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How to Use Home Equity in Retirement

coins - potato - home equity in retirement

Do you know what is home equity and how to use it in retirement?

For most of us, our home is more than four walls and a roof. We spend so much time there that no wonder there is a strong emotional connection between you and your home.

That is why it is hard to think about your home as a financial asset. But depending on how much home equity you have built over the years your home might be one of your most useful retirement assets.

For people like me who are close to retirement, the question appears more often than ever whether to sell or keep the family home.

I would love to remain in our house full of memories where we raised our daughter, celebrated holidays with friends, and lived the big portion of our life. The separation would be hard. But besides the emotions, the decision to stay or move could mean financial risk or financial security in retirement.

According to the Federal Reserve Bank of New York, the average 65-year-old has 47 percent more debt today than a 65-year-old had in 2003. And based on recent studies, only 1 in 3 retirees are confident that they have enough money saved for a comfortable retirement.

I read several articles pointing at the gloomy picture of today’s workers to be at risk of having insufficient retirement funds. Outside of 401(k) and IRA plans, Americans saved very little for retirement.

However, there is one bright spot in this picture – home equity.

What is home equity?

Home equity is a portion of your property that you ‘own’.

When you purchased your home, you probably paid only 10 or 20 percent as a down payment and borrowed the rest of the money from the bank. Even you are considered a homeowner, but the bank owns the portion of your home until you pay off the loan.

How home equity works.

Home equity is the market value of your house minus what you owe. For example, the current market value of your house is $550,000, and you have a remaining mortgage of $250,000. Thus, your current home equity is $300,000. This amount of equity in your home belongs to you.

$550,000 – $250,000 = $300,000

During a healthy real estate market, when the prices are rising, your home goes significantly higher in value. So, you will build equity without any efforts on your part.

I always check the market value of our home on a website like Zillow. It helps to see how it appreciated over the years. So, if your home value has grown from $550,000 to $600,000, you will get more equity in your home.

$600,000 – $250,000 = $350,000

You can increase home equity by paying down your mortgage and/ or taking steps to increase market value through home improvement projects. If you like to watch home remodeling shows on the HGTV channel, you can learn the ways to improve the value of your home. However, any of these projects will require extra money to pay for the improvement.

Even though we live in our homes, home equity is considered a financial asset. There are several ways to put that asset to work If you decide to use your home equity.

Here is how to use your home equity in retirement:

Downsize, buy a smaller house or condo, and invest your remaining funds.

small house on mountains - home equity in retirement

We are emotionally connected to our home. Owning a home is like ‘being in a long-term relationship’. But homeownership comes with huge financial responsibilities.

If you are approaching retirement and do not have enough money saved, downsizing will be the easiest way to get access to extra money through your home equity.

After selling your home, you will receive home equity from the sale proceeds. Although, you will not be able to get all the money from your buyer if you still have a mortgage. When you sell a house with a current mortgage, the buyer’s fund will pay off to a lender whatever is remaining on your loan. In addition to that, you will have to pay realtor fees, taxes and spend some money on moving out.

For people who decide to downsize, the capital gain tax exemptions of $500,000 for a married couple and of $250,000 for a single person still works. However, there are certain rules if you want to qualify. Your house should be your primary residence, and you have to live there for two of the five years before the sale.

The important step is to decide how to use the money released from the sale of your home. You can use some of your equity to buy a smaller house or condo.

Moving from a home valued at $500,000 to one that costs $250,000 should give you extra cash. Then you can use the remaining $250,000 ($500,000 – $250,000) to increase your retirement savings or invest them into the stock market to receive an additional income.

Eventually, downsizing should help to save more money and give more financial freedom in your golden years.

Moving from a sprawling 3,500 square feet family home to a 1,000 square feet condo will help to reduce the cost of living. Housing cost is one of the highest retirement expenses. That is why most people choose to downsize because they want to reduce their monthly expenses while living on a fixed retirement income.

Just remember that if you do not have enough money saved for retirement, downsizing will help you to get extra cash to fund your retirement years. But be careful when thinking about how to put to work extra money released from the sale of your home.

Eventually, you will need to choose between 3 options if you decide on downsizing:

Relocate or stay in your town?
Rent or buy?
A single-family home or condo?

Any option you choose, downsizing will help to free up money you can use to improve your retirement lifestyle for years.

Sell your home and move somewhere more affordable.

Another way to use your home equity is to sell your home and relocate to a more affordable place.

Where do you want to live when you retire? Are you living in a home that you cannot afford?

Relocating to a place with a lower cost of living will help to reduce your monthly expenses and stretch your retirement savings. In addition to that, if you live in an expensive town, you can sell your home, buy a much nicer house in a cheaper area, and still have a big chunk of cash to live off.

Sell your home, move out, and live on rent.

Most people prefer to live in their own homes because of feeling safe and independent. There is a long list of pros and cons to both renting and buying. However, there are still many reasons for renting when you retire.

One of the main reasons for you might be to increase your retirement funds. So, if you decide to sell your home and live on rent instead of buying a new condo, you can stretch your retirement savings for longer.

When you are older and an empty nester, you do not need to live in that big house. You need less space, and you want somebody to take care of it. In addition to that, renting instead of buying a new home can significantly increase your retirement savings.

After the sale of your home, you will end up with an extra pot of money that can be invested for an additional income or spent to enhance your lifestyle.

