The Finance Blogger

Seniors – Sell, Rent or Stay

March 21st, 2012 ernie Posted in Senior Living No Comments »

Seniors Sell Rent or StayMany seniors are in a dilemma these days about what to do! Should they stay in the home they have raised their kids in  and were they have many great memories of family life? Or should they sell their home and move into another place, that perhaps is on one level so there are no stairs to climb and costs less to maintain and operate? Or should they rent a place until they figure out what to do? These are just some of the questions many people are asking themselves and the answers are probably different for everyone depending on their personal situation, their finances and their health? We will try to explore some of these issues in this latest post.

Seniors Sell Rent or Stay

Staying in Your Home

By far the majority of seniors want to stay in the home that they have spent raising their families and the home that has great memories. A few will move, because their spouse has passed away and others because of bad neighbors etc. Familiarity is the key here and the older we get the less we want to deal with change. We like things to be the same and routine, which may sound boring, but that is just the way it is. Also it takes a lot of work to move , it is expensive and you probably have to throw a lot of stuff out that also has fond memories.

However there are some issues that you must be able to deal with if you are going to stay were you are. Maintenance on your home is one item that is very important if you are going to be comfortable and maintain the value of your home. Either you do it yourself or pay someone to do it.  The cost of maintenance can be difficult for seniors on a fixed income. If you have a larger home, it will take more energy to heat and cool it, as well as deal with the homes daily expenses. Build a budget and confirm that you can continue living were you are in the comfort that is acceptable to you!

Downsizing to a Smaller Single Story Home

Many seniors will downsize from a large home to a smaller one with the idea of saving money on taxes, on utility costs and the cost of maintaining the home. I have run a number of comparisons taking into account real estate costs, legal fees, moving costs and redecorating costs and for us it just does not make sense financially to down size! Compare the these costs for your situation and complete your own assessment before you make a decision to move to a smaller home!

Some times the decision to downsize is related to health issues. Perhaps you find it difficult to climb the stairs and are looking for a home that is on a single floor. Many people opt for bungalows, but then are faced with all of the extra costs mentioned above. For some installing a lift on the stairs would be a better cheaper option than moving! Evaluate this decision carefully before you make a decision.

Selling Your Home and Renting

One couple we know has sold their home and have decided to rent a town house. They claim that they just were not sure were to move to so they are going to rent for a while before buying another home. I think they decided to take the money they got from selling their home, have invested it and are using this income to augment their life style. They are on a fixed income and have been retired for many years. Their pensions are not indexed and with inflation are probably struggling to meet all of their expenses.

This could be a great way to live and have a a little more income to help you maintain a lifestyle that you enjoy. The danger here is the temptation to spend some of the capital and not just the income. Secondly, is the income you are generating from the sale of your home sufficient. Is there enough to pay the rent and still have some left over. Renting can be expensive too depending on were you live and how much you pay for rent. Again you need to do the math and determine if this option makes sense for you on a financial basis.

We would love to hear your comments and thoughts about these options. Perhaps there are other points that we did not identify that our readers would find interesting.

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Snow Birds and US Tax Issues

October 21st, 2011 ernie Posted in Senior Living No Comments »

Snow Birds and US tax issuesIn our last post we talked a little about tax issues for snow birds from Canada. These are people who spend a lot of time in the US to get away from the Canadian cold winters. Typically they will leave in Nov and return in April. They are spending as much as 180 days in the US enjoying the southern climate and warm temperatures that the US has to offer. The term snow birds also includes people who spend as little as one month in the US as well. So it is really anyone who heads south for some part of the winter.

The IRS has developed definitions and tests for assessing people in terms of residency. Most importantly whether they would qualify to pay taxes or not. Although it appears most Canadian snow birds would not fall under these definitions. It is a good idea to become aware of these tests. Make sure that you have taken the steps necessary to not qualify as a resident alien in the United States. The thing that many Canadians fail to think about is that once you are in the United states or any other country for that matter, you fall under their laws. It really does not matter whether you are Canadian or not.

Rules for Snow Birds

The following outlines the substantial presence test that the IRS applies:

  • If you were in the United States for 183 days or more in the current year, you meet the substantial presence test and are considered a resident alien of the United States.
  • If you were in the United States for between 31 and 182 days in the current year, you may meet the substantial presence test.
  • You were in the United States for less than 31 days in the current year, you don’t meet the substantial presence test, and are considered a non-resident alien of the United States.

