Smartest Money Moves at Any Age
From first job to retirement, we tell you how to manage a dozen events that can change your life.
From Kiplinger's Personal Finance magazine, July 2005
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Empty nest? Spread your wings
Two years ago, Debby Nolan looked around the library in Maplewood, N.J., and realized "there were people in there with little kids, but the people I knew were gone." Nolan and her husband, Frank, had raised their children -- Frank, Sarah and Nora -- in Maplewood, a leafy enclave west of New York City. Now, she says, with the kids grown and a new generation coming along, "I thought maybe it was time to move."
Meanwhile, Frank, 55, was eager to act on the couple's longtime dream of buying a weekend house. So they traded their suburban home, where they had lived for 23 years, for a one-bedroom pied-à-terre rental on Park Avenue in Manhattan and a six-bedroom Greek Revival house on 70 acres of farmland in upstate New York.
While they were at it, they splurged on a 2002 Chrysler convertible and spiffy new furniture for the city pad. Says Debby, "Part of the fun was buying all this new stuff. We had a budget, but we ignored it."
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Like many empty-nesters, the Nolans financed the next phase of their life by cashing in on the previous phase. They cleared $500,000 on the sale of their Maplewood house and used part of that as a down payment on the country home, which they purchased for $750,000. They also allocated $35,000 to upgrade the heating system in the circa-1850 structure. In the city, they pay $2,900 a month in rent, plus $460 to house the convertible.
All told, the Nolans have a slightly higher cost of living than they did in Maplewood. But they also have more money to work with. Property taxes for the country place run about $6,000 a year, almost $14,000 less than on their suburban home. Frank, a partner in a New York City law firm, recently scored a pay increase. In May, twins Sarah and Nora graduated from college, freeing the couple from tuition payments for the first time in seven years. The Nolans figure they'll have no trouble paying off their new mortgage by the time Frank retires in about ten years.
Meanwhile, they're having the time of their lives, enjoying museums, the theater and more dinners out than they care to acknowledge, says Frank. "There must be 200 restaurants within a ten-block radius." Frank now walks to work. Debby, who is one of New Jersey's deputy attorneys general, commutes by train, and comes home to enjoy a glass of wine with her husband on their tiny terrace. "We feel as if we're playing," she says.
The country life is sweet, too. The Nolans hunt, fish and garden, or just ramble about their property, which includes two barns and a half-mile of creek frontage. Says Frank, "Our neighbor just came by to thank us for letting him tap our trees, and to give us some fresh maple syrup."
Any regrets? "I can't think of one," says Frank. "We were confident that we'd either make it or be satisfied that we took the chance." -- Jane Bennett Clark