Sell your home and move abroad.

mountains-lake-flamingo - move abroad in retirement

Are you looking forward to setting up a home somewhere new? Life in retirement should be full of new adventures.

Retiring outside of the US is becoming a popular option among many baby boomers. When choosing a retirement destination, it is important to choose a country where the cost of living is low enough so you can stretch your retirement savings.

One of the most important factors to decide is how affordable your new place to live for years.

It is hard to imagine that many baby boomers can afford to retire in Italy or France. These countries are rich in culture, art, history, and food, but they are not cheap.

However, countries like Ecuador, Mexico, Costa Rica, or Panama can offer American retirees’ low cost of living, reliable healthcare, and decent public transportation system.

Moving abroad is not for everyone. But if you are looking for adventure in your golden years, you can live a more pleasant and comfortable lifestyle at half of the cost than retiring in the US.

Stay in your home and take out a reverse mortgage to fund retirement.

Many people would prefer to stay in their homes and retire in place. They want to remain in their neighborhood for life. In this case, a home-ownership might provide several options to fund your retirement without the risk of stock market investments.

One of the options is a reverse mortgage.

‘A reverse mortgage is a loan available to homeowners, 62 years or older that allows them to convert part of the equity in their homes in cash’. In simple words, as an older homeowner, you will be allowed to borrow money against the value of your current home.

Article: Your Guide to Reverse Mortgages

A reverse mortgage is also known as a home equity conversation mortgage (HECM). It provides income to retirees and does not require monthly payments. You still have to pay taxes and home insurance, and you will be responsible for maintenance.

The best part is that you will receive a portion of your home equity in cash without requiring to move out. But the loan has to be repaid when the owner leaves the house. A reverse mortgage can be flexible, and you can take HECM as a line of credit (HELOC), lump sum, or an annuity.

One option is to use HECM for your medical or long-term care expenses late in life when you run out of money. Another option is to set up an annuity to increase Social Security and any other retirement income you will receive.

Reverse mortgages can be complicated. There are many terms and conditions, and it is a relatively expensive way to borrow money. So, make sure to do your research to understand all the pros and cons, and talk to a loan specialist.

Article: Retirees Should Consider Reverse Mortgages

Putting It All Together

Over the years, your home was providing a safe haven for living your life. But it also has become your largest financial asset that increased in value.

If you are getting closer to retirement, you need to plan how to maximize every asset you have. Since the fear of running out of money in retirement is still present among many retirees. Your home can give you a huge financial advantage, especially, if you have built up significant home equity.

When you retire, that money can be converted into retirement income, cash for everyday expenses and hobbies, or financial leverage for long-term care. Explore the ways you might want to use your home equity in retirement.

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Disclosure: This information is only educational. This post intends to provide a simple guideline for an extremely complicated matter. I am not providing any specific financial advice or recommendations to any of my readers.

How to Create Retirement Lifestyle Goals

by Maggie Leave a Comment

type writer - coffee- create retirement lifestyle goals

Have you ever thought about what your retirement lifestyle would be like? How are you going to spend your days and weeks? Have you thought about creating your retirement lifestyle goals?

With retirement approaching, I have a wonderful vision of my new life. Sleeping late. Taking time to go through the day. Enjoying my morning coffee on the deck or just being lazy.

However, after years of a structured life and busy schedules, it will be hard to deal with endless hours. Going from working a full-time job to having no specific plans for each day might be exciting or depressing.

The lifestyles of today’s retirees are so different from the lifestyle of our parents. Today’s retirees are so active. They travel, volunteer, work part-time, play sports, or start new businesses. They like to spend time with family and friends and learn new technology or skills.

Most future retirees think about financial goals of retirement – “Can I afford to retire?” “How much money do I need to have a secure retirement?” While financial security is important, it is only a small part of what it means to have a happy retirement.

If you are in your 50s or 60s, planning your retirement lifestyle is a smart idea. Look at your retirement as a perfect opportunity for new creations and new adventures because it can be the best time of your life.

Begin the planning process by creating your retirement lifestyle goals. You have been creating goals to achieve things throughout your life and planning a retirement lifestyle is no different. After all, having a goal means you know where you are going and what it takes to get there.

Here are some tips for helping you to plan your future lifestyle:

Envision your retirement lifestyle.

How do you envision your retirement? The point of answering this question is to define what will be important in your new life.

The minute you say goodbye to your coworkers your full retirement starts. What is next for you? You need to figure out what you would like to do for the next 20 or 30 years of your life.

Take a couple of minutes to ask yourself:

How will my life change when I retire?
What will I do with my time?
What do I like to do?
Who will I spend my time with?

Start by setting up big picture goals. What kind of things you would like to do when you retire. First, take a piece of paper and create all the goals you like even you are not sure you can afford them.

Then, group the goals between Wants (what you would like to have) and Wishes (what you wish or dream to have). Call it your retirement to-do list or bucket list.

Here are a few ideas of retirement lifestyle goals:

Travel – What are your travel goals? Do you want to travel every year? Or do you want to make one special trip? Where do you want to travel? Do you have a travel fund? Have you set up your travel budget?

Celebration – Celebrating a special event can make a great goal. What special events do you look forward to celebrating? A family reunion, an anniversary, or a retirement party? Or maybe your daughter or son’s wedding coming up and you want to help to organize and pay for the wedding.

