March 15, 2015

5 Crazy Housing Alternatives

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One of the biggest expenses for retired and semi-retired people is housing. This makes housing a prime candidate when looking for big savings. We have touched on this topic in previous posts, and this post will continue that exploration.

Along with expense savings there are several reasons why someone might want to look at alternative housing arrangements. By alternative we mean something different than just buying or renting, which could certainly use their own discussion. Here are some reasons to consider alternative housing:

Budget reasons

This is probably the most thought of reason. Housing is one major area of your retirement budget where you have some control.

Simply to do something different

Maybe you have always had traditional housing arrangements are just looking to try something different. Retirement is a time in life where you get to try new things so why not?

Just plain better

Sometimes an alternative housing arrangement is just plain better. Best example I can think of for this is two single retired people to share housing. Often this might be a much better situation for social interaction and simply to help each other with daily activities.

Considering these good reasons let’s look at some alternatives:

Geo-arbitrage

This term first came into use as it related to sending jobs overseas where salaries were cheaper. As it relates to housing it simply means moving somewhere where living costs are less. During our full time working lives many of us had to work and live near big cities where housing costs are usually higher. Now that we are retired we have more choices. Sometimes this means moving across the country and sometimes a move only 50 miles away can make a huge difference.

Living Overseas

Here is one that you see mentioned often on the Internet. I would say it certainly is possible and could provide quite an adventure. However I would approach it carefully with a lot of research. I have seen articles that claim you can live quite well on Social Security alone. If nothing else I would suggest a “try it first” approach and make sure you have a plan in place to come back if things don’t work out as expected.

Shared Housing

This one is pretty common and makes sense for many single retirees. I would think the main thing is to have lots of discussions with the person you are planning to share with and again to think about the plan if it doesn’t work as expected. It can also work for couples although it gets even a little more complicated and you may want to formalize some agreements on how things will work.

RV Living

Retirees make up the majority of those enjoying the full time RVing lifestyle. There is quite a bit of information on the Internet and lots of variation in costs. Again I would suggest a “try it first” attitude and have a plan for what you will do it you decide you want to go back to a more “conventional” housing arrangement.

Homesteading

Homesteading is another option that isn’t for everybody and can take many forms. The basic idea is a more “do it yourself” lifestyle. It usually includes a more rural lifestyle, growing much of your own food, sometimes using alternative energy, and greater environmental awareness. Check out back issues of “Mother Earth News,” similar magazines and on line sources.

After reviewing some of these alternative housing arrangements they don’t seem so crazy after all! But there are some things to consider. Does the budget work? Does the arrangement make social sense to you? Do you have the physical and mental stamina for your choice?

Retirement is about doing things a little differently. It is important to remember that the choices you make do not have to be forever. We will certainly be talking about more housing alternatives in future posts.

Until next time…

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November 16, 2013

Homesteading in Retirement

Homesteading in Retirement

Note:  This article is another part of an ongoing series of alternative housing arrangements.

For some people homesteading may be an attractive housing alternative and exciting lifestyle change in retirement.  Homesteading can mean many things to different people but for our purposes we are talking about a more self-reliant lifestyle, probably in a more rural environment (although there are some people that set up homesteading in the city.)

Homesteading Isn’t Just for Hippies! (Not that there is anything wrong with Hippies!)

Homesteading can mean building your own house, growing your own food, and even living off the grid.  But it doesn’t have to mean doing all of those things, or doing them all at once.  For one thing you have to keep your physical abilities in mind.  Living in a tent for two years while you build a log cabin is not for everybody.  I recently read an article that talked about the “Back to the Earth” movement that tried to live totally off the land back in the sixties and seventies.  It turns out most abandoned that effort after a few years for a more conventional middle class lifestyle.  Now some are retiring and picking up the homesteading idea in a more comfortable way.  They still want to grow some of their own food, but they also want inside plumbing and Internet connectivity, although they may use various off grid technologies like wind or solar to power it all.

Homesteading Doesn’t Have to Mean a Huge Farm

Most homesteaders choose a rural location.  This sometimes allows for a little housing geo-arbitrage, the ability to live in a less expensive location (more about housing geo-arbitrage in a separate article.)  The Internet means a rural location can still allow opportunities for income and communication that were unavailable just a few years ago.  Homesteading doesn’t have to mean the big acreage that people used to associate with rural living.  In fact the recent trend seems to be smaller plots with intensive farming methods.

