I am currently in the planning stages of my retirement.  I am however not a financial planner and all my ideas are based on my unique situation.  I am 55 years old (as of this writing), a homeowner and currently employed and contribute to a 401k plan.  On the internet or youtube I could not find nothing dedicated to pre purchasing a retirement home when the real estate crash of 2007-8 occurred.  Today, however, I can find some that don't recommend this. The reason being that the price you pay for the retirement home can be more beneficial to your retirement years by putting that money into your retirement account.  No one that I know of during the housing crash suggested now is the time to get a cheap retirement home while they're available.  I did this purely on my own because I never saw such a great opportunity as the one that presented itself back in 2007-8.  I never saw prices of homes fall so far and fast in such a short time frame that I felt it necessary to go out and buy one.  The one I bought could not be built with the price I paid for it if I was to go out and buy the material and build it myself.  Below is my reason and description of solving my retirement home needs:

Back in 2009 I purchased my retirement home because of the real estate crash.  The house I bought was brand new and even came with a new home discount on the insurance policy.  I did not heed the above advice because of the uniqueness of the situation.  In some parts of California, housing prices really crashed hard and the place where I bought my retirement home is an area I have been visiting for years.  When the house was built in 2005, the original asking price was $275,000.  A price I was not willing to pay for a low cost comfortable retirement.  The housing crash pushed the price of the home down to $37,500.  A price I could not refuse.  Due however to a small bidding war, I paid $43,000 for it.  That was a good price for a retirement home, especially a new one.  I did not seek the advice of a financial planner but felt comfortable with the purchase.  Back in 2009 banks were in a paranoid state and would not consider me for a loan unless I came up with twenty percent down.  At that price, the down payment was easily obtained and I proceeded with the purchase.

The house consists of three bedrooms, two baths and a two car garage enclosed in about 1300 square feet of living space.  It has a concrete tile roof with a 50 year warranty and all the appliances are new.  The kitchen and baths have matching solid surface (Granite) countertops, but probably the most important, it is up to code.  Another advantage of a new home. It has a fireplace and the patio has a good view.  A good sized front and rear yard and no direct neighbors provide for privacy.  With California's property tax limiting proposition 13 property taxes are low since they are based on the purchase price of the home.  About 1 percent to give you an idea.  Here is a picture of it:

It is a stucco framed home, well insulated and has an alarm system.  The alarm system can be easily adaptable to such services such as where you wear a pendant around your neck with a push button and fall detection which can summon help if an emergency occurs. I currently use this home on weekends and it can easily be converted for wheelchair accessibility if needed.  Current monthly mortgage payment including property taxes and insurance is $350. Since its a thirty year fixed rate loan, the only fluctuations in payment will be increased property taxes which as proposition 13 states cannot increase more then 2% yearly and increased homeowners insurance premiums.There are no HOA fees or land rental contracts.  After the house is paid in five years my monthly payments for taxes and insurance are going to be around $200 a month. Utilities are low cost and the power company provides a 20% discount if your on limited income such as Social Security.  This home however uses propane for the stove, water heater, fireplace and central heating and I will need to arrange for someone to deliver it. Currently I use a small four gallon propane tank like those used in barbeques to provide propane.  Its sufficient for weekend use. I've never had to use the central heating even in the winter months and I only turn it on occasionally to test it.  Ironically, it is the first time I ever bought a new home.  If I would have waited and heeded the advice of financial planners the cost of this home would surely have gone up by the time I retire in about ten years.  Due to the low cost of the home, I intend to have it paid up in five years.  

I am a member of AARP and will probably be one for the remainder of my life.  They don't mention this area in their low cost retirement areas to live.  Probably because it does lack close by emergency medical facilities.  However I received an offer that I'm considering and that is to become a member of a life flight air ambulance service.  It currently costs $65.00 a year per household and covers medical flights to a hospital and covers everyone in the family.  I see this as extremely affordable since the nearest emergency room hospital is about half an hour drive from the house.

My philosophy is that I've worked all my adult life and always paid a mortgage and other bills to make the other person and/or corporations wealthier while attempting to maintain a decent middle class life.  In retirement I'm not going to be working so I'm trying to spend as little as possible to keep up the same lifestyle without the huge expenses.  Healthcare is my biggest wild card.  It is the one area that can ruin any type of retirement.  Also, its the primary reason I'm building up my 401k.

My housing needs in retirement are pretty much resolved and therefore I can concentrate now on other necessities and try to resolve them before fully retiring.

My primary residence, in National City California can take me two ways in ten years.  If housing crashes again, I can rent the primary residence and become a dreaded landlord or if I need the money at retirement, I can sell it and pocket the money for retirement.  The primary residence consists of two units, a three bedroom house and a studio rental in the back so it can easily be rented.  My monetary situation and health in ten years will be the deciding factor which direction I take.

Back in 2009 before I bought this home, I considered one of those small homes mounted on a trailer and at the time considered them affordable at $20,000 to $35,000.  I can see why people go that route because you can go pretty much anywhere similar to an RV.  But if you park it somewhere for an extended period of time, you will most likely have to pay someone rent for the space.  Another downside is that they are difficult for wheelchair access and usually have sleeping quarters above the living quarters which mean some type of stair or ladder.  Not a good option if your a senior citizen with mobility issues.

I was careful buying my retirement home to make sure it had no upstairs and all areas of the home are easily accessible should my health become an issue.  It is big enough to bring the grandchildren.  Speaking of grandchildren, they already love the place and whenever we go they want to tag along. Their description is they somehow feel freer there with the wide open spaces and riding around in off road vehicles.  

The reader of this blog should appreciate the fact that when the Great Recession struck back in 2008, my 401K plan took a significant hit and I don't have a lot of time to make it back up.  Some gains have been made, but it remains well below where it was before 2008 which forced me to increase my current contribution amount.  This in turn forced me to plan for a meager lifestyle retirement. If everything goes well,  I should still be able to take vacations yearly and plan at least one exotic vacation (i.e. Tahiti, Europe) every 5 years in retirement unless of course, my health becomes an issue. I am planning to use Social Security for my everyday expenses and my 401k funds for medical co-pays, vehicle purchases  home maintenance and to provide me with some sort of hobby, either off road toys or an ultralight aircraft or maybe both if I plan retirement better then expected.  One of my greatest desires in retirement is to do things I didn't do when living in the big city.  Primarily to keep me off the television so I don't go crazy.  I intend to spend as much time outdoors as possible. I will most likely seek some sort of volunteer position to pass the time and if retirement comes out less financially then expected and if health permits, possibly part time work.

I am simply an everyday Joe, in the 98 percent population bracket of people considered not wealthy. I'm sure you've probably heard the expression that 2% of the population hold like 95% of the countries wealth, well I'm not one of them. I'm simply worried about my declining years and making an attempt to create some sort of retirement lifestyle and not become a burden or dependent on anyone.  I will most likely die in my retirement home but again it is as one desires.  I expect this and it does not frighten me.  The reason being is that at 48 I already experienced death temporarily from a medical condition.

This is the first of a series of blogs I intend to write on my retirement and progress made towards achieving this goal.  The bulk will not be made with the expertise of a financial planner so please don't consider this as information you can use for your unique retirement situation.  I'll write about the area where my retirement home sits, how I maintain it and any significant changes to the neighborhood, either bad or good.  Please feel free to leave a comment if desired.