Downsizing – Moving out of your big house into a small rental apartment or condo can be a big lifestyle changing event. It will require a lot of planning such as selling the house, reorganizing your belongings, downsizing your vehicles, finding a new place to live, etc.

Home improvement – Do you plan to continue living in your home for a long time? Do you have big plans to renovate your “old house” to be your dream home or to be more age-friendly?

Vacation home – It is a dream for many people to have a vacation home. Maybe now it is a good time for that vacation home you always wanted. Make it a retirement lifestyle goal and make it come true.

A sailboat, or a luxury car – Do you always wanted to have a sailboat or to drive a luxury car? Then go for it. Make it a lifestyle goal and be happy that you will be driving what you want.

Start a new business or new hobby – If you want to start a new business or develop a new hobby make it a goal and make it happened.

Health habits – Creating new health routines can make an excellent retirement lifestyle goal. Initially, you can start by going to the gym every morning and establishing better sleep routines. Next, you might decide to stop eating processed food, take cooking classes, and learn how to cook at home.

Social network – The professional network you built before retirement is not going to satisfy your social needs in retirement. When you stop working it will be hard to keep in touch with many of your colleagues. They will move on with their lives at work and you will move with your new retirement life. Make it a retirement lifestyle goal to develop new relationships and create your social network.

Volunteer – Many people plan to do some form of volunteering after they retire. Volunteering is a great way to make new friends, enjoy time with like-minded people and simply get out of the house.

Transform your big goals into small steps.

While we are working, we are accustomed to reaching the goals set by others. In retirement, we need to learn how to create the goals relating only to ourselves.

When you set a clear goal, it helps to get a sense of direction.

I like to write down my goals on a piece of paper. In the beginning, my goals come out as wishes. I would write on paper “I would like to write a book”. But then a few weeks later the wish becomes a goal, and I would put it on my agenda. Then I start taking small steps in that direction and slowly my wish becomes a well-designed plan.

If your big goal is to lose weight, start by breaking it into small steps. In the beginning, you can plan on walking 3 times a week. Then slowly you begin jogging 3 times a week. Next, you would look at your eating habits and maybe decide on cooking homemade meals or go vegan for a month.

Creating retirement lifestyle goals will help to transform your wishes into action plans.

Regardless of the goal, the results of this simple process can be powerful. It will help to clarify your direction, provide a feeling of control, and give you a sense of accomplishment.

Structure your days.

Recently I read several articles pointing out that you need to learn how to live slowly in retirement. The idea behind this approach is to enjoy every day instead of ticking things off your to-do list.

Take your time and think about what you want to accomplish by the end of the year. What do you want to do during the summer? And maybe what are your plans for the winter?

You can plan to learn many things – how to sew, how to restore furniture, how to bake, or cook a few new recipes. You can organize a get together event or a trip to visit friends next summer.

The key is to have an overall plan and then break it into smaller steps. Having a couple of things set in each category will help to manage your time.

Have a sense of accomplishment.

a woman jumping over hills - creating lifestyle goals

I have started blogging in 2019. My first post was published on January 17^th. I still remember this date clearly because it was a very important moment in my life. The idea of blogging came up as a wish instead of writing a book. I decided to do a little bit of research on this topic. Then after a year of researching, I found myself with a new blog and multiple social media accounts.

I have to admit I struggled to manage a full-time job and blogging as my new side hustle. Being a non-native English speaker adds to this challenge.

The technical part of blogging is the hardest one. I spent hours trying to set up my website and making it work. In addition to writing and editing blog posts, I have to deal with email marketing, sign-up forms, plug-ins, images, website maintenance, and more.

But I am not planning to stop blogging any time soon!

Every day I try to do better with time management. It gets easier with a routine. Once I break down the bigger goal into smaller pieces, it feels more achievable. And each time one of those steps got accomplished I can pat myself on the back.

Final Thoughts

With a little planning, your retirement lifestyle can be exactly what you imagine. Make your retirement years the best time of your life.

You can create your own active and happy retirement without a million dollars saved in your retirement funds. Retirement is not just about financial planning. It is about your time and how you spend it.

Have you ever thought about your retirement lifestyle goals? How can you break down those goals into manageable steps?

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15 Ideas on What to Do When You Are Retired

by Maggie 4 Comments

a woman reading a book -what to do in retirement

I believe we all are excited about retirement. But have you asked yourself about what to do when you are finally retired.

We spend our lives doing things that we have to do. We go to school, we work and build our careers, we raise kids and take care of our families. We stay busy all the time. After working for three or four decades we are ready for a new life. A new life without early alarms, long commute, meetings, and stress of deadlines. Can you believe it?

When we reach our retirement, we are ready to embrace it as a new phase of life with limitless possibilities and a lot of free time. Although, we do not want to feel bored because we have nothing else to do each day and started to feel useless and lost.

Retirement is a new phase of life and if you want to enjoy this time you need to prepare for it. There are so many things you can do in retirement.

Here is a list of my 15 favorite ideas on what to do when you are retired:

1. Create a retirement bucket list.

I believe it is important to create a retirement bucket list. The bucket list will help you to see what you want to do with your life. It will keep you motivated and helps to set the goals.

Write down a list of things you always wanted to do but never could because you did not have time, energy, money, or something else.

