change. “Inertia’s a big factor,” he says. “People get into a house, they invest their blood, sweat, tears and money into it, they raise their family there, and they’ve got their emotional ties. They’re comfortable there, and it’s very tough to overcome that to downsize. But what they need to ...continues on page 26
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page 24 : : Lovin’ Life After 50 : : February 2015