"Debt free except for mortgage"...

[Dakota731]

My suspicion on the bolded is that seniors are going to have to re-think their living arrangements

Owning a home is even better for senior citizens. Both my mom and mother in law only have to pay taxes ($300 a month) versus senior apartments which run $1200 and over. Since they can’t clean or mow any more they pay people to do that, but that only adds another $200 a month so they still come out way ahead.

 

[ClapYourHands]

Owning a home is even better for senior citizens. Both my mom and mother in law only have to pay taxes ($300 a month) versus senior apartments which run $1200 and over. Since they can’t clean or mow any more they pay people to do that, but that only adds another $200 a month so they still come out way ahead.

I think this can be true, but it depends on the level of care people need and often the layout of their homes. For active seniors who are still mentally and physically fit, living in their own homes with a bi-monthly cleaner and a lawn service is perfect. The problem comes when they start to slow down, or have some kind of accident. Once they can no longer do stairs, are they in a house that allows them to live all on one level? Once they become a bit more forgetful, is there someone who can oversee their medications? Once they can no longer safely drive, is there someone who can bring them places? Many senior housing complexes have their own shuttles.

My parents and in-laws are all in their 70s-80s, and living in their own (paid for) homes, which is ideal at this point. But in the hospital where I work, I have sadly seen many seniors who were okay living at home - until they suddenly weren't, and then it becomes a mad scramble to get them a safe discharge plan.

 

[hsmamato2]

We have also never had a mortgage. I'd rather rent than ever own a home. It's way cheaper.

not in my living area...not by a long shot. It's very difficult to rent around here, and many people find holding a mortgage to be less expensive on a monthly basis. example? an average 2-3 bedroom 1/2 house rental is $16-1700 a month *min* around here. My 3 bedroom home mortgage is 1/2 that cost. So I guess we're not 'debt free' but we're 'foolish debt' or ' unnecessary debt' free..... a place to live is a necessity,and either way (rent or mtg) you have to use a chunk of income to pay for it,hence the idea that one is debt free in such a situation.

 

[crisi]

That's very smart of you. I'm not really as interested in being debt free as having a positive net worth that increases every month.

This is really what financial health comes down to. There will be points in time that your net worth doesn't increase every month (we currently pay college tuition - over the next four years our net worth will go down more often than it goes up), but if the trend line is positive and the dips in net worth are generally for things that are overall beneficial or due to economic factors beyond your control, you are on the right path. If the hole you dig gets deeper every month, you are on the wrong path. There are many ways to make sure that you build a hill to stand on and not a hole to stand in financially over time - and leveraging your assets with debt (like with a mortgage) is one of those tools. However, some of those tools (like leverage) need to be understood to be used effectively - a backhoe can build you a very nice hill to stand on, or it can just make things worse if you don't know what you are doing.

There are times in my life that I've carried - gasp! - consumer debt because it was overall beneficial to keep money invested and wait for cash that was owed to me than to sell investments and take a tax hit.

 

[DLgal]

not in my living area...not by a long shot. It's very difficult to rent around here, and many people find holding a mortgage to be less expensive on a monthly basis. example? an average 2-3 bedroom 1/2 house rental is $16-1700 a month *min* around here. My 3 bedroom home mortgage is 1/2 that cost. So I guess we're not 'debt free' but we're 'foolish debt' or ' unnecessary debt' free..... a place to live is a necessity,and either way (rent or mtg) you have to use a chunk of income to pay for it,hence the idea that one is debt free in such a situation.

To be clear, if we ever moved to a place that was cheaper to own, we'd probably buy a house. However, it hasn't happened yet. Modest sized homes here go for a million dollars. We'd need a $500,000 down payment to have a mortgage cost equal to our current monthly rent. We have exactly $0 for a down payment. It's just not a savings priority.

Renting has always, always been cheaper than buying for us. I sometimes dream of moving somewhere that homes cost less, but then we would be losing all the amazing things about where we live now, that we all love. It's a trade off, but one we are willing to make for the time being. We lived in a giant house for 4 years in an area we absolutely hated (but many people really seem to love). It was dirt cheap to rent ($2200 for a 3500 square foot, 5 bedroom, 3.5 bath, 3 story house). By the end of our time there, we were also sick of living in such a big house with a big yard. We realized it wasn't all that it is cracked up to be. It just wasn't for us.

True story...My sister in L.A. just bought her first home. Her MIL passed away last year and she had a lot of $$$ so my sister's husband inherited a good amount. They had been renting a townhome, for $3100/month. They bought a slightly larger home about a mile away, put down $750,000 , and their mortgage payment is still $200/month more than their rent was. That's just crazy. I'm not so sure buying that house was such a great idea. That $750,000 had been earning over $30,000 per month in interest, due to how it had been invested. They put in over $30,000 in renovations and the home has already fallen in value. This is the reality of the market here and not something I'd get involved with even if we suddenly came into a large amount of money.

 

[DLgal]

There are times in my life that I've carried - gasp! - consumer debt because it was overall beneficial to keep money invested and wait for cash that was owed to me than to sell investments and take a tax hit.

We have always had some sort of consumer debt. However, at the same time, we have NEVER stopped our retirement and college fund savings. Those are non negotiable. Our consumer debt is less than 10% of our net worth. I have always had a high credit score. This has allowed me to take advantage of super low fee 0% balance transfer offers, so I've moved debt around to pay as little as possible in interest to pay it off in chunks. I have never paid the published credit card APR. If I couldnt pay the card off in full each month, I'd transfer the difference using a balance transfer offer. This is how I have always done it. It's been like perpetually having a low interest loan.

We are finally at a point, after my husbands latest promotion, where our monthly income allows us to save a substantial amount and finally eliminate the balance transfer debt once and for all. We are building up our liquid savings for the first time. We have always used our large credit line as our "emergency fund" because we knew our income was guaranteed every 2 weeks. When you know there will be money coming in no matter what, it's not so scary to get into credit card debt.