Working After Retirement

Many people seek to work part time after retirement.  But be careful.  Unless you have reached you full retirement age when you can earn as much money as you want and not be penalized, if you retire earlier, you will be penalized.  If you earn too much, you will be forced to give back some of your monthly Social Security payments.  And, if you earn too much, you could end up in a higher tax bracket related to monies owed for Medicare, which is means tested and specific to 401K and other pension distributions.   

So before you take a job after retiring, check with your accountant to see if it makes sense.  Obviously, if you are going to net less money overall by making a few bucks, better to volunteer your time at non profits that you support if you are just looking for something meaningful to do.  

Maybe a better strategy related to money management after you retire is cutting your living expenses to achieve the same end result.  Downsize your home.  Move to a lower cost of living and preferably no income tax state to reduce any tax burden you may have.  Consider your options.  At Paragon Home Resources, we work with many people every year moving to retire usually from a cold place to a warm place.  However, proximity to family and tax considerations are also big factors in choosing where to retire. 

The Right Time To Downsize

Moving from a larger home to a smaller home can happen at various stages in life.  Certainly, once the kids are gone and the couple are now officially empty nesters, it could be a good time to downsize.  It might also be the time to determine what floor plan makes the most sense for that stage in life.  One story living is always better as we get older.  It might be that fewer bedrooms make sense in favor of a home office or exercise room. 

Downsizing once the kids are gone is actually a pretty easy decision to make.  What is harder is downsizing as we grow even older.  If we are lucky enough to be married for many years into our 70's and beyond, sadly the day will come when a spouse will die.  Aside from the trauma of losing a life partner, all of a sudden the remaining person must face many decisions.  If the spouse that died used to take care of all the day to day finances, bill paying etc., it may be that the remaining spouse knows little or even nothing about what it takes to run the household.  Hopefully, there is a good will or estate plan in place to deal with financial matters; but it can still get very complicated related to just daily living.

This Blogger's mother outlived my father by 17 years.  She was 75 years old when my father died and in pretty good physical and mental shape.  They lived in a 55 or older secure, gated community in a low maintenance patio home with one story living.  We had moved them there many years before.  And fortunately, it was my mother who handled their finances, so there were no gaps in day to day management of her finances or home.  There was no reason for her to move until she was 87 years old when she decided to move into a senior community.  

Even so, as soon as my father died, I took over my mother's finances really to make things easier for her.  So, I took over the check book, which she really did not need to deal with anymore.  All bills went on auto debit.  I gave her whatever cash she wanted monthly since it was her money and or she just used her bank debit card to access cash.  She had a credit card that she used when buying things that was automatically paid every month out of her checking account. 

The point is that we thought ahead.  When my father died, while my mother dealt with her grief, since we had moved them into a brand new home in a very safe community from a home they had owned for 31 years,  my mother experienced no disruption to her life.  If they had still been in their old home, given that they lived many miles from family, we would have had to deal with a move then, or even sooner during the 2 years my father was very sick before he died, which would have been much more difficult. 

As we hit our 70's, we need to start having the "what if" discussions with family.  What if a spouse dies, which is inevitable.  It is best to plan ahead and make a move when both husband and wife are healthy.  The home should work for the remaining spouse when the other spouse dies.  Dealing with grief is more than enough to face, without the need for a move too.  At Paragon Home Resources we assist families with downsizing for a variety of reasons.  We understand the stress of moving; but we make it as easy as possible as we assist with both selling and buying homes, as well as, dealing with household goods.  We get the job done to make life decisions as easy as possible.  

Your Home Is An Important Investment

Many people do not see their homes as an investment; but the reality is that your home may be your most important investment.  Over the years, we have often learned the hard way that having too much money in the stock market is not the best idea.  Yes, the stock market today is at a record high; but it seems that every ten years or so, we see a major downturn in the stock market.   Certainly, anyone 60 and older should be in conservative investments to prevent major losses should the stock market take a tumble.  There are age adjusted mutual funds that get more conservative as someone grows older, which may make the most sense in order to protect assets if the market does fall dramatically.  

Just maybe your home should represent 50% of your overall portfolio to create balance.   As it happens right now both the stock and real estate markets are strong.  But it does not always happen that way.  The reason both are strong is because interest rates are so low.  When interest rates go up many will switch from stocks to bonds to secure a guaranteed return on investment of 3% or more.  When that happens stocks prices will go down.  However, real estate works a little differently.  Real estate is very much predicated on interest rates as well.  So as mortgage interest rates go up, home prices are moderated.  But, real estate is also dependent on both supply and demand and what is happening in the local economy.  

If there are more buyers than sellers, real estate prices go up.  If there are more sellers than buyers, real estate prices go down.  So states or areas with strong economies that are growing will see increases in real estate values.   States that are not growing usually because of high taxes and regulations generally will see less real estate value appreciation.

Most important, every time you make a mortgage payment you are growing equity in your home.  Over the years, if you have not used your home as a piggy bank to make purchases by refinancing and taking equity out of your home, you will pay off your home.  Once that happens, you will have options related to downsizing or moving to a lower cost area.  And, since you can deduct mortgage interest on your home with a mortgage up to $750,000, it will cut your income tax liability so the cost of owning a home is diminished.  You need to look at your home as an investment and important part of your portfolio.  It is just another place to put money; but in this case, you can live in it too.  

Buying A Home In A Seller's Market

Real Estate markets are hot all over the country.  In many places there are just weeks of inventory rather than the usual months.  This often means two things; fewer homes to choose from and at higher prices.  However, the good news is that if you are also selling a home particularly if moving from a higher cost area to a lower cost area, you will get top dollar for your home.  Yes, you will pay top dollar to buy another home in many cases, but if you have the equity to do it from the sale of your existing home, it is probably ok. 

Some might think, it could be smart to sell a home now and wait to buy another one until it is a buyer's market.  The problem with that scenario is mortgage interest rates.  There is no way interest rates can remain at these historically low rates forever.  The ability to lock in a 30 year mortgage at a 3% interest rate is incredible.  Historically, rates have averaged about 8%.  So while higher interest rates would moderate the prices of homes, the payments on a lower priced home when rates go back up could actually be more than the payments on a higher priced home with a 3% mortgage.  So waiting might not be a good strategy.  

The real issue today is finding a home that works for your family when there is so little inventory. Brand new homes are likely to sell for 20% more than an older home with the same square footage.  And, in many cases it is taking months to actually close on a new home because construction times are usually about 6 - 10 months, since most likely there are few desirable homes ready for immediate move in.  

Whatever the market, a buyer should always consider location, location, location.  Always remember there are no bargains in real estate.  If you buy crap, you will own crap that will be hard to sell when the day comes that you want to move.  So, take your time.  At Paragon Home Resources, we work with customers in all phases of life to assist with life decisions.  We can help you sell your home for the best price possible and buy another for the best price.  We have worked in good markets and bad markets for years.  We know how to maximize opportunities to make the right decisions that will stand the test of time.  

Having The Right Home Insurance Coverage

Many people know little about their home insurance coverage until disaster strikes and then they learn the hard way that they may not have sufficient coverage to rebuild their home in the event of a fire or other disaster.  The best advice I have ever gotten related to home insurance came from a few questions from the insurance broker in reference to buying insurance for my parent's home.  He asked me if my parent's home was paid off.  The answer was Yes.  He then asked if my parent's had the savings to rebuild their home in the event of a total loss.  The answer to that question was No.  He then said that my parents needed the maximum coverage so that if their home burned to the ground, they would have full replacement value, which was just common sense.  

If you have a mortgage on your home, the mortgage company will require that they be named as a co-insured on your policy so that in the event of total destruction, they will get their loan repaid.  The three mistakes people make are 1. Not Having Enough Coverage.  2. Not Having the Right Coverage and 3. Not Having Coverage for Natural Disasters.  

Home insurance must be reviewed annually to make sure the coverage is sufficient to rebuild your home in the event of a total loss.  That means having an understanding of local building costs, which could change.   You will want to have replacement value insurance so that your home will be rebuilt if needed.  Insurance on your personal items like furniture is a separate rider to the policy.  If you live in areas that have floods, tornadoes, hurricanes and earthquakes, unless you have insurance coverage for natural disasters, which can be very expensive you may not have coverage at all if you don't purchase it.  You also need to be aware of deductibles that you may have to pay out of pocket before the insurance company will pay.  A flat dollar amount is better than a percentage of value. 

It makes sense every year to review your home insurance coverage with your insurance broker to make sure you have the coverage you need.  You certainly can shop your policy with various firms to get the lowest price and deductibles.  Most important, it is better to be safe than sorry.  Any kind of insurance only matters when it matters.  The last thing you want to experience are hassles to deal with rebuilding your home in the event of a total loss.    

Choosing A Place To Retire - Think Ahead

It is very common for people ready to retire to move from cold places to warm places.  That is the reason states like North and South Carolina, Florida, Arizona, Nevada and even Texas are high on the list in addition to lower or no income taxes and cost of living considerations.  But there are other things to consider as well.  Having family near by should be a consideration because the day will come when a Senior may need help to deal with daily issues. 

However, even before then if moving to a second or third tier city,  one of the most important things to consider is good medical care within 30 minutes driving time.   That means full service hospitals.  While you can leave town for a planned surgery if needed to get to a better hospital, if what occurs is a medical emergency, that local hospital will be critical.  And, for people with chronic ailments, many second and third tier cities have a shortage of doctors and especially specialists.  So before you make a move, make sure there are doctors available that can take you and that will accept your medical insurance coverage.  Many have practices that are full.  Don't move where you can't get good medical care.  

Next, are amenities like shopping, restaurants, sports, live theater if that is important to you and continuing education.  Can you get your car serviced nearby.  Believe it or not, there are some smaller towns that do not have all brand dealerships.  My rule in retirement is that I like everything within 10 miles of where I live so if I have to drive further, I am not interested in living there.  Sometimes people choose to live in very rural areas in retirement far away from medical care and other amenities.  That is not likely to be a good long term decision.   Don't do it because it will result in another move in the future.  

At Paragon Home Resources, we often work with Seniors both moving to retire and also Seniors moving into Senior Care Communities.   We are in a position to assist with life decisions as people consider their options.  It is important to think about life today and life tomorrow to make the right decision when choosing a place to retire.  

The Importance of a Home Office

With so many people working from home as a result of Covid and even before, most people seem to want a home office.  Whether it is just a dedicated space somewhere in the home, a bedroom, a den, or an actual designated office that is separated from other living spaces, this has occurred with the advent of the computer along with other equipment to support document preparation and storage. The good news is that computers and printers are relatively cheap.  The companies that make printers basically give them away to get the long term ink business.  

If you are setting up a home office, you should think ergonomics to some degree.  Having a comfortable chair that is adjustable as to height and other settings is a good idea.  And, there is no reason to use a small screen or lap top key board, even if you use a lap top.  You can connect to a big screen monitor and regular key board both of which making using the computer easier.  You may have to hire a computer nerd to set up your home office to get it all right.  

Further, for those of us that wear glasses, it might be that a special pair designed for computer use makes good sense to prevent neck strain.  Home offices need plenty of over head and or natural light so canned lighting in the ceiling is beneficial.  And, then there is storage.  I like a walk in closet that will house a large 4 drawer fire proof file cabinet for important documents.  They are expensive and very heavy; but most people have critical documents that are hard to replace in the event of a fire or other disaster.  

Home offices, or a home office space should be away from family space.  The whole point is that you are using the space to do work whether personal or for business.  Floor plans matter.  At Paragon Home Resources, we work with people to sell and buy homes.  More often than not when discussing needs and wants, a home office is at the top of the list.  

Rediscovering Your Home

After of year of Covid shut downs and diminished travel, many people have rediscovered their homes.  This has meant smaller gatherings with friends and family at home.  In some cases, it has involved cooking meals together and or having food delivered from those favorite restaurants that are still in business.   It may also have meant taking a hard look at our homes to change functionality, or maybe buy some new furniture that is more comfortable.

People are starved to get back to normal when we could go to restaurants and or travel, however, now that we have begun using our homes more just maybe the trend will continue for a while anyway.  Neighborhood friends have become even more important.   We have added cable channels for entertainment.  There really is no need to go to a theater for movies when with big screen TV's and the ability to access just about any movie at home, why leave the comfort of home.  This does not speak well for the theater industry; but it may be the new normal that comes out of Covid.  

Having plenty of food in the home to diminish trips to the market has also occurred.  This means bigger freezers and pantries for storage.   Canned goods last months.  We have also seen the value in this strategy with the recent power outages in Texas and other states.  Covid has changed everything at least for as long as it remains a memory.  Clearly, we now see our home as not just a place to live; but as a sanctuary in times of trouble.  Maybe that is a good thing. 

At Paragon Home Resources, we have always known the value of our homes as we assist many with selling and buying homes.   We help people sort through their needs and wants to choose just the right home for their families.  Today, making those decisions are more important than ever.  

The Kitchen Is The Most Important Room In The Home

Years ago, homes were built with the kitchen usually in the back of the house in an enclosed room.  The thinking was that cooking was messy and should not be done in view of guests or even family.  Once the food was prepared, it was brought out to the dining room where the meal was consumed.  Once the meal was over, usually Mom went back into the kitchen to clean up.  Boy have things changes.  Today, the kitchen is the center of the home and the most important room in the home.  

More often than not in new homes and in renovations, people want "open concept" meaning that the kitchen is now part of the living space rather than separate and apart from it.   People want a big island that is used to prepare foods and as a central meeting point for family and friends.  In fact, everybody gets into the act as family members and guests are often asked to participate in making the meal.   So it is no longer just about eating the meal; but the total experience of creating it. 

There is no doubt that a kitchen renovation will produce the greatest return on investment in terms of the home's value.   Farm style deep sinks are very popular.  Gas cook tops are preferable to electric because no good chef would cook on an electric cook top.   Double ovens and warming drawers are becoming more common along with other built in appliances including refrigerators and of course dish washers.  Most people prefer stainless steel appliances, but in more expensive homes wood panels are becoming common as well.  

If remodeling a kitchen, it is really is best to work with a professional in kitchen design to get the most bang for your buck.  Roll out drawers in kitchen cabinets to put dishes below the counter instead of above it has become the trend.  And, the counters today are usually made out of granite, quartz or other stone like materials with tile back splashes in any number of designs and patterns.  Kitchens really are the most important room in the home.  

Do You Need A Home Generator

As we watched the state of Texas be without electricity for days during a recent series of storms that brought freezing weather, it raises the question, do you need a whole house generator?  And, the answer is maybe.  If you live in a state with extreme temperatures, whether hot or cold and or one that regularly experiences hurricanes, tornadoes, major storms, earthquakes and black out's like California, then maybe spending $10,000 for a whole house natural gas generator makes sense.  

What we learned from the Texas experience is that renewable energy depending on solar and or wind helped cause the crisis.  When the sun don't shine and the wind don't blow, then states better have natural gas or nuclear power plants to generate electricity.  In the case of Texas, the wind did blow with a 20 below zero wind chill factor that actually froze up the wind turbines so they could not generate power.  It is very clear from all of this that we need an all of the above energy strategy that includes oil, natural gas, nuclear, clean coal and renewables.  We need to make all sources of energy cleaner, safer and cheaper to maintain our standard of living. 

But back to the generator question.   Those people in Texas and other states that lost power who had generators did just fine.  It may be that people living in those states most susceptible to power outages should make the investment to purchase a gas power whole house generator because being without power for days is not fun. 

Do You Need A Home Security System

Do you need a home security system?  It is pretty easy to answer that question.  Aside from your personal safety, if you have things worth stealing then the answer is probably that you do need a home security system.  This is particularly true if you don't live in a gated community and you do live in or near a high crime area.  Robberies happen all the time.  And, thieves are not stupid.  They go where the goods are worth stealing that they can sell for drugs or money.  

The good news is that home security systems are relatively inexpensive today.  Installation is quick and easy and monthly fees are usually about $30 to $40 a month to monitor your home.  However, if you don't remember to turn off the system when you enter your home and the alarm goes off,  though you may get one or two freebies, if the sheriff comes out to a false alarm, eventually you will get a charge from your city.  I have heard that the charge could be as much as $250 every time they have to come out to a false alarm.

The key pad is usually right at the door so easy to access.  But, you must have the discipline to push the buttons when you enter your home.  If not, it can get pretty expensive to pay for false alarms.   This blogger really likes gated communities especially for older people; but really for everybody.  Of course, it will mean an HOA fee; but I think the extra security is worth it.  

Sadly, we live in a world where crimes happen.  We see anarchy on our streets in many cities.  Their are cries to "defund" the police, which is crazy.  We often think crimes hit other people; but the reality is that crimes can hit anyone.  Always be aware of your surroundings.  Make your home as safe as possible by installing lots of outdoor lighting. Crooks love dark spaces where they can hide when breaking into your home. 

At Paragon Home Resources, we work with partners that can install home security systems.  We believe it is better to be safe than sorry.  We can help you choose a system that is right for you and your family.  

Buying a House Or A Condo

Generally given a preference strictly speaking from a real estate appreciation stand point, a single family home will appreciate more than a condo.  However, in some markets like New York City, it may be that condos, town homes or co-ops are the only option.  It would be rare to find a single family detached home on Manhattan.  Given a choice, stay away from co-ops where you are actually buying shares in the building rather than fee simple real estate.   Selling that type of property requires approval by a co-op board, which can be problematic.  

Condos tend to be popular with younger people, first time home buyers looking to get into their first home mostly because they can't afford a single family home.  And, Seniors that have owned single family homes and no longer want to deal with outside maintenance sometimes gravitate toward condos.  However, it is funny to hear people say, "I don't want to deal with maintenance any more" as the reason for moving into a condo.  The fact is that condos come with monthly home owner association fees to pay for outside maintenance.  So in essence a condo owner is paying for the gardener, pest control, trash, outside painting and roofing.  And, there can be special assessments to pay for big maintenance projects.  

The reality is that people who own single family homes can pay for all the same services.  And, at least with a little land between properties, there is less chance of being directly connected to another home owner who could be a problem.  There are also issues with noise and other issues that can come up in condos.  Of course, there are rules with the HOA there to safeguard against unruly neighbor's behaviors; but higher density insures the potential for issues that can occur.  

Still condos make good sense for a lot of people.  If it is the only way to afford a home, it makes perfect sense.  And if older people can get one story living in a condo that could work too.  In buying any real estate always remember location, location, location.  And, if you buy crap, you own crap.  There are no bargain in real estate.  At Paragon Home Resources, we work clients daily to assist in selling and buying homes.   We can discuss the pro's and con's of condo versus single family home ownership to help make sure that you make the right life decision.  

Buying A Home With A Swimming Pool

In many areas of country presumably with year around climates, it may make sense to buy a home with a swimming pool if it is something that will be used regularly.  However, in areas where it is likely that the swimming pool will only see use for 3 or 4 months a year, it could actually be seen as a negative.   It is expensive to maintain a swimming pool adding to electricity, natural gas or solar for heating cost.  And, swimming pools require weekly cleaning including adding salt or chemicals to maintain the right balance of the water purity.

It could make a lot more sense to buy a home with a homeowner's association that provides a swimming pool included in monthly dues.   And, or for those that can afford to so joining a country club that provides swimming pools is a lot easier than caring for one at home.  Owning a home with a swimming pool is often seen as a great benefit for the family; but only if it gets used regularly.  

Today, when building a new swimming pool more often that not people are installing splash pools that are perhaps no more than 5 feet deep at one end with a walk in step that is several feet long and deep.  The notion of big resort pools are going by the wayside because they are expensive to build and very expensive to maintain.  

At Paragon Home Resources since we help people with selling and buying homes, we can discuss the pro's and con's of buying a home with a swimming pool.  Sometimes a second opinion is needed to help a family with this important decision.  

Preparing For A Natural Or Man Made Disaster

All parts of the United States and world experience storms, hurricanes, tornadoes, earthquakes, tsunamis, volcanic eruptions and more recently made made disasters related to riots, looting and arson.  When these events occur, it is very possible that you could be without electricity and even natural gas for hours, days or even weeks.  Are you prepared to deal with a natural or man made disaster.  I suspect the answer for most people is probably not.  

Everything we depend on is predicated on electricity.   This is why we cannot rely on wind and solar alone.  There has to be carbon and or nuclear energy somewhere in the picture to guarantee a stable source of electricity.  It may be that all new homes should come with generators.  And, or in older homes maybe it makes sense to add a generator powered by either natural gas and or propane.  Most people probably cannot afford the $10,000 or more it would cost for a generator; but there are other things you can do to get you through a power outage.  

The easiest thing involves battery powered lighting, rather than candles that could cause fires.  There is nothing worse than being in the dark for hours at a time.  Obviously stocking up on canned goods is a good idea.  Having a gas cook top is better than electric because you can start the flame with a match if the electricity is off that would normally provide the spark to start the flame.  This assumes that natural gas is still working, which may not be true.  It could be a good plan to have a little camper cook top powered by propane.  And, if you have a wood burning fireplace, having fire wood on hand is a good idea to provide for heat during winter months.  

Water, Water, Water.  Stocking up on bottled water is really important.  The number of gallons needed depends on family size; but assume that you will have no water for some period of time.  Anybody with a swimming pool can use pool water to flush toilets; but not for drinking.  Otherwise, if the water is off, using the toilet will be a problem.   You may have to resort to a camper porta potty.  