A few ideas from my retirement bucket list:

Live in France for a year
Learn the French language
Live in Italy for a year
Write an e-book
Take dance lessons and learn how to dance salsa
Take cooking classes
Grow a vegetable garden
Design and build a lake house

2. Travel the world.

a canal in city of Venice- 15 ideas on what to do in retirement

I have a passion for travel. Traveling the world in retirement is the number one goal on my retirement bucket list. Roman and I always plan for one or two big trips a year. We like to visit different countries and enjoy the uniqueness. Our main goal is to explore countries rich in history, art, and architecture. Also, we like to try different kinds of food and take cooking classes together.

When we retire, we would like to travel as much as we can afford it depending on our budget. I believe that seeing beautiful destinations and experiencing other cultures will make our time in retirement more memorable.

3. Visit family and friends.

When you are retired, you have so much time on your hands. That is why it is a good idea to take advantage of visiting family and friends. Spending time with your family and visiting loved ones has huge benefits. It will help everyone to stay connected and keep you emotionally happy. It could be a lot of fun and bring back positive memories.

In addition, the get-together visits will help to create new experiences and memories for the future. It could be a joyful and memorable party, a small group stroll in the park, or simply a get-together family for food and games.

4. Spend more time with grandchildren.

Being a grandparent is one of our life’s greatest joy. That is why spending more time with grandkids is a great thing to do in retirement. If you live close to your grandkids you can have an important role in their lives by babysitting them more often. Also, you will help your children to save a lot of money on daycare.

When your children and grandchildren live far away, you can organize a family vacation together or try to visit them more often. You can call, or schedule some time on Skype, FaceTime, or Zoom to talk to them. Yes, seeing your grandkids on a computer screen or phone is not the same as snuggling with them or hugging. But you can enjoy your time together by seeing one another in real-time instead of just calling them.

5. Become a volunteer.

Many retirees get engaged in volunteering and found it meaningful and rewarding. Volunteering is a great way to stay busy and engaged socially with other people. There are so many ways to help others from mentoring children to assisting at the hospital or a local library. There are countless opportunities out there if you want to follow this route.

Think about what you would like to do and which organizations you would like to help. Then contact them and offer your help.

Check out volunteer jobs at the following websites:

6. Apply for a part-time job.

You are retired from work so, why would you want to apply for a part-time job. But according to the studies, 55 percent of American workers plan to continue working in retirement with 41 percent going part-time.

The reasons for working in retirement might be different. Some people will want the additional income. Sometimes having a little extra cash in your pocket help to pay for a family vacation or buy something you normally would not.

Others need to work because they cannot afford retirement. But many retirees who apply for a part-time job find the advantage of staying active and keeping their brain sharp. People enjoy working part-time because it gives them a sense of purpose and helps to stay socially connected.

15 Part-Time Jobs for Retirees

7. Find a new hobby.

When you are retired you want to spend your time doing things you love. To find out what you always wanted to do, ask yourself what I am good at and what I wanted to do.

You can use a piece of paper and pen or a Note app on your phone to write down your favorite things to do. I keep a list of things I love to do on my phone and add to it whenever a new idea pops into my head.

Here is a list of popular hobbies:

Gardening
Painting
Playing the piano or other musical instruments
Singing
Sewing
Knitting
Reading
Writing
Photography
Cooking
Woodworking
Restoring cars
Remodeling
Redecorating
Restoring furniture.

8. Remodel your home to be more retirement friendly.

It is not a secret that most of us have a deep emotional connection to our home. Whether you want to relocate to another state or retire-in-place you would want to make your home more retirement friendly. There are many ways to remodel your home. It could be a small or big project.

The most popular renovation projects recommended for retirees:

A first-floor bedroom – a great solution because climbing the stairs in the years ahead might make it difficult.

An easy entrance to home – make sure you have at least one exterior door with a flat entry rather than steps.

Bathroom remodeling – install grab bars in the shower and bathtub to be an age-friendly space. Other suggestions: install a higher toilet (19 inches high) for future balance issues; install a no-threshold shower, so you will not trip over the edge.

Kitchen remodeling – place a microwave on a counter, install a pullout pantry, lower the kitchen counters with easy access to kitchen utensils.

Eventually, you will need to get rid of the scatter rugs around the house and install a wood floor or wall to wall carpet to eliminate the hazard of tripping over them when you grow older.

Install brighter lighting for better visibility.

9. Grow a vegetable garden.

man sitting in his garden-ideas on what to do in retirement

I am not big on gardening, but I always admire a beautiful garden designed by other people. Hobbies are important to all of us, whatever age we are.

Gardening is one of the most popular hobbies in retirement. It helps you to relax, spend more time outside, stay active, and fit. Growing a vegetable garden can be your new passion and a healthy habit of eating fresh vegetables.

You can grow fruits, vegetables, and herbs. Also, you can grow cut flowers for the house. Use your imagination and design your vegetable garden to be practical, as well as interesting and inspiring. Think ahead of time which new plans to grow next year and order seeds for future sowing.

Growing your vegetables can bring enjoyment into your retirement life. You can create it as a space to entertain your friends, have a garden party, or just a place to enjoy your hobby.

10. Go back to school or take a class.

If you always wanted to learn something new, retirement is a perfect time to go back to school. Taking a class is a good way to stay mentally and socially active. When you are learning new things, you find a way to improve yourself. And we all know that “you are never too old to learn something new”.

