Mailbag: How Much is Too Much to Spend on a Forever Home?

August 4, 2022 / Eric Peterson /

Today’s Prep:

Retirement decisions involve a lot more than just the money, but also the emotional and lifestyle decisions, too. Eric answers three questions from the mailbag from listeners making retirement decisions.

Equipping Points:

Ellen in Nevada just sold some stock she had for over 25 years. How does the tax get calculated? This will be a long-term capital gain, but the shareholder is responsible for tracking that. Do you know what your cost basis is?

Elise in West Des Moines asks how much is too much to pay for their forever home. Her husband wants to spend less on their next home purchase but she wants to find the perfect place since it will be where they live for the rest of their lives. Home prices have gone up so much lately, so don’t assume the next house will be a lower price, even when you’re downsizing. You do want to get it right now. Having an income in retirement isn’t that bad since it’s a fixed monthly amount. Make sure your plan works with what you want.

Finally, Steven in Grimes just turned 72 and is about to retire. Between Social Security and RMDs, he will actually have a higher income in retirement than right now, while still working. Eric explains though that if you continue working, you do not have to take any required minimum distributions from the 401(k) you are contributing to at work. When you like to work, you might find yourself staying at your job longing. But there are other ways to stay active in retirement. When your finances are covered to maintain your standard of living in retirement, that might open a door to a lot more options you hadn’t considered before now.

Listen to the entire episode or skip ahead using the timestamps below.

0:46 – Mailbag: How does tax get calculated on stock sold?

4:04 – Mailbag: How much is too much to spend on a forever home?

6:44 – Mailbag: What do I do when my retirement income is more than my working income?

Today’s Takeaway: