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Sunday, February 8, 2004
Nearly there

Picking the right locale for later years

By Katrina Brown Hunt
Special to The Seattle Times

When she was nearing 65, Donna Cole decided it was time to shift gears, and she bought a duplex in quiet Silverdale, Kitsap County, where she could retire.

Eight years later, she hasn't retired, but she does plan to move again.

The 73-year-old divorcee and mother of eight realized she didn't want to quit her job at the music department of the Greenwood Fred Meyer. "I'm the one there who knows all about rap."

Info on Senior Real Estate Specialist agents:
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So she's selling the Silverdale home and moving back nearer the city, to a duplex in Bothell, near three of her daughters.

Craig and Dorothy McGee also sought to move "closer in." The McGees — he was a claim manager for Pemco, she a third-grade teacher — had lived in Montlake for 35 years. But in 2000 they were drawn to a condo in Queen Anne, closer to downtown's theaters and the bus lines.

While they're retired, Dorothy volunteers as an advocate for foster children, and Craig is involved in the creation of a small park in Queen Anne.

Says Dorothy: "We felt the need to (move) while we still had the muscle and power to get relocated."

Where to retire?

To brainstorm locales, try, which helps you compare everything from weather to culture to cost of living. This abbreviated chart compares Seattle with Tucson, Ariz. To maintain a standard of living that costs $50,000 in Seattle would cost $38,134 in Tucson, where it's 23.7% cheaper to live.

Cost-of-Living Indexes Seattle Tucson, AZ
Overall 100 = national average 130.2 99.3
Housing 184.0 96.0
Food and groceries 108.0 106.4
Transportation 104.0 95.2
Utilities 75.0 120.8
Health 130.0 98.1
Miscellaneous 110.0 94.9

Buying a home early

While Cole and the McGees chose new homes at retirement age, plenty of future retirees are locking in homes for retirement now, tempted by low interest rates.

"Anyone from 40 to 45 on is thinking about retirement these days, even if the house they're buying now is the house they can sell later to then buy a retirement home," says Laura Brodniak, a Kirkland-based Windermere Realtor who specializes in working with retirees.

That was the thinking for Michael Miller, president of Bellevue financial-planning firm Capital Planning Corp. Five years ago, Miller bought a town house in Whistler, B.C., which he says has almost tripled in value since. Only 44 now, Miller isn't sure he will actually retire there, but meanwhile he is using it as both a vacation spot and a rental.

"Until I can get there, it's an investment," he says. "If you wait, you'll be priced out."

TIP: Rent it out. If you're buying a second home while still working, financial advisers recommend making it a rental property until you retire so it can pay for itself to some extent, and you can stash away more in retirement savings accounts such as 401(k)s and IRAs.

'Rules' for choosing

Choosing a home for retirement requires balancing pragmatism and emotions, as these "rules" show:

Rule 1: Pay it off: Most financial planners advise that you pay off your mortgage before retirement. If that's not feasible, at least aim for no more than 25 percent of your retirement income going toward your mortgage, says Kathleen Cotton, a certified financial planner and owner of Cotton Financial Advisors in Lynnwood. Downsizing can help.

That was true for the McGees, who sold their four-bedroom Montlake home for more than they expected — in the $400,000s — and were able to upgrade their condo search while erasing mortgage stress.

Carrying a mortgage can have a bright side, notes Robert Reed, a certified financial planner: the tax deduction you get, especially if you still carry a substantial mortgage, plus the opportunity to itemize tax deductions such as charitable contributions.

Rule 2: Don't confuse vacation with retirement: Every year, magazines tout the best spots in America to retire, based on factors such as cost of living and local amenities. Bellingham, Spokane and Bend, Ore., have made recent national lists.

But such places — or even your favorite vacation spot — may not suit your particular wants and needs. Before setting your sights on any new locale, consider the features that experts suggest a community should have:

Nearness to a city: Bert Sperling, president of Sperling's Best Places, the firm that provides data for many of those "best-retirement-town" lists, says that the first must-have is: "Live within an hour, two hours at most, from a major metropolitan area" for access to good medical care.

A pedestrian-friendly downtown.

Senior centers offering ways to feel involved (Around here, Edmonds and Bothell both get high marks for their senior centers).

Good mass transit: If you don't want to drive all the time, you won't have to.

Favorable "climate": This can mean both weather and culture.

Colleges: Sperling suggests that retirees seriously consider college towns. They offer more low-cost continuing education for older adults, they're "vibrant," and employment is likely to be stable. "If a town has a bad economy, it affects the whole town," he says. "Less tax revenue can curtail services such as Meals on Wheels, for example. "

Tip: Take a trial run. "Five years before retirement," Miller recommends, "before you jump and buy, spend vacations (at your chosen spot); consider leasing for a season." You can evaluate the everyday services you'd need later, as well as how tourism affects locals.

Rule 3: Seek subtly senior-friendly housing

Two options:

Downsize: But not too much. Realtors and retirees agree that most people still need about two bedrooms plus a den or spare room for an office or hobby room.

A spare bedroom can also be essential if, down the road, you need some in-home care, says Les Ostermeier, an elder adviser for Choice Advisory Services, a Seattle-based group that focuses on helping people find seniors-only housing.

Seniors-only communities: These can be great socially, though real-estate agents say they're not usually great investments - especially if you might move again later.

"In Seattle, you can make money in five years with most houses," says Johnine Larsen, a Re/Max agent who, like Brodniak, has the Senior Real Estate Specialist designation. "In (seniors-only) communities, you'd be lucky to break even in five years, because you're restricting who can live there."

Note: These communities should not be confused with assisted-living facilities, where residents don't buy property but are provided housing plus varying levels of dining, transportation and sometimes health and other care services, as well as social amenities.

 Strategy session

Are reverse mortgages a good idea?

Reverse mortgages allow you to draw funds out of your existing home equity, to be paid off only when you sell the house or die.

They can be helpful if you're strapped for cash, but most financial planners generally advise against them, in large part because of fees. Initial closing-cost fees, for instance, can run as high as $12,000.

Calculating help: The calculator feature on AARP's Web site — — takes into account many factors in such loans, including your age, equity and value of your home, and estimates what such a mortgage might cost.

More online calculators

What to look for

Whatever the house or condo you're considering, here are some features agents recommend:

• One-level home with minimal stairs.

That was one thing that attracted Donna Cole to her side-by-side in Bothell: "Closer to the city homes are building up, not out, and I didn't want to be on the 12th floor of anything."

• Minimal sloping terrain, "even in the driveway," says Johnine Larsen, a Re/Max agent. "How hard is it to get out of a car on a hill?"

• Low-maintenance exterior materials — such as vinyl siding — and a small, simple yard.

Inside the house, think about low-key ways to keep the home easy to negotiate, especially if you have the chance to remodel.

• One flooring material, such as wood or vinyl, throughout the home. That's something suggested by Gary Henderson, a Seattle interior designer and president of Henderson and Associates: "Transition changes from carpet to tile or wood" can be more of a hazard than people might think.

• Bathrooms with walk-in showers rather than tubs, which have edges that must be stepped over.

• Hallways and doorways that are 30 to 36 inches wide to accommodate a wheelchair or walker.

• Doors with handles, which are easier to use than doors with knobs.

"Take time to handle things," Henderson adds. "Open doors and cabinets. Make sure they're smooth and easy."

— Katrina Brown Hunt

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