Stocks vs Primary Residence

[dirtydeeds]

My wife and I are in our early 50s. House is worth ~3 million (400k mortgage). Have about 750k in RSPs (mostly in US and Cdn index funds and ETFs).

I'm pretty much burnt out from work and anxiously looking forward to retirement. Worried our net worth is too heavily invested in real estate.

We've been talking about down sizing to a 3 bed condo (~1.8mill) when our daughter finishes high school (3 years). But I'm starting to tell the wife we should just sell house, rent and retire now. Am I crazy?

We live in Vancouver and don't want to move to suburbs. Rent in our area is high (~5 to 6k a month for a 3 bed).

Would probably be easier to just wait if work wasn't just endless stress. But the idea of 3.5 mill in liquid assets seems so tempting. What would you do?

 

[johnnyhouse]

@dirtydeeds I'd do what you wouldn't. Cash in on the house and retire in a LCOL area when the kid is done with school. I mean, Vancouver IS nice, but not an extra $2M nice. If someone's would tell me they either pay for accommodating for me to live in Vancouver for the rest of my life, or give me $2M cash... I'll choose the cash every day!

 

[dirtydeeds]

@johnnyhouse We have thought about that. My extended family is in Nova Scotia and I'd love to retire there but my wife has a huge extended family in Vancouver and they are winning that battle at the moment. Also we're city people. Tend to spend our vacations in large cities in Asia and Europe. That all being said 2 million is a lot to pay for urban amenities.

 

[johnnyhouse]

@dirtydeeds Exactly. And your rebuttal can be: "We spent all these years next to your family, now it's time to spend time close to my family". Plus, everyone's family should be happy for members of that family pursuing happiness... Wherever it may take then.

 

[dirtydeeds]

@johnnyhouse I like the way you think.

 

[24601]

@dirtydeeds Retire, sell and rent. Top off your TFSAs and invest the rest in a joint balanced portfolio with dividend income. That will generate more than enough income to rent a fabulous apartment in Vancouver.

Then in 5 years you can both open a First Time Homeowners Account! Move anytime with just 30 days notice and no transaction fees.

Good luck!

 

[mttyhu]

@dirtydeeds Stress is a killer. Down size now, don't rent, invest the balance, and find another job. Find someplace so that your daughter remains in her school, and just do it. If you have the big jammer where does waiting get you? Good luck.

 

[dirtydeeds]

@mttyhu You are definitely right about stress.....takes its toll eventually

 

[cruwbewq]

@dirtydeeds I am a financial planner here in Vancouver and this is a scenario that i come across quite often.

There’s a few things that are the main concern when looking at this:

Do you have assets in a non registered account? Or is your RSP where all the investable assets are?

Do you have a company pension plan of any sort? For you and your wife?

Once those are answered it’s a lot easier to understand the full picture! I’m happy to help if you have any further questions and want to understand your options.

Cheers!