Retirement housing

We plan to retire in four to eight years from federal employment. We now live in a brick rambler in a deteriorating neighborhood; own a waterfront lot in another state (no plans to build), plus a rental -- also out of state; and have about $26,000 in bonds and savings. Should we sell our house and move out of the neighborhood? Should we buy another house? How about selling the house on contract? We prefer not to rent our house, due to the neighborhood. Our location plans for retirement are still unsettled. D. G.

Your options are fairly typical. Generally, I suggest the following: If the future of your house appears in doubt because to the deterioration of the neighborhood, you should probably sell. Before selling on a contract or taking purchase money on an assumption of mortgage, check out the purchaser's credit extensively.

I recommend that couples own their housing free and clear at retirement as a hedge against increasing costs for housing at a time when incomes are likely to remain relatively fixed. When you decide where you want to live, you should plan on buying a condo or small house.

I suggest you keep the rental property for tax relief and for continuing income. You gain from holding the waterfront lot only if its market value continues to increase. My rule of thumb on such property is that if the market value does not double in five years, you should probably get out and get into something else.

Before deciding on a retirement location, be sure to check out alternatives with on-site visits. If you are considering moving to a warmer climate, write for a short article on Sunbelt retirement by Peter Dickinson. It's free. Write him at 47 Chestnut Avenue, Larchmont, NY 10538. The article sets out several criteria for selecting a retirement location.

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