Clearly, preparing for a natural or man made disaster requires some planning.  But do the what if's.  What if, we have no electricity, water or natural gas for hours, days or even weeks.  Odds are pretty good that if the event goes on for weeks, you will leave your home assuming you can get gasoline to drive away.  So let's just assume you are planning for hours or days in order to survive in your home.  Check the boxes related to the things you would need to at least get by.  You won't be comfortable; but at least you will be able to manage for a short amount of time.  

Making Your Home Retirement Friendly

Unless you are living in a senior community and or you have not already done renovations, if you plan to stay in your home during retirement, it is really important that you make it retirement friendly.  There are many easy things you can do that don't cost very much.  First, all showers and tubs must have grab bars so both you and your older guests have something to hang on to if needed while bathing.   If you have round door knobs have them changed out to lever door knobs, which are easier to manipulate.   If you don't already have lower drawers, install roll out's in your lower kitchen cabinets so you can put your dishes there instead of in upper kitchen cabinets that may be harder to reach.  

Single story living is always preferable; but if you live in a two story house and your washer and dryer are in a basement, they need to come upstairs preferable on the same floor as your master bedroom.  The good news is that with stackable washers and dryers, a small amount of space is needed to make this work.  Next are the stairs.  It would be good if you can use space on the first floor if not already there to make a master bedroom with bath on the first floor so you don't need to do stairs at all even if it means getting rid of space you don't need anymore like a living room or adding a room and bath.  The key is to get your entire living on one floor one way or another.  If that is not feasible, you can cost effectively put in a modular elevator or the stair lifter, when the time comes if getting upstairs is the only option.  

Specific to the master bath, if you don't have room for both a bathtub and shower, get rid of the bathtub to install a big walk in shower with bench and both a normal shower head and a hose type shower head to allow for bathing while seated on the bench; again with lots of grab bars.  Steps are the enemy as we get older because falling can be lethal.  If steps can be replaced with ramps going into and out of the garage or house that would be best.  Think handicapped and wheel chairs.  The odds are pretty good that at some point in retirement, you could be in a wheel chair if nothing else just recovering from a fall or surgery.  

Get rid of throw rugs and clutter that could cause a fall.  Make sure you have lots of clearance to move around.  Falling is the single biggest reason Seniors end up in Senior Care facilities.  At all cost, you must avoid a fall because it can cause a sequence of unpleasant events.  

As soon as you determine you want to stay in your current home, short of moving, it is time to make your home retirement friendly.  Either way, Paragon Home Resources can help.  We can refer you to specialists to make your home retirement friendly or if moving to another home is a better option, we can help with selling and buying a retirement friendly home, dealing with household goods and many other services to make moving as easy as possible.  Living comfortably and safely in retirement should always be the goal.    

Dealing With Scams - Beware The Risk Is Real

Scam artists prey on senior citizens; though they are active across all age groups.  Unless you initiate a call to a company you do business with, Never, Never give out any information over the phone especially credit card numbers,  your Social Security number or Driver's license number.   The same is true about giving out that information over the Internet.  You Must check your bank, 401K, stock accounts regularly to make sure they have not been breached.  And, always look at your credit card statements.  If you see any charges that are not yours call the credit card company immediately to have them removed.  And, further if your credit card has been breached you must have them send you a new one with a new number. 

All of us get dozens of Robo calls every day from scam artists.  It is best if you have caller identification and if it is a number you are not familiar with let it go to voice mail.  If it is somebody you need to talk to they will leave a message.   Scam artists work 7/24 to bilk you out of your money or information so they can steal from you.  You can never let your guard down.

If you can't find your credit card, call immediately and cancel it and have them send out a new card with a new number.  It can be inconvenient especially if you have automatic payments on that particular card, but it is the only way to stop unauthorized charges.  It is better to use credit cards for automatic payments than a debit card that goes right to your checking account.  Credit card companies generally will remove unauthorized charges.  If someone gets into your checking account, your money could be long gone before you know what hit you.  Banks will usually cover it, but it is more hassle.  

Dealing with Scams requires vigilance.  This is a national an international problem and crime.  It is getting worse and not better.  We need more government action to go after these scam artist and put them in jail.  

Budgeting For The Cost of Energy

President Biden is issuing various Executive Orders, which many analysts predict will raise the cost of energy.  That means higher electricity, natural gas and gasoline prices in the years ahead.  This could mean adjusting your budget to include as much as 30% or more for higher energy prices.  There are some things you can do to mitigate higher prices; but they are not free.   More energy efficient windows can be installed on your home.  Perhaps, additional insulation in your attic would cut heating and air conditioning costs.  If you are sitting on a heating and air conditioning system that is more than 10 years old rather than repair them, it might be time to install higher efficiency units.   And, of course, you can have solar panels installed on your home. 

The real question is return on investment.  Clearly, if you plan to stay in your home for at least 10 more years making these investments now will probably provide a good return on investment.  Depending on the size of your home everything I have listed could cost  $50,000 or more.  However, there still may be some state or federal tax credits available to help cushion the cost.  

Next, is the issue of your car.  Strictly electric cars, which may be the wave of the future are not cheap.  The premium over a gasoline powered car may be well over $10,000, however when gas goes to $5 a gallon, which is likely, if you do a lot of driving, you should get your money back over the life of the car.  Hybrids make good sense since they run on both gasoline and electric power.  The mileage is usually not as good; but at least you don't have to worry about refueling on long trips.  

The cost of energy will be a hot topic in the years ahead. The so called "Green New Deal" will result in higher energy cost.  The only question is, what can we do lower what we are paying so that we have more money to spend on other things that are important to living a great life.   

