Smart Money: Is it time to move to an apartment?
DEAR BRUCE: My problem is similar to many other senior citizens. Should we sell our house and move into an apartment? I’ll soon be 78. I received $804 in Social Security. My house is appraised at $50,000 and is paid for. I am a foster grandparent who works five to six hours a week and I receive a stipend of $2.65 an hour. I love this job. I am still able to do some things to my house, like painting, but I have someone else do the mowing. I enjoy my home, but wouldn’t object to apartment life. It definitely is a mental and financial problem. — D.F. Enid from Oklahoma
DEAR D.F. You use the term “we” on several occasions, I assume your spouse is still with us. It would appear you are living a bit close. You didn’t mention any other income other then Social Security and your stipend for being a foster grandparent. I’m glad you enjoy it and that you’ll continue as long as you can. It would seem to me if that income dries up, you are up the creek without the proverbial paddle. I might be inclined to start selling your home now.
Making the assumption your taxes, insurance, utilities, etc., that an apartment would reduce your outflow. Your $50,000 invested in various safe instruments is only going to generate around $2,000 a year. The key to this is going to be the cost of housing.
DEAR BRUCE: About four years ago, I was let go from my well-paying job. I ended up paying some of my mortgage payments with credit cards until I was able to sell the house at a minimum loss. I always used credit cards to supplement daily living expenses. Although I found work, my present career does not pay as well as my first, and although I keep up with my credit card payments I still carry more debt than I would like to.
About a month ago, I was laid off again and was taking some time to start my own business. I called one of my credit card companies to transfer a balance and the end result was that a credit analyst came on the phone and closed down both lines of credit based on my outstanding debt of $500 and the fact I could not report income. Now I’m concerned about my credit standing. The accounts are not closed, just frozen and I can’t use them. How will this affect my future credit rating? — J.S. Las Vegas, Nev.
DEAR J.S.: It’s clear you shot yourself in the foot. You called them and told them you were out of work and starting your own business, which technically you are supposed to do, but in reality no one does. They immediately said they are not going to extend any more credit to you, which is understandable. Whether they will report this to an agency such as Experian, I don’t know. Going into business yourself always weakens your credit for a few years for obvious reasons. This is another case of giving too much information gratuitously, and now you’re going to pay for it. Good luck with your new enterprise.