You do not need to take purely academic or career-oriented classes. Sometimes, engaging in a cooking class, learning how to play a violin or guitar will help you to find your hidden talents.

Here are a few class’s ideas:

Writing
Art
Architecture
Interior Design
Creative writing
Pottery
Painting
Music
Cooking

11. Start cooking and host a party.

a table with dishes - cooking as a retirement hobby - 15 ideas on what to do when you are retired

Cooking is a great hobby in retirement for many reasons. Learning the basics of cooking will help to eat healthy. Also, cooking at home is more economical than eating out.

Getting started with cooking is not as difficult as every one of us has a kitchen at home. Do not worry if your kitchen is not equipped with expensive equipment, you can add it later or just use your creativity and cook with what you already have.

Most people know the basics of cooking. I love to cook. My father was an excellent cook and my sister and I learned the basics of cooking from him.

If you want to make it as a hobby you can learn from books like many people. There are videos of recipes to try, cooking channels on TV to watch and learn. Most cookbooks come with basic tips and techniques so you can learn fast.

There is a joy of cooking for friends and family. Hosting dinner or a cooking party can be a great way to get everyone involved and have fun.

How to Host a Dinner Party

12. Write a book.

For many people writing is a passion. It has become popular with people of all ages. If you like to write, then writing and self-publishing can be your favorite activity or part-time job during retirement. You can simply write for pleasure or a side income. However, selling books requires a lot of work including writing, editing, and self-publishing.

If you have good writing skills and some knowledge about content marketing, you can become a freelance writer and write articles instead of books.

Another popular way is to start a blog and write, publish, and promote your books, articles, or e-books through your website.

If you feel that writing books when you retire is your best option, then go for it! The best part is the flexibility. You can start slow, learn, restart again, and increase at any time.

How to Publish a Book in 2020

13. Join a gym or exercise daily.

Joining a gym or exercising daily will help you to stay healthy and hold off the diseases that come with old age and sitting too long in front of the TV.

Walking, exercising, running, going to the gym, taking yoga classes are all popular ways to stay fit in retirement.

Another way to stay fit and have fun is to participate in whatever sports you like. Hiking, swimming, running, fishing, canoeing, kayaking will help you to keep up with an exercise routine and stay healthy for many years.

14. Start a club.

Another thing you can do in retirement is to start a club. It could be a retirement club, a reading club, a walking club, a gardening club, etc. Talk to your friends and neighbors if it will be enough interest in whatever topic you choose. Get the word out and put flyers on the bulletin boards or even create your own website.

After that, schedule and arrange a meeting to see who might be willing to help you organize and manage the group going forward. By starting a club or special interest group you will make new friends and help others come together, share a common interest, and have fun.

How to Start a Club

15. Start a new business.

You do not want to be bored when you retire. That is why you might want to start a new business to occupy your time and share knowledge with others.

In today’s technology age you do not have to invest a lot of money to become an entrepreneur. There are so many online opportunities to earn money from the comfort of your home. Starting a new online business can be a great way to fill your day and earn extra money.

5 Great Home Business Ideas for Retirees

Final Thoughts

Retirement is a new phase of life. And if you want to enjoy this time you need to prepare for it. We all start saving money and preparing financially for our retirement years. Having finances in order is important for a comfortable retirement.

However, thinking about what you are going to do when you are retired is equally important for a happy retirement.

Have you thought about what you want to do when you are retired? Please share your thoughts in the comments below.

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Our Getaway Weekend in Provincetown

by Maggie Leave a Comment

Old house with a garden - getaway weekend in Provincetown, MA — A beautiful old house with a garden in P-town

We love Provincetown (called P-town by locals) and visited this place on a few occasions. Instead of spending a week, we had only a getaway weekend due to the coronavirus pandemic. This summer on the Cape Cod was different. A lot of events and activities were canceled, and the towns were significantly less crowded than normal for the summer season.

Provincetown is a beautiful year-round and one of the most popular vacation destinations in New England.

It is located on the very tip of the Cape Cod and approximately 2.5 hours’ drive from Boston. But it will take longer to get there if you hit the road on Saturday afternoon instead of early morning. In high season, driving on Route 6 can be a traffic nightmare, but we were lucky, and the traffic was light. I think the coronavirus pandemic changed everyone’s lifestyle and how often people want to travel.

I love this small town. It has a unique blend of an old-fashioned fishing village and hip artsy community. When you walk around the town you can see its narrow streets are lined with charming old homes and little gardens around them. You will never be bored here because there is so much to do.

The National Historical Society has selected Provincetown as one of the top 12 historic places in the country.

The P-town has a big LGBTQ community and they have many parades and celebrations during the summer. But in the last two weeks of August, you will find mostly families with young kids, couples, and a group of friends walking Commercial Street.

In my opinion, there are 3 things to do in P-town if you are only heading there for a getaway weekend:

Visit the beaches
Shop and dine on Commercial Street
Take a scenic drive

ocean beach with harbor and sailing boats - getaway weekend in Provincetown, MA — Provincetown Harbor

This is how we spent our getaway weekend in Provincetown on the Cape:

Day 1. Stroll Commercial Street

We were not yet hungry for dinner, so we started our slow walk towards Commercial Street. As we strolled, we found ourselves in the Gallery District where many artists live and create. We popped in a couple of them and were delighted to see the quality of artwork displayed. Most of the artist’s inspiration comes from the timeless New England scenery – lighthouses, sailboats, dunes, and beaches.