Working in Retirement - The Rocking Chair Is Gone

Years ago, when people retired usually at 65 years old, it was often to a rocking chair life style.   Unless someone has serious health issues, that is just not true any more.  Very often people who retire are just as busy in retirement as they were when their worked.  Some are getting jobs and or are doing consulting in their field.  Others are very involved in charity work supporting various worthy causes. In some cases, healthy seniors work to earn a little extra money perhaps to take vacations or maybe to fund 529's for their grandchildren.  And, since Medicare is means tested and far from free for many, others are working longer to deal with health care costs.  

To some degree every one should consider their genetics.  If you parents lived to be 85 or older, odds are pretty good that you will live at least that long unless you die from an accidental death.  So the real question is, do you have the money in savings one way or another to get you to 90 because in all likelihood Social Security will only end up being about 25% of your income.  This assumes that the federal government takes action soon to make sure that Social Security and Medicare remain solvent.  As of now both are headed toward insolvency, which would mean lower Social Security payments and even higher cost for Medicare if government does not find a fix.  

Unless you are very wealthy and money is not an issue, downsizing should probably be part of any retirement plan.   Living actively for as long as possible should be the goal.  Physical space just becomes more of a burden both from an expense and life style standpoint.  Single story living is best.  Buying more things later in life that your heirs will not want and will end up in a garage sale is probably not the best idea.  Remember, you are trading dollars you may need later for things that will depreciate in value.  Don't do it. 

If you are thinking of downsizing as part of your retirement plan, just call Paragon Home Resources.  We can assist with selling your home, buying a smaller one, dealing with household goods and many other valuable services to make moving easy.  We assist our customers with life decisions.  We understand that retirement has little to do with a rocking chair any more.  

The Covid Pandemic Has Changed Everything

We have been dealing with the Covid Pandemic for about a year.  There is no doubt that the impact of this virus on our country has changed everything and in many instances for good.  70% of the thousands of people who died from Covid were 70 years or older many with various other complications.  Those who got Covid either experienced no symptoms,  mild symptoms, or flu like symptoms with about 2% ending up very sick in hospitals.  These are the direct results of the Covid pandemic; but there are many other implications that have impacted peoples lives.  

Thousands of businesses have closed for good.  There is a pretty good chance that your favorite family owned restaurant is gone never to return.  While government has provided some assistance, it is now estimated that 9 million small businesses, about 30% of the total will close by the end of 2021.  Government assistance has been too little too late.  Sadly, Covid was politicized in the last election.  Project Warp Speed got us the vaccine in record time; but now it may take all of 2021 to get everyone vaccinated.  And, the American Medical Association came out and said that the malaria pill cocktail, being used all over the world, is just fine to treat Covid.  We must wonder how many lives could have been saved if Doctors were permitted to prescribe this cheap remedy long before now.  

Most public schools have been closed using on line learning, which is not very effective instead.  Now the Center for Disease Control (CDC)) tells us it's fine for the schools to open up with or without staff being vaccinated because kids for the most part are not transmitters of the virus.  Government credibility in all of this is destroyed.  Closing schools for an entire year has had a major negative impact on our economy and parents juggling jobs and kids for the past year.  The stress on families has been immeasurable.  Hopefully, all public schools will open soon. 

There had been a growing trend related to people working from home.  Covid accelerated that trend so much so that even after we get back to some semblance of normal, there will be many more people working from home.  This change is likely to be permanent, which will have a major impact on commercial office space that will need to be repurposed.  From a real estate perspective, the notion of a home office becomes even more important.  

Business travel in not likely to go back to what it was in the past.  Companies have figured out that Zoom meetings work just fine.  The notion of the road warrior has been impacted going forward.  Why incur high travel costs for a few hour meeting when it is just as easy to do a Zoom meeting.  This will have a profound impact on the airline, hotel and restaurant industries that rely heavily on business travel that may have been 50% of their revenues.  

The Covid Pandemic has changed everything.  Trends that were happening anyway have been accelerated.  It could take years to get back to any semblance of normal.  

Best Places To Retire

 As the saying goes, "home is where the heart is", but in choosing a place to retire there are many considerations.  Ideally, it would be good if there is family near by; but that is not always possible.  Next, it definitely is good to move from high cost of living, high tax states, since living on a fixed income is easier in lower cost of living, little or no income tax states.  Currently, there are eight states that impose no personal state income taxes.  They are Alaska, Texas, Nevada, Florida, Wyoming, South Dakota, Washington and Tennessee.  Paying no state income taxes will be critical when taking out 401K or IRA monies to actually net more money from savings.  

Since most people facing retirement prefer to move from cold to warm states, factoring out the states that are freezing and or rainy all winter, Texas, Nevada, Tennessee and Florida would seem to be the best options.  Arizona is also popular; but they do have a state income tax; though they do not tax Social Security income.  The four states listed have a reasonable cost of living and great quality of life.  These are the reasons these states continue to attract people in retirement.  

All of these states have great 55 or older communities some gated and some not; but all that offer all sorts of amenities usually tied to a Home Owner's Association.  Since many retiring people move to these states from other areas, often without family nearby, it is easy to make new friends by joining various organizations.  Before deciding on any move, do your homework.  Research the best towns or cities for you based on your interests.  

Great hospitals are a must for people in retirement so hospitals and medical care should be at the top of the list.  After that some people like professional sports.  It is possible to move to a big city; but since many now have master planned communities, things like heavy traffic can be avoided.  My rule is that I want everything within 5 miles of where I live.  So, shopping, doctors, hospitals, recreation, restaurants etc. nearby.  

