Very LONG term retirement planning

[Usedphone]

We went out with some friends this weekend and inheritance / end of life planning came into the conversation. (Coincidentally I had a similar conversation earlier that day with a different friend).

Anyway, our plan is that we'll downsize once retired and live from the estate pension and whatever we have from our private pension (potentially not a lot), and whatever interest we can get from the sale of the house (in current money we're looking at at least £700k).

The new downsized house will be in the name of all 4 DC, but we'll live in it.

Is the plan mad? One friend (who's closer to retirement age and has had professional advice) said it's fine. The other couple said it was impossible to trust DC.

To not having to liquify our house if we end up in a home...

But I hadn't thought of the second home tax.

Moving from London to rural Norfolk doesn't sound ideal for old age. Much bigger selection of hospitals in London for any specialism you might need, free and plentiful public transport for when driving becomes an issue or big expense, lots of community services and social activities, easy to get to airports to travel overseas, easier for family to visit, and you must have a community here and would have to build one in Norfolk which can be difficult in rural areas.

it’s not about trusting your kids. Any asset someone has can be forced to be liquidated in the right circumstances.

retiring abroad will mean you lose access to the NHS and your standard government retirement benefits. Most other countries don’t just take in elderly people who haven’t spent years contributing taxes and take care of them in their old age.

it’s not about trusting your kids. Any asset someone has can be forced to be liquidated in the right circumstances.

Yep. It's a bet on circumstances as much as it is the kids nature.

Do your children live or plan to live in rural Norfolk too? The sort of informal support by your children that makes extreme old age much more manageable and independence easier to maintain is frankly a pain in the arse to provide at a vast distance in time. Rural roads in the East of England can take an age to traverse even if the distance as the crow flies looks manageable.

The sorts of paid services that again make life at home for the very old easier to keep going - taxis and volunteer drivers once you can't drive any more, carers, even cleaners and gardeners - are MUCH thinner on the ground in a lot of rural areas. Not absolutely all of them, to be fair.

Given where you're living now, there may well be a sweet spot between being half a day's journey from Kings Lynn, and being still on the tube network. I just think you need to research it VERY carefully, and you might need to spend a bit more on the house than you currently think.

(Incidentally, have you ever lived that rurally before? I grew up in a fairly remote bit of countryside and you'd have to pay me to live that far away from things ever again).

Ah, that old chestnut - ‘to avoid having to pay care home fees so that the other tax payers have to fork out’
One problem with this plan - You say you’ll have a considerable amount of equity left over when you downsize. The first thing that will happen is that this money will be taken into consideration when completing a financial assessment for care home fees.

Yes - the first one in care would actually pay a lot LESS if their assets are tied up in a house shared by someone else.

If one of you still lives in the house, you won’t have to sell it.
if you both need to pay for care, or the last surviving one of you needs to pay for care, the house should be sold and attempting to bypass this may (rightly) be seen as deprivation of assets and the Local Authority absolutely will come for this.

I'm a dual citizen, so I don't have the same issues as an average Brit. Healthcare is universal too over there, and as a citizen I have access to it. What other potential retirement benefits could I lose?

I think on first sight I would definitely prefer to retire to a nice house within sight of the Caribbean in Mexico than to a small bungalow outside Waterbeach... [caveat: I'm such a UK homebody I probably WOULD choose Waterbeach, but you'd presumably feel differently!]

Well it's definitely more appealing!

As for the PP asking about living rurally, I've already lived in the middle of nowhere in the West Country and it really cannot get any worse than that (maybe the outer Hebrides? ), I've always felt everything is way more within reach in Norfolk.

I still have no clue where our DC will eventually live. Most likely London, although one of our DDs might move back to the West, but to me that's definitely NOT an option.

Norfolk is where my DH is originally from. His DM and DB live there. So that's why we've chosen it as our "retirement location" or yes the Mexican Caribbean, it's really all down to logistics and money.

Sell your house and downsize. Give your DC whatever cash is spare. Having them own your home is potentially fraught with problems and I don't think any solicitor would advise that route.

OK that makes a lot more sense as a plan. It sounded as if you'd picked rural Norfolk with a pin, but clearly not. I'm now looking at a listing for a nice 2 bed bungalow in Downham Market just off a bus route to Morrisons and the railway station. It's 250k rather than 200k, but fair enough.

I still personally wouldn't hand over all my assets to my children at 65, life is too uncertain imo. I'd get very good advice on that.

Don't do it @Usedphone - a friend is divorcing after 30 years, his DM put her house in his and his siblings names and it's going in the matrimonial assets pot...

Just for the tax implications I've realised it's a bad idea

I’m from Norfolk - not sure where you’re looking for £200k, but there’s not many areas I know of where you could get a decent house for that.
there are some places in Norfolk I definitely wouldn’t choose to retire to.

www.rightmove.co.uk/properties/152560565

That one for example. DH went to secondary school, so he's the one who tends to look on right move.

First of all, OP, don't be so naive!
Secondly, consult a good solicitor and Financial Adviser, so that you (or your children) don't get caught out by any unforeseen legal/financial issues.

Ahh, yes west Norfolk is affordable. Do you know the town? It’s ….local

I had a friend who had to go into care in his late 50s. It happens more often than you might think. You are also making a huge assumption that you will both survive to age 65.

Spell it out. You mean 'to not have to pay for our own care if we end up in a home, and get the taxpayer to pay for it instead'. Right?

I've been there a few times! That's where we stop before seeing my MIL.

Our retirement planning is based on practical things.

5-10 min taxi drive to supermarket, GP surgery, hospital and railway station, for when we can't drive

Walk in shower we can get to, we will need a lift or stairlift so have an ISA labelled stair lift

Easy access for carers and district nurses and cleaner and window cleaner

Easy to care for garden, and a gardener when we can't cut the hedge or mow the lawn any more

Good Wills that a solicitor has talked us through the what ifs, in your case, what if two of your kids marriages fail and the ex spouse wants their share of the house you live in

Good access to things to do, library, knit an natter, social lunch clubs, decent pub with grub, exercise classes.

Not the middle of nowhere where in Norfolk where it costs £120 round trip to visit FiL in hospital every day. Mil could only go once in his three week stay.

Enough money to pay for our own care home fees/trip to Switzerland

Morally I don't see the problem. The amount of taxes I pay every single year, means that to me I pay more than my fair share.

And I actually don't want to go to a care home, if I end up in that situation I'll definitely head back to Mexico where passive euthanasia is legal.

If any of your dc should divorce , then .25 of the value of the house will go into the pooled amount of money they would be expected to share with their stbex .