Commercial Street is the main shopping street in town and full of quirky shops, unique art galleries, great restaurants, and cafes. It is considered one of the most vibrant and bustling streets, and you do not want to miss it.

people walking along street - getaway weekend in Provincetown — Commercial Street in P-town

We arrived and checked into the Eastwood timeshare resort. The resort is located at the edge of the town and a long walk to Commercial Street where all activities happen every night. The complex is old and dated, but space was more than sufficient for the getaway weekend. The receptionist pointed us to a short strip of a beach located 5 minutes’ walk from the resort. We checked it out but did not like it because the beach was covered with a thick layer of seaweeds.

There are plenty of touristy shops filled with T-shirts, beachwear, jewelry, glassware, and more. If you want to bring home some items to remind you of time spent in Provincetown stop at one of many souvenir shops for lobsters, seashells, starfish, or lighthouses.

Provincetown Harbor is another place to visit and just a short walk from Commercial Street. I like this place because it has great views of the ocean and the Pilgrim Monument. There is a mat leading down to the ocean for visitors who do not want to walk on the sand.

We did not climb the Pilgrim Monument because I was tired after our long drive to the Cape Cod through Boston on Saturday afternoon. But we came closer and took a few pictures. The Pilgrim Monument is a 252-foot tower in the center of P-town with 116 steps. It was built in 1907 to commemorate the arrival of the Mayflower in 1692. Thus, Provincetown was the Pilgrim’s first landing in the New World.

Pilgrim Monument in P-town. The view from the harbor

Day 2. Beach time

We like to spend time on the beach and P-town is well known for its long and sandy beaches. On day 2 we drove to the Herring Cove Beach in the morning. It took us less than 20 minutes to drive to this beach from our place. The parking there is $25.

There are two parking areas to the beach: one is on the right and another one is on the left. The one on the left looked larger. But we choose to park our car on the right because it was closer to the beach and ocean. The beach has several facilities such as restrooms, showers, and a vending machine stand. However, I did not see any lifeguards on duty.

The Herring Cove Beach is part of the National Seashore and it was named one of the America’s best All-Time Beaches by the courtesy of the Travel Channel. The sunsets are stunning here. This beach is the most popular in Provincetown because it lies on the bay, so the water is calm and warm.

And we were not disappointed. It was a perfect sunny day for sun tanning and swimming. We wore masks as we walked to the beach where you might be close to other people. But once on the beach, it was not hard to maintain at least 6 feet distance. Most of the beach-goers were thoughtful about social distancing.

Walking and swimming are my two favorite activities while staying on the beach. But I like to read a good book as well. The temperature was in the low 80’s and the sun was out. The water was calm and clear so you can see the fish swimming around you. We did not see any sharks even there were warning on the news. We relaxed and soaked up the last days of summer. I would say it was a perfect beach day.

Visit the beaches:

Herring Cove Beach
Race Point Beach

Day 3. Scenic drive

sand dunes around Provincetown — Sand dunes around P-town

While Provincetown is known for its vibrant downtown and artistic community, there are also amazing natural landscapes to explore. A great way to do that is to rent a bike at one of the rental bike shops. We did not rent a bike, but we saw people biking everywhere. There are tons of bike paths that take you through the pine forests, sandy dunes, ocean, and cranberry bogs. If you rent a bike it is easy to get to two popular beaches – Race Point Beach and Herring Cove Beach.

As I mentioned above, we did not rent a bike, because we decided to drive around to fully experience the beauty of this area. We took a relaxing ride along the spectacular Atlantic coast looking at the beautiful sand dunes of the Cape Cod. We found plenty of spots where you can pull over and take scenic photos.

Taking a guided Dune Tour is another way to experience the natural beauty of the Cape Cod National Seashore. It is considered one of the oldest attractions in Provincetown. The company Arts Dune Tours is family owned and operated since 1946. We took one of the daily tours a few years back and really liked it. Some of the dunes are 100-feet tall and simply gorgeous. We had a view of the legendary dune shacks where artists still go for inspiration and meditation.

Arts Dune Tours

Places to eat:

This summer, restaurants and cafes around Provincetown have adopted social distancing guidelines. I have noticed that some have expanded their outdoor area to provide additional seating, others adjusted their indoor seating to ensure the safety of their clients.

On the first night we had dinner at the Lobster Pot. We decided to go there because the reviews were great. However, the restaurant does not take dinner reservations only walk-ins. It was a Saturday night, so we put our names on the waiting list and walked around a one-and-a-half-hour before they texted us that our table is ready. You have to wear a mask walking inside the restaurant, but once seated at your table you do not need it.

I did not really like the ambiance of the place, but we were lucky to get a table on the upper floor outdoor terrace and the view to the harbor was spectacular. We did not order any appetizers and started with a few drinks. Then, I ordered the Portuguese fish from the dinner menu and Roman had the grilled halibut. The food was delicious.

321 Commercial Street, phone: 508-487-0842

a plate with seafood — Portuguese Fish at Lobster Pot – linguica crusted cod stuffed with sauteed onions, celery and crackers, blended with shrimp, scallops and crabmeat, and baked in tomatoes and onions – delicious!