There are many great places to retire.  Decide what is important to you and choose a state and city.  At Paragon Home Resources, we work with many Seniors each year moving to retire.  We can assist with selling and buying a home, as well as, the disposition of household goods shipping cars etc. along with many other services to make moving as easy as possible.  

Technology Now A Part of Daily Home Life

Most people under 65 years old have computer skills from their work or just personal buying habits.  Many older than 65 that never used computers at work are now in trouble.   In a drive to reduce labor costs, most companies have turned to automation.  If you try to call your bank, you will go through telephone hell in an attempt to reach a live body.  If you don't give up and push the right buttons, eventually you might get to a live body; but don't count on it.  And, you can forget about getting help at the bank.  They will refer you to their website.  Let's face it.  Companies have made it very difficult to get to a live body because they don't want the expense.  

This has really become apparent trying to set up an appointment for a Covid vaccine shot.  The first groups eligible are those over 65 years old many of whom don't even have computers.  Some counties have set up 800 numbers to make appointments for those that cannot do it over the Internet.  But in many cases, setting up an appointment involves putting an App on your cell phone.  If you don't have an IPhone allowing you to do so to get texts, you are out of luck. 

So, if you are one of those old dogs who refuses to learn new tricks, you better ask a friend or relative to assist you.  This is only going to get worse.  Or, if you don't want to depend on others, you will have to buy a cheap computer and get Internet connectivity in your home.  This will add to your cable cost; but it is what it is.  Then you will need to get some lessons on how to use the computer to go on websites to get things done.  A friend or relative should be able to teach you enough to become reasonably proficient.  You will get frustrated, guaranteed.  You will need a user name and password to access any company site.  You will have to set that up once for each company and write it down because you will not remember all of them.  

None of this is going away.  If you want to remain independent for as long as possible, you will need to develop basic computer skills.  Failure to do so means dependency.  So decide which option you prefer.  

Kitchen & Bath Renovations - Good Investments

There are many indicators that demonstrate that kitchen and bath renovations provide the best return on investment related to real estate values.  The place to start is the budget.  These renovations can be very costly depending on the materials chosen for the job.  At the end of the day, it has to be about how much you have to spend to get the job done.  And, it is not a good idea to over improve for the neighborhood or the home.   For example, it makes no sense to spend $100,000 for a new kitchen in a home that is valued at $400,000 because in all likelihood the home will not increase in value by the dollars spent on the renovation.  

The good news is that there are many cost effective options specific to flooring, tiles, appliances and cabinetry to accommodate any budget.  It is best to stick to neutral tones with a splash of accent colors in order to avoid buyer objections later on when the home is sold.  And, be careful about doing a renovation that is too trendy, which just a few short years later will seem out of date.  Patterns in tiles will make the space look smaller.  So while pattern tiles can be used for accents, doing a whole wall in a pattern tile is not the best idea.  

Make sure you are working with a reputable contractor.  Get more than one bid and check references.  Stick with licensed contractors that have been in business for years.  Get the necessary permits to do the job.  As the saying goes measure three times and cut once.  Change orders are possible once the job starts; but they can be costly.  So make sure you like the plan and design you have selected and stick with it.  And, just assume it will take more time than originally projected.  Allow for 10% of the budget for unexpected expenses.  Once the contractor opens up the walls, there can be issued that must be addressed to complete the job.  

Kitchen and bath renovations are a good investment properly done.  At Paragon Home Resources, we  work with our customers to recommend reputable contractors to implement home renovations.  Following the general rules in this post will lead to a good and valuable end result.  

Buying Your First Home - What To Consider

 Anyone who has never owned a home, should absolutely buy one today.  30 year fixed mortgage interest rates are so low at 3% or less that with a minimum down payment, the mortgage payment, taxes and insurance may be less, or about the same as paying rent.  Owning a home is the beginning of getting on to the wealth ladder because over time, with inflation, homes tend to appreciate in value.  However, it is a long term investment and should be seen that way.  

When buying any property, location, location, location is the key to value.  And remember, there are no bargains in real estate.  If a home is selling for less than others in the neighborhood, it may involve various factors that diminish value.  If the home is on a busy street or near high voltage power lines, stay away.  Avoid properties in a flood zone.  It is always better to buy a home above the grade of the street than below the grade of the street.  The reality is that if you buy crap, you will own crap and crap rarely turns to gold.  Always, think about resale value because some day, you will want to sell the home.  

It is better to buy a single family home even if on a small lot than a condo unless a condo is all you can afford.  A single family home generally will always appreciate more than a condo in the same area.  Think ahead to avoid the need for a move in just a few years.  If you are thinking of having a family, buy as big a house as you can afford.   Curb appeal matters.  Don't buy a White Elephant with an architectural style that is uncommon for the area.  

Most important, order a general home inspection before buying any home even a new home.  If there are major roofing, plumbing or electrical issues, you may want to pass.  It can cost thousands of dollars to deal with these issues.  At Paragon Home Resources, we can help you make good decisions in buying your first home.  We have been there, done that many times for our customers. We can help insure that the decisions you make will stand the test of time.  

Home Repair Insurance - Probably a Good Idea

Seniors living on a fixed income and or others who would have a problem covering a big repair expense, might be better off buying home repair insurance to fix annual liability.   There are several companies that provide it.  For a monthly fee usually billed to a credit or debit card, insurance can be purchased that covers all appliances, heating and air conditioners, garage door openers, plumbing and electrical.  Very often depending on the cost of the premium, which is usually about $35 to $50 a month, if a service call is needed, there is a deductible that may range from $50 - $100.  

