F I N A N C I A L S E R V I C E S , L L C
April Showers Bring May Flowers
“April showers bring May flowers” is a nice springtime rhyme, but when it comes to your financial situation, it may have a deeper meaning. What do I mean by that? Just like April showers, you set the stage for abundance and vitality during retirement by planning and preparing ahead of time. Once we finally retire, we reap the rewards of all our hard work, just like the May flowers that bloom. It’s a rosy picture, but the reality is that life throws curveballs to disrupt our plans. Suddenly, we have to look at our goals in a new light, and in some cases, those goals are now out of reach. Financially speaking, things aren’t adding up. That is to say, April showers do not always bring May flowers. When it comes to retirement, clients have different notions of what it means to live life to the fullest. Some clients plan to retire close to home in Michigan. Others plan to head to warmer climates on a permanent basis. There are also folks who want to split their time between Michigan and a warmer locale. Then comes the next big question: Do I rent, or do I buy? This decision can be what determines whether you get your “May flowers” in retirement.
A lot of people are of the mindset that buying your own property is the way to go. That way, you’re not making payments on someone else’s property; you’re making payments on your own. You’re in control, and it just makes more sense. Or does it? It depends on your goals and how those costs affect your financial future. Sometimes, it makes more sense to let others worry about the details of a property, whether it’s maintenance, general upkeep, or the various costs that go into a home. To expand on this further, for some of the clients I work with, buying a home with its insurance costs, upkeep, taxes, and monthly payments doesn’t make sense financially. Why maintain a 2,400-square-foot home when you only use 1,600 square feet? Or why buy a second home you’re only going to use three months out of the year? In these instances, it may serve you better to sell (or avoid purchasing) and shift to a rental. Let someone else deal with the payments, the maintenance, and everything else. This idea holds true when looking into a vacation or seasonal home. Initial costs for a second home can be prohibitive for most
people in a full retirement situation. But as I mentioned prior, they feel they should buy rather than rent, because then they truly own it. But look at it this way: If I rent a motor home and use it for a four-week period at $2,000 per week, I limit my total cost to $8,000. In an ownership situation, between the insurance, maintenance, and other miscellaneous expenses, my costs could easily exceed $8,000 per month. So, when it comes to these kinds of luxury items, you want to ask yourself this important question: Does spending a bulk of my assets and locking them into real estate prevent me from enjoying the retirement I planned? Or, coming back to my initial sentiment, do April showers bring May flowers? I always suggest trying before buying. Rent for at least two seasons in the area you’re interested in before making a final purchase decision. And, whether it’s a second home, a condo, an RV, or another car, look at all of the associated expenses first and make sure you will be financially able to enjoy your retirement to its fullest. –Gary Mattson
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