Question: We’re 62 with $1.4 in retirement savings. I want to sell our $610k beach house to retire this year. My wife wants to keep it and work until 70 to boost our savings. How do we resolve this?
Answer: Many people struggle to retire with a meaningful amount of savings. So if you’re 62 years old with $1.4 million socked away, you may be well ahead of your peers.
The average retirement savings for people in their early 60s was $537,560, based on the latest data from the Federal Reserve. That puts you and your wife well above average; your savings even surpass the $1.26 million most Americans say is the ideal amount to amass for a comfortable retirement.
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Still, you may not feel comfortable retiring at 62 with only $1.4 million saved. A beach house worth $610,000 that you own outright changes the numbers significantly, though.
Unloading that property could bring your nest egg just above the $2 million mark, allowing your savings to produce more income annually. Just as importantly, selling that second home allows you to unload what could be a tremendous expense.
It’s a good plan in theory, but what if your spouse isn’t on board?
If your wife would rather keep the home for convenience or sentimental reasons and work until 70 to boost your joint savings instead, you may have a conundrum on your hands. Here’s how to approach it.
Figure out if keeping the beach house is even feasible
You and your wife may have different preferences when it comes to retiring sooner versus later. But the discussion may not just boil down to “sell the house and retire versus keep the house and continue to work.”
As Cody Schuiteboer, president and CEO of Best Interest Financial, points out, it’s important to consider that a $1.4 million nest egg may not be able to maintain a beach house plus a primary home in retirement, even if you work until 70 and grow your savings over the next eight years.
“A $1.4 million nest egg supporting two households feels stretched,” he says. “It is especially insufficient to maintain dual properties, pay property taxes on both homes, and cover insurance and maintenance costs, which, for a beach property alone, can run $15,000 to $25,000 annually.”
Conceivably, working longer could grow that $1.4 million into a larger sum. But the incremental increase in savings may still not suffice in giving you the leeway to own two homes in retirement.
That said, the numbers look different if you’re willing to rent out the beach house for income.
“They could rent it through a property management company, which, in most coastal markets, typically provides 4 to 6% annual returns,” Schuiteboer explains. “That would result in gross rental income of $24,000 to $36,600 per year.”
Renting out the beach house might end up giving you the best of both worlds.
“I worked with a couple in Malibu who rented their secondary home for eight months, used it themselves for four months, and kept $28,000 in income, giving them lifestyle flexibility,” Schuiteboer says.
Run the numbers, then honor the meaning
It’s definitely important to ensure the math works in your favor if you’re going to keep your beach house. But Prudence Zhu, founder and CEO of Enso Financial, says it’s important to understand why keeping that second home is so important.
“Is this mostly about financial security, or about what the beach house symbolizes in their life together?” she says. “If you’d be just as happy renting a comparable place and investing the sale proceeds, you’re signaling a preference for flexibility and long‑term security over ownership.”
Zhu recommends working with a financial planner who can do side-by-side projections for different scenarios. So does Schuiteboer.
“This couple could engage a fee-only financial planner to develop a projection for three scenarios,” he says. “Retiring at 62 with the home sold and invested, retiring at 62 with the home kept as a rental, and working until 70 with the home.”
From there, Schuiteboer says, a professional can do some cash flow forecasting while considering factors such as Social Security, the timing of withdrawals from retirement accounts, increases in property taxes, and so forth.
Have an early retirement backup plan
It’s not unreasonable to want to work until age 70. But Zhu says that even if you’re willing to do that as a couple, so you can more comfortably keep the beach house, it’s important to have a backup plan.
“If the only way the plan succeeds is both spouses working until 70 at full income and perfect health, the plan is too fragile,” she insists. “It’s important to ask, ‘What if we had to stop at 65 — or 62?'”
This is yet another good reason to consult a professional, Zhu says. “A professional can model what happens if work stops earlier due to health, caregiving, or job loss and help design a Plan B that still preserves long-term security,” she explains.
Make the decision as partners
You and your spouse may not be on the same page with regard to selling the beach house and retiring versus keeping it and working longer. But Zhu says that as you explore your options, it’s important to approach things as partners, not “buyer versus seller.”
“I encourage couples to write down their top three values for retirement,” says Zhu. These may include things like freedom, stability, family time, and, yes, the ocean, she explains.
Then, she says, ask yourselves which solution ultimately fits the things you value most. You may find that you’re actually more on the same page than expected. And from there, you can make a decision together that you both end up comfortable with.