You Can Start Small

Many homesteaders find that growing at least some of their own food is a part of the self-reliant lifestyle they desire.  This doesn’t have to mean working the “back forty” with a team of draft horses.  It can start with a simple garden of a few vegetables and grow from there as you gain experience.  There are lots of good books and online resources and most advise to start small.  Eventually some homesteaders move on to bigger gardens and even small livestock like chickens and goats. It is also something you can start long before retirement with a backyard garden to gain experience.  This allows you to try a little piece of the homesteading lifestyle before you take the leap.

Good for the Environment

Environmental consciousness is another trait shared by many homesteaders.  For this reason many have an interest in alternative energy.  This can range from a complete “off the grid” existence to supplemental experiments in solar and wind technologies.  Again there is lots of good information available out there in books and on line resources.

Homesteading Mixed with other Housing Alternatives

Homesteading lends itself to the use of other housing cost reduction strategies.  I have already mentioned housing geo-arbitrage as a way to decrease expenses by moving to a less expensive location.  Homesteading might also lend itself well to house sharing.  For example how about the idea of a couple small cabins on a couple of acres with several couples each having their own cabin.  They could share expenses, gardening work, etc.  The possibilities are endless.

I have obviously only touched the surface of the homesteading option in retirement.  There is lots of room to explore further.  Hopefully at least some of you will want to look into this exciting lifestyle change.

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November 13, 2013

Can House Sharing Work for You?

House Sharing the Retirement Way

Note:  This article is another part of an ongoing series of alternative housing arrangements.

While everyone’s definition of retirement may differ one thing is certain – Retirement should be a time in life where you do things in new and fresh ways.  This is sort of like college and young adult life where you went from the easy security of your family’s home to something new.  For many this meant sharing a house or apartment.  It made sense then financially, and provided a supportive yet easy come and go arrangement.

Give House Sharing a Chance! 

For similar reasons house or apartment sharing might make sense for retired couples and singles.  This won’t work for everyone, and I’m sure some of you are rolling your eyes and saying “no way!”  But give it a chance and at least look at some of the pros and cons.  Make sure you are not dismissing it simply because you have become too set in your ways!

Financially, it May Make Sense

The financial reasons are obvious.  With a limited retirement income you are looking for ways to bring the housing part of your expenses down to a more manageable level.  A house or large apartment may be a better alternative to a small apartment or other options.  You can manage the burden of a mortgage (maybe), taxes and maintenance with little left over for other things or you can share those expenses and use the saved funds for travel, hobbies, or whatever else.  The situation is similar when renting.  Two or more couples or singles can share a house a larger apartment for a fraction of the total rent.

Ideally a shared arrangement can provide a better supportive environment for everybody involved.  There are simply more bodies to share the work.  This can be as simple as watering the plants when someone is away to sharing cooking and maintenance activities.  As people get older it can even help with handling illness and provide a more secure environment.

Sharing can help you get up and go when you want.  Someone is usually there to watch the house, and the extra dollars you save can be used for all those activities you envisioned in retirement.  This might include travel, hobbies, volunteer work, eating out occasionally at a fancy restaurant, etc…

Let’s consider a simple example.  John and Mary Smith own a 4 bedroom McMansion in the suburbs.  It has a couple bathrooms, and living and family room, and a rec room in the basement.  It is too much house for two people and more urgently it saddles the Smith’s with a $2000 mortgage payment.  Bob and Jane Jones love to travel and camp, but need a home base.  George and Evelyn Public have roots in the Smith’s area but like to travel to Florida for three months a year.

Here we have a perfect sharing arrangement.  Each couple could pay $667 a month.  The house is big enough that when they want privacy one couple can go to the living room, one to the family room and one to the rec room.  That really isn’t much of a problem anyway however because the Jones are hardly ever home, and even the Public’s are away three months a year.  Obviously this is a simplified example but there are lots of possibilities out there.

It is important in a sharing arrangement to discuss and write down all the arrangements and responsibilities for each party in advance.  Don’t forget the details like “Is smoking allowed?”, “Is drinking allowed?” or are there any quiet times.  It also might be good to spell out in advance a procedure for misunderstandings.

I’ll explore more on this topic in a future article.

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