Question: “I need to get my head screwed on correctly. I am 65 and on Social Security. My wife is 64 and is still working. I get my health coverage from my wife’s job. We are going to be retiring in Colorado, but we are having a hard time deciding when because we want to have her job listed on the mortgage application. When should we move? And should we hire a financial adviser to help us?” (Looking for a new financial adviser too? This free tool from our partner SmartAsset can match you to fiduciary advisers.)
Answer: A financial adviser absolutely could help you “get your head screwed on correctly” as you put it. And you might also need someone like a mortgage broker as well. But before we dive into that, let’s talk about some of the issues you face.
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First, getting a mortgage. “Having a steady income, such as your wife’s job, can strengthen your mortgage application. Typically, lenders prefer applicants with stable income sources, so if your wife is currently working, it could be advantageous to apply for the mortgage while she’s still employed,” says certified financial planner Ryan Haiss at Flynn Zito Capital Management.
Deciding when you move is largely up to you, though experts unanimously agree that having your wife’s income when qualifying for a loan will help with the pre-qualification process. As for when you physically decide to move, that’s a more personal decision.
Taxes are another potential hiccup. “You’ll have some tax considerations when moving states. Choices like selling investments, pulling from retirement accounts and even your insurance needs can vary from state to state. Depending on where you’re coming from, the timing can be very important and you should talk to a professional,” says Colorado-based certified financial planner Robert Persichitte at Delagify.
At the end of the day, the question you’re trying to answer is where you have enough money to retire comfortably. “This is a difficult question to answer. You need to consider your income streams in retirement and how much you’ll need. Unless you have some strong planning experience, this is a question for a financial adviser,” says Persichitte. (Looking for a new financial adviser too? This free tool from our partner SmartAsset can match you to fiduciary advisers.)
How can a financial adviser or mortgage broker help?
Some questions an adviser could help you answer include: “When does your wife plan to stop working? If before 65, how will you pay for medical insurance before she qualifies for Medicare? When does she plan to take Social Security? Delaying to 70 can significantly increase the amount she receives. How much mortgage are you taking and how much can you afford? Will you be selling assets to help generate a down payment? Can you afford the mortgage once she’s no longer working?” says certified financial planner Lauren Lindsay at Beacon Financial Planning.
Sometimes, when you feel doubts about a financial aspect of your life, it’s because you recognize that there may be many variables that you aren’t taking into account or simply don’t know.
“When we talk about retirement, mistakes can cost a lot. Therefore, always having the expertise of a professional who continually receives cases like yours, who has the software tools that allow them to run different scenarios for you, will always make sense, even if just to give you peace of mind in validating that you are taking the right actions,” says certified financial planner Alonso Rodriguez Segarra at Advise Financial.
When working with a certified financial planner, they’ll help you determine how to prepare for the down payment on your retirement home and which loan structure is most appropriate, says certified financial planner Marguerita Cheng at Blue Ocean Global Wealth.
“Once you determine the most appropriate loan structure, you can collaborate with a qualified lending professional to ensure that both your short-term and long-term financial goals are incorporated into your financial plan,” says Cheng.
Indeed, pros say you may want to consult with a mortgage broker. “They can provide insight into what you might be approved for based on different scenarios, such as your wife working versus her retiring,” says Haiss.
If you’re planning to sell a property and pay cash for your new home in Colorado, this could simplify the process significantly, as you wouldn’t need a mortgage. “This is another aspect to discuss with your mortgage broker to understand the potential benefits and drawbacks,” says Haiss.
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