On Sunday evening many restaurants we wanted to go were closed. We stopped at the Squealing Pig restaurant which had decent food reviews, but I did not feel covid safe to eat there. Then, we walked across the street to the Patio American Grill & Cocktail Bar and they found a table for us on the patio.

The place looked stylish with comfortable cushioned bench seating. There is a plexiglass barrier between tables to keep customers safe during the pandemic. The restaurant is perfectly located on the Commercial street in downtown and a great spot for people-watching. You feel like you are in the middle of the action. The service was good and fast, but they limit your time being there. We were warned that we have only an hour-and-a-half to stay at the restaurant.

I had one of the popular hand-crafted cocktails and Roman had one draft beer. My black raspberry mojito was refreshing, and oysters were plump and fresh. We tried the linguini carbonara with lobster and streak frites au poivre. Everything was tasty.

328 Commercial Street, phone: 508-487-4003

More places to eat:

The Mews – a very popular beachfront restaurant with a cozy upstairs lounge, bar, and coffee shop. Unfortunately, the restaurant is closed on Sunday and Monday.

429 Commercial Street, phone: 508-487-1500

The Canteen – great location, the amazing view of downtown, good food reviews.

225 Commercial Street, phone: 508-487-3800

Strangers & Saints – this restaurant looks unique with the charming gardens around the old but tastefully renovated house. We did not call in advance for the reservation and the place was full when we walked in. We will try to visit this place next time because it has great food reviews.

404 Commercial Street, phone: 508-487-1449

More places to visit:

Explore the Provincetown Museum.

Watch a sunset at gorgeous Race Point Beach and take photos of a lighthouse.

Hike or bike the Beech Forest Trail.

Go on a whale watching tour with Seasalt Charters.

Go on the sailboat tour with Dog Gone Sailing Charters.

Saying goodbye to P-town

Our getaway weekend in P-town came to an end. It was time to leave this unique and charming Cape Cod town. We did not want to leave before grabbing some delicious pastries from the Portuguese Bakery on Commercial Street. Then, we took Route 6 and drove home, back to reality.

Are You Financially Prepared to Retire?

by Maggie 4 Comments

middle age couple - financially ready to retire

You are getting close to your retirement age. But do you know if you are financially prepared to retire?

Retirement is a big step and it will be hard to reverse a decision. Not everybody wants to retire. Many people who are old enough are not ready to retire. But according to the surveys, there are a significant number of people who feel they retired too early and were not fully prepared for that step.

Most people dream of having a great time when they stop working. They dream about having a nice place to live, exciting travels, and leisure time spent with a family. But it all costs money. Not to mention ordinary bills for food, transportation, utilities, medical insurance, and taxes that must be paid every month. It is hard to do things or even live comfortably if you do not have enough money saved for retirement.

Following this checklist should help you being financially prepared for retirement:

Get a clear picture of your retirement lifestyle.

What do you want to do when you retire?

It is important to have a clear picture of how you want to spend your time in retirement. Ask yourself:

Do I like to travel? If you are like me and dream about traveling in retirement, you need to know where and how much it will cost.

Do I have a list of activities or hobbies I want to start? Does it require you to buy new equipment or to have an additional space? Will I need internet and cable in my day-to-day life?

How are you planning to fill in your days?

There are a few questions to ask yourself:

Do I want to spend more time with my grandchildren?

Do I want to volunteer for a local organization or take a part-time job?

Do I want to join a club or start attending classes at a local college?

What is my passion? Cooking? Gardening? Maybe I will cook homemade meals and invite friends instead of eating out.

Where do you want to live when you retire?

Are you planning to retire in place or relocate? If you want to relocate have you made a list of your priorities:

Retirement community?
Proximity to the beach? Or near the mountains?
A small town? Or a big city?
Close to children and grandchildren?
Medical facilities?

Have you researched places you want to relocate? Or have you visited these places? Do you know how much will it cost to relocate? Housing will be the most expensive category of your retirement budget.

If you want to retire in place, ask yourself:

Will my home be paid off? Or will I have a mortgage to carry into retirement?
Do I want to have a few small projects upgrading my home? Or one big home renovation?
Is downsizing an option? Is it time to consider something smaller and easier to maintain?

Calculate financial needs to support your retirement lifestyle.

The first step to being financially prepared for retirement is to determine how much money you need to afford your dream lifestyle. Once you have a picture of your retirement lifestyle you can get a sense of how much money you need each month to pay for this life. The number should include your daily living expenses and the money you want to spend on hobbies and activities.

You should have enough saved to live on 80 percent of your annual pre-retirement income. This number is a good rule of thumb if you do not plan on making any major budget changes when retire. However, not all retirees spend less in retirement.

The best advice is to create an estimated retirement budget based on your current and future expenses. You might have a general idea of what you spend now. But you will be better prepared financially for retirement if you have a clear picture of your expenses now and how that might change in the future.

When you retire you do not need a lot of things that you did when you were working. The costs of commute, take-out lunches, and business clothes will go down. But you will start spending more money on travel, hobbies, and activities. And maybe your medical expenses will increase with time.

It is important to include big-ticket expenses into retirement budget as well. Sending a grandchild to a college or paying for a wedding. Buying a new car or a lake house with a boat will require a significant amount of money withdrawn from your retirement funds.

Get a clear picture of your retirement income.

When you are working you probably have a single employer and a single source of income – your salary. In retirement, everyone has different sources of income.

