Too late to the game?

Question

I’m 60. Will retire in 10 years on salary of 120k. Wife makes 30k a year and will retire 25 years from now.  Only debt is 250k mortgage on 500k house.  150k savings.  Just read Dave’s article on equity vs cashflow for retirement.  What would a plan look like for me?  Too late? Thank you

Travis Goodwin · Answer

You’re definitely not too late, but with a ten year window, I wouldn’t rush into buying real estate just because you feel behind. You have a good income, $150,000 saved, and around $250,000 in home equity. That gives you options, but you still need a clear plan.

You are too close to retirement to make careless decisions. I would sit down with a fiduciary financial planner and a good CPA, get the complete retirement picture, and then decide how real estate fits into it.

Brandon Vukelich · Answer

It would be irresponsible of me to offer financial advice, so I avoid that. I can speak to investing in our local market (I see Tacoma noted) based on what you provided. Unfortunately, with "only" $150k in savings, you don't have enough to get into the game in the Puget Sound unless you found a deal offering very accommodating seller financing terms with a low down payment, a low monthly rate or payment and a 3+ year balloon. You wouldn't want to put your entire nest egg into one deal anyway so <$100k barely gets you into a c-class duplex in our area and the single family deals are tough to cash flow without significant down payments and/or friendly seller financing terms. You could consider taking a small chunk and partnering with other investors on a deal. Sometimes it is better to own 25% of something decent rather than 100% of nothing. Best wishes on your retirement!

Denise Supplee · Answer

I don't think it's too late at all. You still have 10 years before retirement, and you've done a nice job keeping your debt manageable and building savings along the way. I'd say you should focus on making the most of the next 10 years and finding investments that fit the retirement lifestyle you're hoping to create. This is actually something we talk about quite a bit in our co-investing club. Everyone comes in with a different starting point and different goals, and those conversations often help people think through what might make the most sense for their own situation.