I’m 72, have $3 million in savings, and want to live with my son when he’s married with children. Can I afford two apartments?

Dear MarketWatch, 

I am 72 with total assets of $3 million. I was a single mother, and my son is now 26, works for the government and has a serious girlfriend. I stay with my son when I visit him, although I hate D.C., and I miss him when I am in my apartment in Southern California too long. 

When he moves in with his girlfriend, I have to get my own apartment for a minimum of $30,000 a year. I’m worried that won’t leave me money for a place somewhere else, if not Southern California, perhaps Florida, which is closer, for another $30,000. I am in decent health, although I have arthritis. I work out a lot and eat healthy. I hope I will be able to help with grandkids although I will be so old, I will want to help as much as I can. 

Can I afford two apartments? I wish I could live in a ‘mother-in-law’ apartment with them someday if they move to D.C.’s suburbs, but not in the near future, unfortunately. 

See: We’re in our 70s, have $1.3 million in IRAs and $1.15 million in cash. But we have ‘no clue’ what to do with the money. 

Dear Reader,

There are a lot of moving parts to this letter, but if your goal is to be in two places, it’s possible — with a lot of planning. What you really need to do right now is get serious about your plans and start mapping them out, regardless if your son is married yet. 

For example, you say you want to live with your son and his future wife, and help raise the grandkids — is that on a full-time basis? Or are you hoping to split your time in the future, whether you have grandchildren or not? There’s no wrong answer here — many people don’t live right next to their relatives, and others enjoy living in one spot half the year and another for the second half. 

Before you get too invested in the idea of living with your son and his future family, you should find out what they might want. Many families live with multiple generations, so that’s certainly not unheard of, but if you have the assets to live on your own and nearby, what would all parties involved appreciate the most?

What would the living arrangements be like, and the financials, too? It isn’t clear how serious your son and his girlfriend are, so having these conversations with both of them may be premature, but you can try to discuss these ideas with your son while you’re figuring out your own plans. Just make sure you cover all of your ground. 

Income versus liabilities

There are so many factors that go into whether or not you can afford two apartments. And you won’t be able to do the real financial planning until you have some clearer answers. But you can start mapping out your visions for your retirement. Get a notebook or a spreadsheet and list all of your income — Social Security, any pensions, your current withdrawals from retirement assets and whatever else. Then look at your liabilities, which includes any debt payments, as well as current expenses for renting or owning a home (the rent or mortgage itself, utilities, taxes, and insurance, to name a few). What does your cash inflow and outflow look like, and how does it change as you alter the variables for incorporating two apartments? 

Do this research with an open mind. For example, you’re looking to have an apartment for around $30,000 in each area, which comes out to around $2,500 a month (times two). That can, of course, be in the form of renting or a mortgage. Would you want to do both — owning one home, perhaps in the “main” area you want to be, near your family, and then renting another for a few months of the year, in a warm climate like California or Florida? (If you do wish to have a tax domicile: Florida has no state income tax.) 

Equity versus flexibility

If you were to own one home, you’d preserve some of your assets by investing in real estate. Not everyone wants to own, but it is equity you could tap into in your older age, or leave as an inheritance for your family. And if you rented somewhere a few months out of the year, even during the winter months, you wouldn’t need to sign a lease, which could tie up your money for a year or more. You’d have more flexibility, and you wouldn’t have to worry about subletting, either. 

Either way, start tracking the costs of both rents and homes in your points of interest. Go on real estate sites like Realtor, Redfin

and Zillow

and get average prices for the types of places you’re looking for, as well as the sales history of the area to see how prices have inflated through the years. If you’re not looking to buy or rent in two spots right away, these figures will likely fluctuate (upward) but at least you have an idea of the markets you’re interested in. That will help you make informed decisions, and you’ll have a better idea if you really want to be in two places (or not). 

Throughout all of this planning, think carefully about the other expenses you’ll have — healthcare (a huge expense), groceries, taxes, travel (especially if you’re going back and forth from either side of the country) and so on. 

It is wonderful that you’re healthy overall and that you want to be there for your son and his future family. Being open with him about these ideas may actually give you a better idea of how to properly plan for the future.

Also see: ‘I’m hoping to remain in my home’: I’m 76 with no relatives. What should I do with my estate?

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