As you are planning for your retirement, it is a good idea to think about the 5-10 years leading up to retirement. This story will help you better understand why. Also, while planning for retirement help and advice can be found on other areas of this site.
My parents had an interesting life. My Father worked for an aerospace company in California and my Mother did massage at a hotel owned by Doris Day.
They decided to take the retirement plan at my Father's work which would pay only my Father as long as he was alive. My Father eventually retired and now my parents are both in their 80's.
Yet my Mother never retired and instead ran an adult foster care business. She made a good income from this business. However, she became overextended when several years ago, she decided to buy a second house that she hope to settle in when she retired. The house was built in the early 1900's and needed extensive repairs.
My Father was always a handyman and at the time they thought he could do a lot of the repairs. My Father's health deteriorated over the years and he could never focus on doing repairs like when he was younger.
I along with several workmen ended up helping them take the whole place apart. Over the years, some of the contractors I employed ended up cheating us with poor quality work that had to be redone. It became a real money pit. No longer did it look like an attractive place to retire.
Now the hope was to fix it up and eventually sell it to recoup the losses and make a large profit when it appreciated in value. This turned out to be the case as it steadily appreciated it value. But in order to pay the mortgage and the property taxes of over $5000 my parents took in renters.
A lot of the renters turned out to be deadbeats who did not pay the rent. The sheriff had to be enlisted to serve them notice. Not only was there a headache involved, but court costs had to be incurred.
One claimed that she suffered permanent disability when she fell on the steps. She wanted to be supported for life. It turned out that she had a habit of making fabricated lawsuits. Yet my parents had to defend themselves in court. they lost $10, 000 in attorney's fees, but fortunately won the case. They would have lost everything if they did not win the court case because the insurance company tried to get out of supporting them. They said the policy did not cover them.
Luckily, the property the renter fell on was not even my parent's property as it was a stairs on city property. They got through all these difficulties but eventually had to declare bankruptcy. They managed to keep their houses, but since the real estate market crashed, the value of their house took a plunge. Now they are trying to sell it and make a small profit.
The one thing I have learned from my parent's experience is to not overextend one's finances as one gets older. Unanticipated changes in the economy and health can make the future very uncertain. It is good to make one's life very simple and not take big risks as one gets older. A small house is sufficient if it provides warmth and security.