Smart Moves

A trend for marriage in America is that more couples are older when they tie the knot. In fact, an increasing number of people now marry for a second time after their kids have reached adulthood and left the nest. And the older the couple, the more likely they are to each own a home on the day they wed.

Coming into a marriage with two homes raises complicated questions for couples. Should they sell one place and move to the other or sell both properties and buy a new place together? One additional option -- which is increasingly popular with older, empty nesters who can afford it -- is to retain both their domiciles indefinitely.

Dr. Bonnie Jacobson, a New York therapist specializing in relationship issues, tells the true story of a couple of clients who grappled with the two-home issue and ultimately decided to keep both properties.

The husband is a medical researcher in his 70s who works in the Washington, D.C., area and loves his suburban home there. His new wife, a professor of philosophy in her 60s, owns and enjoys a Manhattan apartment close to her university job.

"They see each other on weekends and during vacations. They have a beautiful marriage, so what's the big deal? It's all very romantic," says Jacobson, the co-author of "Choose to be Happily Married" and other books on relationships.

Jacobson also says a couple keeping separate homes can sometimes be a good solution for re-marrying couples with grown offspring who wish to keep their estates separate.

"This way when it comes to the kids, you don't have conflicts over who inherits the property. Each set of children inherits their parent's home," Jacobson says.

Are you a two-home couple who will soon marry and need to forge a unified housing plan? If so, these few pointers could prove useful:

-- Make sure you communicate about your future housing desires.

Many people who marry or remarry in their 30s, 40s, 50s or beyond have spent years living independently and are used to making decisions solo. In such cases, Chris Knight, a certified financial planner, says it's especially important that they discuss both their financial and lifestyle preferences before making a major housing decision.

Couples who find it hard to reach a conclusion through their own talks might consider hiring a financial adviser to help, if only for a consultation lasting a couple of hours. A skilled adviser will draw out each partner, thereby helping the couple come to a compromise that works for both.

Reaching agreement on housing objectives helps a couple overcome one of the key hurdles they confront in combining their lives.

"When they marry, couples merge legally. But many still don't merge financially for many years. Reaching a consensus on housing helps people merge financially at an earlier stage in their marriage," says Knight, who's affiliated with the Garrett Planning Network rr(garrettplanningnetwork).

-- Don't rule out a change of neighborhoods.

Couples with adult children typically have more choices open to them than do those who still have young kids at home or who plan to have a family soon. No longer must they focus on choosing a community with quality schools, playground access and other child-friendly amenities. Instead, they have the liberty to concentrate on their own interests and hobbies.

Once both partners clarify their strongest interests, they will find it easier to identify locations and housing choices that could serve both.

-- Take retirement planning into account when making housing decisions.

Retirement experts underscore the reality that many baby boomers -- people born between 1946 and 1964 -- have insufficient savings for retirement. That's why financial planners like Knight caution them against committing to an expensive housing decision, like building a custom home, until they've put away enough funds for their retirement years.

How can you determine if you and your partner have enough funds to retire? This question requires analysis, Knight says. Among the factors to consider are your health status, probable life span, how long you plan to work and your expected return on investments.

"If your interests are expanding and you want to travel, you'll likely need more money than anticipated," Knight says.

To get a grip on your financial needs for retirement, Knight recommends you use the free calculators available on the Internet, including those provided by such mutual fund companies as Vanguard (www.vanguard.com) and such personal finance publishers as Kiplinger (www.kiplinger.com). To help with lifestyle planning for retirement, you may wish to pick up such books as "The Power Years: A User's Guide to the Rest of Your Life," by Ken Dychtwald and Daniel J. Kadlec.

-- Consider selling both homes and buying another.

Are you and your partner marrying for the second time? If so, you may be uncomfortable with the idea of moving into the home that was once occupied by your partner's former spouse.

Both partners may be strongly attached to a home where they've lived for many years. But starting fresh by selling both their properties and then purchasing a third place can have many pluses, according to Knight.

