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Retirement Discussions / Retire Well on Less


Subject:  Howdy Date:  5/26/2004  11:42 PM
Author:  dozer183e Number:  594 of 1845

I've posted this on other boards; but I just found this board and wanted to hear what you had to say:::

I'm selling my home in an expensive area and moving to buy a home in a much less expensive area.

I am 35, married with 4 young kids. Currently, DW and I have about $30,000 each in 401(k)s and IRAs. We have about $25,000 in an e-fund.

I'll have about $280,000 net profit after the sale of my home. We'll be buying a new home for $211,000. My thought was to put 20% down on that home and take a mortgage on the rest. We'll invest the remaining money (approx $240,000) in various ways and for various reasons including: Kids College, Real estate investments, max out IRAs annually, maybe contribute more to 401(k), keep some in money market for future expenses (car, home improvement, vacations, etc).

I've been asked lately by a few people why I am not just buying my home outright to avoid having any mortgage payments. Each time I try to explain that I am diversifying this way, I find it harder to explain myself, and I start to think perhaps it would be better to pay off the house and have less monthly liabilities.

If I do buy the house outright, I'll have approx. $70,000 to use in the various ways mentioned above, and will be able to put away more cash on a monthly basis.

So I'm looking for any opinions on what someone my age, in my situation should do. I should also mention that employment will be a question mark at first, I do not know how long it will take me to find a job at the time of our move.


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