Divorcing at 56 and unsure whether to stretch for a house

[NellyAmelia]

I wasnt sure whether to post this in money matters or divorce so I went for both.

I’m 56 and about to start divorce proceedings and we have agreed a financial settlement but it’s the buying my new home part maybe after Christmas I’m not sure about after 24 years as a couple. I’m not sure whether to;

1.Buy a house that I can just afford on my part time teacher salary on a longer small mortgage then in 3 years when I’m 60 pay it off with my lump sum, I’m going to work until I’m in my mid 60s.

2.Take early retirement and a hit in my pension at 57 but have a house that my kids can visit and stay over It will take me over the 40% tax bracket by 9k but I’ll have more each month to do the things I want. Still working till my mid 60s.

3.Buy a much smaller house mortgage free but it would be very small - the mortgage rate is crazy atm and go with the smaller house bigger life thing. I’d have my modest lump sum as a buffer then.

I know there’s no right or wrong answer but my brains in a bit of a pickle and would appreciate some wise words please.

I think 1 or 2. Especially if you have kids who might be with you for some time, although you might then have uni fees etc. If it’s just you then you have to decide what would be most beneficial to you, bigger house or more disposable income. With 2, would you still be planning to pay off the mortgage when you get the pension lump?

Option 3 is appealing to me personally, but it depends on the sort of house the money would get you and whether you’d actually be happy there. There’s not really enough detail to know for sure, but I’d really recommend that you buy somewhere for the long haul, rather than somewhere that’ll do for now just to move again 3-5 years down the line, as moving is very expensive and brings with it an awful lot of stress.

Is there any possibility of going back full time to earn more and get yourself a better house to blend options 1 and 2 together?

Thanks. The kids are through uni so just me to look after now.

That’s good advice, I want to be settled for the long haul, moving can be so expensive too.

If you plan to stay forever to avoid moving again, then you will heed something that is going to be suitable for your needs in several years time too. Eg downstairs loo, stairs that aren't too steep, is it on a bus route if you can't drive, will it have lots to maintain etc.

how old are your kids, how often will they be staying (with or without partners), how soon before grandchildren will be staying?

No point rattling around in a large house you only occasionally need

When I say large I mean just a 3 bed semi v a 2 bed one. My kids ate 22 and 27 and the youngest is in an apprenticeship so will be at home for at least 2 years

Yes I’d be staying in the village I was brought up in. Plus I guess if I want more room I can add a lift conversion, extension or conservatory at a later date

Get the smaller house! I’d never want my mum to stretch herself just so there was a bed for me to sleep in a few times a year! They’ll be fine staing on a sofa bed or even in a cheap hotel. Give yourself the more comfortable life.

I'd do option 3 to give yourself some head space and then rethink things in a few years time. I know buying/selling has costs but adjusting to your new life with low monthly outgoings plus a lump sum for security would appeal to me.

Option 3.
and a really good sofa bed. Your kids will understand, Your long term future is way. Ore important at this point

then you do not need a 3 bed. 27 year old can use the sofa as I assume they hardly going to be visiting every week.
Option 3 is what I would choose.
Taking money from pension in your circumstances seems wrong as you only need a few more years to avoid that hefty loss.

But you have one at home so 3 won't work?

I'm in a similar situation in some ways. Am going up to full time work for a while which will also give me a bigger buffer in retirement. Will do it for a few years and then see where I am. I think it's worth it looking long term.

I'd get the smaller house TBH - a lot of 3 beds, the 3rd bedroom is barely any size at all, and doesn't justify the price bump in my opinion.

Option 3 for sure.
Would that be a one or two bedroom property ?
If you go for a one bed, you could still make it work by converting the living room to a bedroom for you or youngest dc who is still living at home.
It would be a bit like living in a bedsit but still your own place without a mortgage or a hit on your pension.

Doable for a couple of years.

Option 3. Gives you more options long term in terms of retirement age and more financial security.

Option 3, you can always let the 27 year old have your room if they stay. I’ve found that as they get older you go to their homes as much as they come to yours. So much better to have more money in your pocket to enjoy life and even be able to help or treat them. This option gives you financial security.

Option 3 definitely. If your children are anything like mine, they will want to see you happy and stress-free. Mine positively encouraged me to downsize! Your buffer is very important. All the best.

Smaller house with options like a sofa bed if needed. Two double bedrooms would be a must. Remember they don’t stay forever and you need to enjoy life and not be under pressure

3
My mum did that so she could be mortgage free. Has 2 adult kids. Good sofa bed in living toom for when all of us are in for overnight at thesame time (rare). At 27, theadult does noneed own bedroom overyour financial security and comfort

I'd go for option 3, it leaves you with options for the future.
Would the 22 year old child sometimes stay with dad.so won't be using the bedroom all the time?
And they won't be there forever anyway, and once they've gone, one spare room is plenty.
I think having a decent amount of money for discretionary spending and a good amount of instant access savings for emergencies is going to give you a comfortable retirement, and retirement can last 2-3 decades so it's an important chunk of your life.

Option 3, even a one bed would be fine, future proofed for your older self. Youngest kid on the sofa. He can stay with his father aswell I presume.

When kids visit you could all go to a hotel, or they could. You could pay for that as it would be far cheaper than buying a three bed house!

Could another option be renting? You will then have a large lump sum from your divorce to invest and provide you with an income?

I wouldn’t cash the pension in now, the actuarial reduction would be punitive. Personally I’d go for option 3. Find a small house or bungalow in an area you’d be happy to grow older in. That way you’d keep your pension on until you decide to stop working so you’d have a bigger lump sum to do any work plus extra years of salary. Millions of people live in smaller homes and are very happy. It’s not as if you have small children where you need a big garden etc.

There's an incredible feeling of freedom about being mortgage free.
I'd go with option C but mentally allocate a budget for 1-2 weekends away each year to gather your family together with space for all.
And invest.
Singles holidays can be pricey but really enjoyable.