When to compromise for pension?

[Twoshoesnewshoes]

I started a thread about ‘boring’ houses but I think I had not clarified my own thinking….

Im in late 40’s. We’re considering moving to a fairly nice but boring house, which would release a lot of capital from our current home.
some we will give to DC, but it would leave plenty to get one or maybe two BTL properties on short mortgages.

they would be paid off by the time I am in late 50’s and give a retirement income equivalent to my current income- I’m not planning to fully retire but I do want freedom when I’m older and to be able to help out DCs.

but it would mean a compromise now- a boring house in a good location but nothing to make one’s heart sing.

am I too young to make that compromise now? Or is it good to be planning ahead at this age?

What other pension provision do you have?
How old are DC and are they still at home?

My home (and garden) and its location are really important to me- I spend my spare time gardening, walking, swimming so having all this on hand hugely contributes to my quality of life, as does living in a house I love. I don’t think that’s true for everyone though- lots of people are quite happy in a nice enough house and would rather spend the extra money on holidays or something else. No right or wrong- the thing is to identify which group you’re in which I’m afraid is down to you.

What makes a house 'boring' or 'not boring'?

I have done the opposite and potentially compromised my retirement to secure my ‘dream’ home. Like @Swoopy my home environment is extremely important to me and I assume this will continue to be of importance in retirement when I will be spending a greater amount of time at home.

Having said that if circumstances change and I am unable to manage financially on my pension/savings I will be able to move later on.

I have a few employer pockets of pension.
my three DCs have all left home, youngest still in uni.
@NoBinturongsHereMate umm no character , no individuality I guess.
yes I could downsize nearer retirement which I was planning to- it’s confusing. I think doing this now would mean a much better retirement income?

What’s your pension plan if you don’t move or move for example in 10 years time?

Is the main reason you move now to free up equity to give to your DC?

Surely you can give a house character easily enough.

@EasterBunnny , yes downsize later, to get a lump sum - but it will give me a much lower return.
@NoBinturongsHereMate yes you’re right. The boring house has a potentially really lovely garden too.

Have you done in depth calculations of buying one or two buy to lets, the buying fees, tax on rental income etc?

Do your DC need a lump sum yet?

Yes I’ve factored in income tax, maintenance, management, empty rooms etc.
I’ve given DC1 a lump sum for her flat deposit and have half saved up for DC2, he’s a couple of years off.
id like to work much less in a few years - from full time to three days maybe- so would need to be mortgage free then or have additional income.
its very confusing 🫤

Also irrational thoughts about my saving for my retirement and the world ending in a fireball a month before I retire…

if it was me I’d wait until my youngest finishes university and then reasses.

Are you actually paying into a pension at the moment, if not that would be my starting point?

Yes paying in to NHS pension so that’s good.

Re the house point, I think I get where you're coming from.
I'm what has been called "under housed" by others. It's average in every way and "below" what I could afford if I took on more mortgage.
It has limited curb appeal and isn't very pretty. It's just a box really.

But I like the location, layout, condition and interior decoration.
I spend a lot of time away in hotels with my business.
I like money for regular holidays to far flung places I've not been to before.
When I meet friends and family at 'mine', I can afford to host us all at a local hotel bar restaurant as my house is a bit too small.
My pension pot is worth more than the house - I put much more into that rather than mortgage payments. So I'll retire pretty early and decide how to spend my time.
My kids have had a good education and got them onto the housing ladder.

But I've never been really into houses, they are just somewhere to base myself. I'm just not particularly emotional about them. And stretching myself to upgrade so others think 'wow' never really caught my fancy either, all seemed a bit social climber 😆.

@alwaysmovingforwards yes, underhoused is a great phrase!
we go away lots at the weekends and would like to travel more (when the dog departs) so there is that - we won’t be in our home loads.
i think you’re right, it does have something to do with pride .

I would downsize in a heartbeat and invest in a mixture of property and stocks and shares pension/ISA. Cover a few different bases.
We considered downsizing but DH got cold feet, but we’ve got the rest sorted. I suspect we’ll move eventually, we’re waiting for one of a group of lovely little cottages locally to come onto the market. Might be a while though 😄

@SabbatWheel would you? That’s interesting- do you mind if I ask your age?
yes I think DP would prefer mixed investments- maybe one BTL and the rest in shares.

Are those the only choices? I downsized to be mortgage free and work 2 days a week, I moved a bit further out of town, have a bigger plot and a smaller house. I love the new house although I did spend a while comparing it unfavourably to the old one. It takes a while to settle on and make it mine, but now it makes my heart sing as much as the old one and I have many more choices as to how much I work and what I do. Could you look for a cheaper place or see potential for it to make you happier?

This particular house I have my eye on is just an unusual combination- a bit ugly and in a less popular village so it’s cheaper but also a big garden and backing on to countryside.
i haven’t seen anything similar in that price bracket.

It sounds like it has quite a few things to like!

And if it's ugly outside you don't have to look at it, and inside you can make it as you would like!

Good but inflexible. And if the state pension age goes up, so does the NHS one. I'd be looking at supplementing with a personal pension to give flexibility.

And it sounds as if you've done the sums on BTL, but have you done similar on other options? Returns in property aren't generally all that good these days, and although the asset value tends to go up quite reliably it's illiquid. Shares have the advantage of being able to sell a few at a time rather than only in house-sized units.

Awful time to be in BTL, plenty are getting out and selling off portfolios.
Good run for 25yrs, but it's not easy money, if any these days (and high risk if tenants mess you about).

With the BTL I don’t need to make an income from it til I retire. It’s no longer possible to buy with a mortgage and make a profit so I think a lot of career landlords can’t afford to stay in.

Yes so true

So the question is whether a "boring" house plus pension provision is preferable to a characterful house and minimal pension provision?

Sounds like a nobrainer TBH. I confused that you need opinions.

People don't live in bog standard houses because they lack flair.