"Buying one common home instead of keeping two can be financially advantageous. And it could be the very best choice for young people who wish to raise their kids under the same roof," he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

A construction company manager in his 50s bought a ranch-style house in a desirable neighborhood with the intention of renovating the place to flip it -- meaning he hoped to quickly sell for a profit.

Full of bluster and self-assurance, he embarked on a massive renovation program that involved gutting rooms and moving walls. The end product was good, but the whole renovation took vastly more time and funds than expected. Consequently, he lost money when he sold the place.

"By the time the house was ready for sale, the owner had spent nearly three months on the work and gone $25,000 over budget," recalls Ashley Richardson, the agent who eventually handled the listing.

Richardson, who's affiliated with the Council of Residential Specialists (www.crs.com), agreed that the construction manager's property needed updating. But he says the owner would have been well-advised to limit the remodeling work to minor projects to improve the home's appeal without costing a fortune. For example, he could simply have repainted the interior walls and replaced worn carpet rather than doing massive renovations.

This true story illustrates the risks of "over-improving" any home above neighborhood standards, says Mark Nash, author of "1001 Tips for Buying and Selling a Home."

"If you get into renovations involving too many bells and whistles, you never get a dollar-for-dollar payback when you sell," Nash says.

While many real estate markets are now strong, others are still sputtering. Because of that, Nash emphasizes the need for forethought and guidance from local experts before embarking on pre-sale remodeling.

However, Nash cautions that would-be sellers who are too stingy to pay for essential improvements, such as a shabby roof, face their own set of difficulties.

A dated-looking kitchen is also a huge negative for buyers, says Nash, noting that it's essential to replace countertops that are worn or scratched. In addition, he says sellers should replace an old kitchen floor. But in most cases, he argues against large-scale kitchen renovations that involve tearing out cabinets or installing professional-grade appliances.

Here are a few tips for sellers on how to avoid excessive pre-sale work:

-- Seek the counsel of local real estate experts before you renovate.

"It's always unwise for sellers to commit to remodeling before they discuss the work with real estate people who know their area. They're the ones who can tell you what your market will bear and what it won't," Nash says.

He recommends you contact three local agents for advice on which home-improvement projects are truly necessary. Most well-established agents will visit your house and advise you even if you don't intend to sell for another three to five years.

As an added benefit, he notes that many agents maintain a database of reliable contractors.

-- Limit your renovation projects to neighborhood norms.

Tom Early, a real estate broker who was twice president of the National Association of Exclusive Buyer Agents (www.naeba.org), says current homebuyers won't pick up the tab for any renovation work that raises a property above neighborhood standards.

What sort of upgrades constitute "over-improvement"? For example, you wouldn't want to install high-end, designer light fixtures in a neighborhood of starter homes. By the same token, you wouldn't want to construct a three-car garage in a neighborhood where most houses have no garage at all.

-- Don't be afraid to cancel any projects that prove too expensive.

If you think your contractors are going over the top, Nash says it's better to cancel projects before they're finished than to overspend on work that will cost much more than expected.

"For example, most buyers don't care if they get super appliances in the kitchen or laundry room. It's the basic house and floor plan they're looking for and not high-end elements in every room," Nash says.

As he points out, real estate agents often recommend the use of less expensive products than are suggested by contractors. For example, you don't need to spend your money on top-of-the-line carpeting when a mid-level grade will do just as well.

"It's true that bailing out of work with a contractor can cost you a penalty. But doing so might still be the wise course if a project has become too ambitious," Nash says.

-- Avoid rushing the renovation process.

As Nash notes, many home sellers realize too late that a thoughtlessly executed remodeling program can hit their wallet hard. That's why he recommends you write on an index card the basic elements of a carefully considered plan. Have that index card handy as a reference guide when contractors come over to do estimates.

"Don't let the contractors dissuade you from your goal of staying within your budget. What you need is a sound plan. Then stay true to that plan until it's all done," he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

Steven Sass is an economist and an expert on retirement planning. Yet he acknowledges that he and his wife, a fiction writer, are uncertain about their retirement housing plans.

