Unsure where you want me to post questions . On this blog or to the email addresses in the help sections of PRC? I assume the forum so others can learn?
From the manual, after populating the fields from "Simplified Inputs : "… convince yourself that your data makes sense and that no errors are evident…"
What seems off to me is at age 74 when I entered "sell the house", results in $400K increase in the taxable account (and Total Savings) , both of which continue to grow until death, yet one must live somewhere (unless they rent) from ages 74-death/age 90? How do I reflect this? i.e. if I sell my house in 15 years at age 74, assuming I don’t rent, assuming I buy another place even if it I downsize, or if I go to some assisted living because my health tanked, etc?
I go to the Expense > Property : enter an expense in that FY? Probably won't be keen on taking on debt at age 74, so sell current house & buy new house in full/no mortgage, so enter that FY in the row "Lump Sum Early Payoff"? And how does one guesstimate that expense ( a smaller house in 15 years)? Scrolling down I see the "Personal Property Summary Table" where PRC calculated the cost of my current house 15 years hence, so I could use that as a guide for the cost of my future house. To be safe/conservative I could assume I sell the old house & buy the new place for the same amount I suppose, and I could run a second scenario where the new place costs 20% less etc .
And I assume scroll down & enter similar data for the "Annual Operating Costs" section
I will work hard to get up to speed by spending time in PRC Gold & on this forum.
Thank you .
Jo, this is the perfect place for this type of question!
I think the best way to reflect your lodging costs after selling the house is to make another entry in the Property expenses table. That could be a downsized house or an apartment, whatever. You'd enter the estimated cost in terms of today's dollars and the tool will use your inflation assumptions to project the costs out into future years. If you were to buy a new house, you'd just enter the acquisition year and current market value, and leave the fields associated with a mortgage blank (if you don't want any debt). Don't enter anything into the "Lump Sum Early Pay-off Year". The tool will model it such that you're paying cash for the new home and that'll be incorporated into annual cash flow calculations as a large one-time expense. If you buy the new house the same year you sell the old house, the tool will reconcile the income from the sale with the expense of the new purchase and you'll probably see a significant positive cash flow that year (assuming you're downsizing). Then scroll down and enter the annual operating costs such as real estate taxes, insurance, utilities and maintenance. The beauty of doing it this way is that these costs are only modeled during the years you own that second home.
Then, if a little further out in time you want to plan for living in an Assisted Living facility, you could model the sale of the second home and possibly just put the expenses associated with Assisted Living in the LTC section of the healthcare expenses page.