As a retiree, you receive income from multiple sources:

There are several sources of guaranteed income:

Social Security
Pension
Annuity – a guaranteed income you must purchase yourself

Other sources of income:

Part-time job
Rental income
Business
Dividends

Sources of income from your investments and savings (your nest egg):

Tax-deferred accounts – 401(k), IRA
Tax-free – Roth IRA, Roth 401(k)
Taxable investment accounts
Taxable bank checking and savings accounts

While working, you receive a paycheck regularly – probably every two weeks. When you retire, you might receive income monthly, quarterly, annually, and even irregularly. Getting a clear picture of your retirement income should help to make sure that you have enough money to cover all your living expenses.

Develop your withdrawal strategy.

Do you know how much income you can pull from your nest egg?

If you want to be financially ready for retirement you need to have an income plan or your withdrawal strategy. An income plan is a strategy for withdrawing money from your retirement accounts.

A good starting point for many retirees will be a well-known rule of thumb – the “4% rule”. The 4% retirement rule refers to your withdrawal rate. If you have a well-balanced retirement portfolio (60% stocks and 40% bonds), you can withdraw 4% of your account balance.

For example, if you have $500,000 saved in retirement funds you can withdraw 4% of that amount – $20,000 in the first year of your retirement. You can adjust that number every year for inflation but following this rule should help not to run out of money for at least 30 years.

Though, you have to be aware that this rule of thumb is not perfect. When I have researched the “4% rule” it has shown all kinds of pros and cons.

There are a few problems associated with following this rule:

Return risk – the risk of earning lower returns than it was in the past.
Longevity risk – the risk of living a long time and running out of money at the end of your life.
Series of return risks – the risk of a market downturn during your early withdrawal phase.

Even it is not perfect, the 4% rule is a good starting point you can adjust with time.

Pay off debt.

Paying off debt, no matter how much you owe, is a key to a stress-free retirement. Getting into retirement with any kind of debt will put a burden on your lifestyle. I am sure you will be irritated knowing that you need to make a credit card payment every month with your retirement savings. The best advice is to pay off all your debts before you retire including a mortgage.

Your mortgage payment will be the largest and most consistent expense in retirement. When you live on a fixed income you need to have a plan on how to handle these payments.

Check how many more years of payments you have on your loan and try to pay it off before you stop working. Maybe you can use some savings to pay off the home loan. However, if you cannot pay it off in full, consider downsizing and selling your home.

Some retirees have enough money saved to afford mortgage payments and to enjoy their life in full. But if you have limited retirement funds you will be better off without a burden of a home loan.

While paying off debt including a home loan might not be realistic for everyone, the less debt you have the better you prepared financially for retirement.

Determine how to cover medical expenses.

You will become eligible for Medicare at the age of 65. If you plan to retire before age 65 you will need to find a separate plan to cover your medical expenses.

When you stop working, your health insurance provided by your employer ends. Even if your current employer promise to cover your health insurance in retirement does not mean they will not change their mind in the future or reduce coverage significantly.

Thus, you will need to find and buy your health insurance coverage. Individual health insurance is expensive and could cost more than $1,000 a month. Make sure to shop around for the best prices.

Even being eligible for Medicare brings its own set of challenges because it does not cover all medical expenses. Medicare does not cover premiums, deductibles, co-pays for doctor visits, dental and vision care, long term care, personal care, and other expenses. This means you need to include healthcare costs in your retirement budget.

Article from Retire Guide: Health Savings Account as an Investment Strategy

Remember about tax strategies.

In retirement, we still need to pay taxes, but not all sources of income are taxed the same. Withdrawals from tax-deferred accounts such as 401(k) plans and traditional IRAs will be taxed as an ordinary income.

Withdrawals from Roth IRAs and Roth 401(k) plans will be tax-free. If you want to withdraw money from taxable investment accounts, you will have to pay capital gains taxes.

In addition to taxes, you need to remember about required minimum distributions (RMD). You will face this requirement when you reach the age of 72. By the US tax law, you are required to start taking withdrawals from your retirement accounts such as 401(k) and IRA (excluding Roth IRAs). The amount you must withdraw will be determined by the IRS. If you have more than one retirement account, you can withdraw money from each account or total RMD from just one account.

For example, you have several IRA accounts. First, you need to calculate the RMD for each IRA separately each year. Next, you can sum up your RMD amounts for all your IRAs and then withdraw the total from one IRA. You do not have to take a separate RMD from each IRA account.

It is important to remember that your RMD withdrawals might push you into a higher tax bracket.

Think about what tax strategies will work for you the best. If it makes more sense you can roll your assets into Roth IRA before you reach RMD age. Another option is to start taking withdrawals from your retirement accounts before RMD kicks in so you would not face the sudden jump in taxes.

Putting It All Together

Getting closer to retirement can be both exciting and stressful. But if you want to have a happy and comfortable retirement you need to take time to understand your retirement picture.

You do not want to be one of those people who want to retire, but when that day finally arrives, they just let it happen. You want to be smart and invest time in planning and preparing for a big day. Before you take the plunge make sure that you are financially ready!

If you do it right it might be the best time of your life!

Are you financially ready to retire? Please share your thoughts in the comments below.

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Disclosure: This information is only educational. The intent if this post is to provide a simple guideline for an extremely complicated matter. I am not providing any specific financial advice or recommendations to any of my readers.