Both agree they'd like to downsize from their sprawling two-level contemporary to a smaller, single-story space. Both also wish to stay in the Boston area, where their four grown children and three grandchildren reside. But beyond that, they're conflicted.

"I'd like an urban setting, but my wife wants something more bucolic," says Sass, a program director at Boston College's Center for Retirement Research.

Though the couple is still at least four years away from retirement, Sass says they're already "sniffing around" in search of the ideal retirement setting for their wants and needs. They're also reviewing their financial plan to ensure that the next home they buy will be affordable. And he advises other retirement-age downsizers to do the same.

When reviewing options for downsizing, he stresses the need to take a methodical approach that factors in the expense of selling one home and moving to another.

"Downsizing -- which means moving to a less expensive home not just a smaller one -- usually increases your income by reducing your housing costs. But remember that the cost of downsizing usually runs about 10 percent of the value of your house," Sass says.

People downsizing can't afford to ignore financial issues, says Fred Meyer, a long-time real estate broker.

He says retirees are often happier living in a modest home while pursuing their post-work dreams than in a ritzier place elsewhere. The good news is that those with such common interests as tennis and golf can find these activities in many locations. But others, such as opera aficionados, have a narrower range of choices.

Leo Berard, charter president of the National Association of Exclusive Buyer Agents (www.naeba.org), says it's crucial to plan ahead for a move in retirement.

"In the best of all possible worlds, you'll start searching for the ideal place to live at least two years prior to retirement. There's no one-size-fits-all solution to housing for your later years," he says.

Here are a few pointers:

-- Think through the implications of moving near your grown children.

Many retirees yearn to see more of their grown children and grandchildren. And they're willing to consider a distant move to do so.

"The kids are a powerful draw for lots of folks. But you need to think through the implications of living very close to them," Berard says.

Perhaps you relish time with your offspring. But how would you feel if asked to take on the role of regular baby sitter for young children?

"Even if the kids' mom and dad don't intend to make you their primary caregiver, they could start to rely on you if good child care is expensive in their area," Berard says.

It's also possible that your adult children will be less than thrilled having you live in the same neighborhood. To be sure they're OK with the idea, Berard recommends you have a candid conversation before committing to the move.

-- Explore a retirement "paradise" to see if you'd truly like it.

Fancy websites and glossy ads tout the idea of moving to faraway counties for retirement, where it's said the scenery is beautiful and the cost of living low.

But in spite of all the hype surrounding such utopian retirement settings, many who choose them find them less than satisfactory, says Eric Tyson, co-author of "Home Buying for Dummies.

"The novelty of unlimited recreational activities ... can wear off fast," he says.

As Tyson notes, retirees living in an isolated resort area often feel disconnected from the everyday lives of friends and family members -- even if they come by on vacation from time to time.

What's the best way to determine if a resort community would be a good place to retire?

"If possible, take a lengthy vacation there or rent a place there for a month or two," he says.

-- Examine your financial situation.

Do you lack substantial retirement savings and expect to rely on proceeds from the sale of a large family home in your future years? In that case, Berard recommends you plot a strategy with a trusted financial adviser or accountant before making any sudden move.

"Getting professional advice is particularly relevant in this era of rapidly changing home values. You want to carefully time the sale of your present property before you buy another one," he says.

Berard says it's important to give serious thought to the level of mortgage debt you're willing to carry into retirement. For most people, a comfortable retirement means relief from large house payments.

"After downsizing, it's always great to be free and clear of all mortgage debt. That's because cost of living factors are huge in retirement," he says.

-- Seriously consider buying in the same general area where you now live.

For more than 20 years, Berard has helped retirees sort through their housing options. And experience has taught him that most do best when they live within a 30-minute drive of their former home.

He says that retiring to a distant location can be an especially poor choice for those who are actively engaged in volunteer work with charitable or religious groups within the area where they've lived for many years.

"The odds are, you'll find retirement a lot more meaningful if you stay where you've built a strong support network of family and friends," Berard says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)