Retired couple ponders moving to a smaller home
Q: My husband and I are retired, in our 60s, and in good health. Our income consists of his pension and Social Security and my pension and a small Social Security amount. We have IRAs totaling $50,000, $10,000 in CDs, and $5,000 in savings. Our home is paid for and we have no debt. Our lot is about one acre. Would it be feasible to buy a smaller home with a smaller yard and rent it out for the foreseeable future, with the thought of using it to live in ourselves at a later time?
M.G. Tulsa, Okla.
A: If the only concern about staying in your home is your ability to care for a large lot over the long term, you might want to consider hiring a lawn service (or a grandchild, if one is around). That's probably cheaper than buying a second home and would avoid the hassles of moving, says financial planner William Judge Jr., of ICS Financial Advisers in Richmond, Va.
Mr. Judge also wonders where you'd get the money to buy the second home. If you plan to pay for it mostly out of rent proceeds, you'll need to factor in a vacancy rate of 20 percent, and ownership expenses, such as property taxes and maintenance. On the positive side, says Judge, your current cash flow plus rental income could generate a small profit each month. You'll also be able to depreciate the value of the rental property. But unwanted tax consequences from that depreciation may surface when you move into the home, so check with a tax counselor before finalizing your plans.
Q: I inherited coins dated between the early 20th century and the 1970s. How might I find a reliable estimator of their value?
E.K. via e-mail
A: Try the American Numismatic Association's website, www.money.org. Once there, you can track down a coin dealer by state, country, specialty, etc. Steve Bobbitt, a spokesman for the dealers' trade group, says members agree to abide by a code of ethics, promising to give customers an honest appraisal. Most will appraise your coins for free.
Mr. Bobbitt recommends you obtain a guidebook to US coins that's known simply as "The Red Book" to look up coin prices. You also can call the association (719-632-2646) about upcoming coin shows in your area, where you can meet with many dealers and potential buyers.