However, after paying the deductible the repair is completed at no additional cost to the insured and or if the the repair would cost more than replacement, the home insurance company generally provides the monies to pay for a replacement.  Naturally, like all insurances there are provisions governing utilization.  For example, heaters and air conditioners should have annual maintenance, which is not covered under the policy and would be a condition for replacement.   

In order to get services, a request for service is usually placed on line, or by calling their 800 number.  Doing it on line is the most efficient way of setting up a service appointment.  In many cases, it may take 2 - 5 days for a service man to come for an appointment unless it is an emergency.  At Paragon Home Resources, we regularly refer our customers to our home repair insurance partner.  Not only is this insurance good for on going repairs, it is often provided by the seller to the buyer for a year of coverage to deal with any repairs that may come up after a sale.  Home Repair Insurance is a good cost effective solution for many people.  

Dealing With Home Owner's Associations

Many developments in the last 30 or more years are governed by Home Owner's Associations.  This is true both in gated communities with private streets, as well as, other tracts with public city or county streets.  Generally, there is a monthly HOA fee to pay for various amenities, which can include pools, tennis, recreation centers and if gated private streets, gate guards and security.  There can even be assessments when needed to pay for big ticket repairs to Association amenities.  Theoretically, HOA's are good for property values; but they do add monthly expense.  All HOA's come with rules and CC & R's, Covenants, Conditions and Restrictions, which govern various activities within the community.

Most important, any work done to the outside of the home often in addition to requiring city and or county approval also requires approval by the HOA Architectural Review Committee.   Whoa with you if you start work before these approvals are provided by all governing authorities.  If you do start work and or complete the job without such approvals, you can be forced to tear it down and or face incredible fines that if not paid could result in the foreclosure of your home.  So, Don't Do It no matter what the time pressures.  Get the approvals first. 

HOA's can be difficult to work with if you don't follow the rules.  If you have a non conformist personality, it is probable best that you not buy a home tied to a HOA.  However, if you don't want a purple house next door to you or are opposed to looking at cars parked on your neighbor's front lawn, HOA's are designed to prevent anything that could diminish property values.  The good news is that areas that have HOA's tend to maintain their property values best and even see more appreciation than areas without them.    

Thinking of Retirement - Start Now

Whether someone retires at 62, 65 or later in life, it is pretty certain that Social Security monthly payments will not be enough to maintain a great life style.  In fact, since Medicare is means tested and many people buy Medigap Policies and or end up paying high deductibles even with Medicare Advantage Plans, a lot of Social Security payments will go to pay for medical expenses one way or another.  So anybody thinking of retirement needs to start long before the day comes when someone decides to call it quits. 

Fortunately, many employers offer 401K savings plans, which allows the employee to make contributions and investments while working that are tax free.  Companies often match some or all of the employee's contribution, but even if the employer provides no match, a 401K is a great way to begin saving for retirement.  Those monies can be accessed with no penalty at 59 1/2.  It is then when these monies come out of the investments that income taxes are paid.  If the employee lives in or moves to a tax free state, state income taxes can be avoided.   

The Senior must begin accessing a percentage of these monies at 70 1/2 because government wants the taxes owed all those years to start going to government.  In the meantime, those investments grow for years without any income tax due, which is terrific advantage.  When retirement does come, arrangements can be made to pull out a monthly amount to fund retirement.  Since many people live to be 90 or more, it is critical that there be enough money in savings one way or another to last a life time.  

If the employer does not offer a 401K, an employee can invest in a private IRA.  There are certain limitations and there are two types.   There is the Roth IRA, which involves monies that have been taxed when earned; but they grow tax free and will incur no income taxes when the monies are taken out at retirement.  And then, there is the regular IRA that functions just like a 401K.  The money goes in pre tax and then is taxed later when taken out of investments in retirement.  In all cases, investing in various mutual funds is the greatest way to spread risk.  

Clearly, Retirement Planning should start at a young age; but for sure no later than 50 years old.  Social Security will not be enough to live comfortably.  Everyone will need far more additional income to live a great life style in retirement.  Unless someone inherits a lot of money, it means saving money one way or another while working over a life time.  

Tight Real Estate Markets Driving Up Prices

People are staying in their existing homes longer.  On average people are keeping their current homes for 13 years as opposed to 8.7 years in 2010.  One in four residents have lived in their current homes for 20 years or more.  There were 1.28 million homes on the market in the US in November, 2020.  This was down 22% from 2019.  On average there is just a 2.3 month supply of inventory for sale across the country.  All of this is driving prices up 15% in 2020 from 2019 to a median price of $310,800 across the country.  Of course, many markets have average home sale prices much, much higher.  

It could be that Covid has caused people to pause downsizing or upsizing as the case may be because of job insecurity with the many lay-off's that have occurred.  People are staying put until the pandemic finally comes to an end, which could be a year or more.  This is causing it to be a seller's market.  This is a great time to sell if moving from a high cost, high tax state to a low cost, low tax state.  It could very well be that in making the move, the end result could be a serious upgrade in housing at a much lower price.

Now that more people are working from home, they can live anywhere.  And, of course many Seniors are moving from cold places to warm places to retire.  With interest rates at record lows, this could be a very good time to move.  At Paragon Home Resources, we assist people in making life decisions.  We can help with selling or buying homes with cash back rewards and the disposition of household goods. as well as, many other services that make moving easy.  There are many things to consider; but in real estate timing is everything.  People need to take a hard look at their situation and take advantage of the trends that exist today.