carol.cope[at]verizon.net (Carol Copeland) wrote in message news:<30de0360.0411061414.4ef97992[at]posting.google.com> ...
- quote -

The simplest solution is to move to a lower cost area. In many areas
of the country, you could buy a very nice house with twice the square
footage of your current one for, say, $250,000, and with property
taxes approximating your current amount. Paying cash for it would
leave you with a portfolio of about $1.4 million. Spice your portfolio
up a bit, say to between 60% and 75% stocks and you likely could draw
4%, or $56,000 per year, adjusted for inflation, forever. That could
make a substantial difference, if, for example, you had to take a cut
in pay to find a job in your new location.

Dave

carol.cope[at]verizon.net (Carol Copeland), you wrote:

<< <I> My wife and I both worked into our early 40's until we saved up enough
money to mortgage a modest <b> home in Northern CA. The sales price was
$225K in 1989 (1200 sq ft home, 6500 sq ft lot). </b
I was working for a computer company that hit it rich during the dot com
boom and cashed out of my stock just before the bust about 4 years ago.
We wound up with enough cash after taxes to pay off our mortgage and still
have ~$1M left over for investments. I was paranoid of stocks after the
bust and wound up investing about half of it in various money markets (T-
bills, CD's, Zurich Fund, etc.) and the other half in miscelleneous mutual
funds (bell-weathers like Templeton, Oppenheimer, Putnam, etc.) Another
words, we have been VERY conservative with the money from the stock sale.

Some vitals:

No children and no (zilch-zero) debts, cars all paid, etc.
My job is sole source of income (besides small interest on investments).
I am a computer professional who has been working continuously for 30+ years.
I am 54 years old, wife is 56 and we are thinking about retirement (of course).
Current plan is to keep working as long as current (shaky) job lasts.

In the last few years RE in this area has sky-rocketed and<b> our house is now
worth in the neighborhood of $650K, but we still pay very low property taxes
(about $3800/yr).</b> </i> >
Holy cow, it sounds like you live just around the corner from me!!! And
interestingly enough, we (my wife and I) also bought a 1200 sq.ft. home (a
little less actually) for $235K in 1989 (at the market was topping out at that
time) on a 7,700 sq.ft. lot. We're also in your same age bracket and my wife a
"computer professional" a long time in silicon valley.

.. . . .but we have couple of children still at home. ;-)

<< <I> We would like to move up to a better house but in this
area that would now be in the $1-1.2M price range. Even if we pay cash it
will cost us about ~$12000/yr just in taxes for a home in this category. We
are looking for some alternatives where we can improve our housing situation
but not have to pay high taxes, or at least devise some way to cover the bill.

I am concerned we will not be able to pay the property taxes if I lose my job
and go into a low income scenario.</I> >
Well, if you're anywhere near my neighborhood, you know that it's common now
that these 1200 sq.ft. homes are being demolished and 3000 sq.ft. homes are
going up in their place. When this started happening, I did the same thing.
I recently tore the house down to the dirt and build a new high end home which
is in the $1-1.2M price range. We've been in our new home for a couple of
years now and no real changes in the property taxes . . . .yet, anyway (maybe
just lucky so for, I think).

I feel you should seriously consider tearing down your old home and build knew.
To get the "better house" (maybe that means larger too), you might consider
building a one story home with a large basement for extra bedrooms and
entertainment area, as a basement area is not considered part of the living
area for tax basis evaluation. To be sure, you can check with your county or
maybe some local neighbors who may have already done this. For sure, building
on your currently owned property will result in much less property tax in
California than if you were to sell and buy a new home.

In your position I would continue with the job until it disappears, then I
would sell the house, move to a different part of the country where prices
are lower, and buy a new house there. People who live in California forget
how much cheaper houses are in the "flyover" states. Last year I bought a
newly built high quality 1250 sq ft house for $113,000. Property tax runs
about $1200/year. A house twice that big would run about $200k here. Also
note that your $1m would generate around $5k monthly income for life if
invested in an immediate annuity.

John Cowart

Carol Copeland <carol.cope[at]verizon.net> wrote:

- quote -

You might want to consider adding some rooms to your house. Perhaps,
landscaping would make it more livable.

--
Ron

My wife and I both worked into our early 40's until we saved up enough
money to mortgage a modest home in Northern CA. The sales price was
$225K in 1989 (1200 sq ft home, 6500 sq ft lot).

I was working for a computer company that hit it rich during the dot com
boom and cashed out of my stock just before the bust about 4 years ago.
We wound up with enough cash after taxes to pay off our mortgage and still
have ~$1M left over for investments. I was paranoid of stocks after the
bust and wound up investing about half of it in various money markets (T-
bills, CD's, Zurich Fund, etc.) and the other half in miscelleneous mutual
funds (bell-weathers like Templeton, Oppenheimer, Putnam, etc.) Another
words, we have been VERY conservative with the money from the stock sale.

Some vitals:

No children and no (zilch-zero) debts, cars all paid, etc.
My job is sole source of income (besides small interest on investments).
I am a computer professional who has been working continuously for 30+ years.
I am 54 years old, wife is 56 and we are thinking about retirement (of course).
Current plan is to keep working as long as current (shaky) job lasts.

In the last few years RE in this area has sky-rocketed and our house is now
worth in the neighborhood of $650K, but we still pay very low property taxes
(about $3800/yr). We would like to move up to a better house but in this
area that would now be in the $1-1.2M price range. Even if we pay cash it
will cost us about ~$12000/yr just in taxes for a home in this category. We
are looking for some alternatives where we can improve our housing situation
but not have to pay high taxes, or at least devise some way to cover the bill.
I am concerned we will not be able to pay the property taxes if I lose my job
and go into a low income scenario.

Thanks for any advice or suggestions you might have for this situation.