Demonstrating a Closer Connection

Demonstrating that you are not a resident alien can be accomplished in a number of ways providing that you are prepared. Here are a few that seem to qualify:

  • Your tax home is in Canada. If you are not employed or self-employed, your tax home is where you regularly live, as shown by owning or renting a house, condo, apartment, or furnished room. Your Canadian home must be available to you continuously throughout the year at all times, and not just for the period that you are not in the United States.
  • If you are employed or self-employed, your tax home is the location of your principal place of business or employment, regardless of where you maintain your family home.
  • You had a closer connection to Canada than to the United States during the current year. Various factors demonstrate that you maintain more significant ties to Canada than the United States. These factors include the location of the following:
    • your permanent residence
    • your family
    • location of personal belongings, such as cars, furniture, clothing, and jewelry
    • your bank
    • where you carry on business (if applicable)
    • social, cultural, religious, or political organizations to which you belong or in which you participate
    • the jurisdiction where you vote
    • the jurisdiction where you hold a driver’s license.

If you are concerned about this issue or are being assessed as a resident alien, it is time to seek out an expert. Someone who can assess the details of your situation and outline what you need to do. This post is just a rough guideline. It should be considered an outline of the issue facing snow birds who are dealing with US tax issues.

Comments are welcome.


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Tax Issues for Snow Birds

October 7th, 2011 ernie Posted in Senior Living No Comments »

Tax Issues for Snow BirdsMost of us really do not give it much thought when we head off on vacation to the United States. We may have been going to the states for many years on the standard two week vacation to Florida, Texas, Arizona or California. We really not been concerned about any tax issues at all. The answer is that you have been right unless you purchased a property in the United States which will complicate matters significantly. This can cause Tax Issues for Snow Birds which you need to work through or face a huge tax bill. Personally we like to rent a condo or home rather than make a purchase. It is called freedom from a lot of issues, but there are advantages to owning as well.

Own vs. Rent

Now that you are older and retired, many people are extending their vacation in the warm south to anywhere from on month to as much as 6 months at a time to escape the cold winters. If you are staying that long, it begins to make sense to own a small condo or sometimes a trailer to live in instead of renting a place every time you head south. We fall into the category were we are just on the edge of it making sense to rent vs/ own. We head south every year for two to three months at a time with a number of other small two or three week vacations to various locations in the US.

Our personal philosophy, tax issues for snow birds aside, is that we do not want to be tied to one location. If I own a place somewhere as a vacation home, then I would want to spend a lot of time there to make use of my investment. Having it sit empty all of the time is not really what it is all about. My wife would not want to rent it out to anyone so I cannot really consider it to be an investment either. It really is a vacation home. As a result we decided not to purchase a place in the US preferring the freedom to be able to go to a variety of places while we travel the US and not need to support two places.

Tax Issues for Snow Birds

This removes one  area of tax issue for us as snow birds since we do not own a property in the states and will not need to be concerned about capital gains etc. The other major area is income tax. This is something that all snow birds should look into. If you plan to be in the United States for an extended period up to 180 days a year then you could become subject to income tax on all of your income and have to pay tax to the IRS. You need to be able to demonstrate that your home is in Canada and that you have not severed ties to Canada. How do you do that, well you should talk to an expert, but here is a short list of things to make sure that you do not give up:

  • Own or rent a home in Canada that is available to you upon your return
  • Pay taxes on this home
  • Have Canadian bank accounts
  • Pay federal and provincial income tax
  • Can show that this home in Canada is your permanent home
  • Have a provincial drivers license
  • Have a provincial health card

IRS Snowbird Tax Issues

While this may seem trivial, snowbirds traveling to the US should have evidence of these things with them. Or be able to get them to show US customs officials. There is a lot more detail to dig into , however the main issue is to be able to show that you are a non resident alien and do not fall under the IRS tax rules. If you are labeled a resident alien you could be forced to pay tax in the US to the IRS, which makes life a lot more complex.

If you plan to purchase a property in the US and / or spend a significant amount of time in the US it is definitely worth taking the time to understand these issues in more detail and complete your tax planning properly.


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Snow Birds Renting Long Term

September 21st, 2011 ernie Posted in Senior Living No Comments »

Snow Birds Renting Long TermrmA little while ago, we wrote a post about Snow Birds Renting Long Term Condos. This was a general post about retired people heading south for the winter. Perhaps renting a condo for a couple of months during the winter. We covered a lot of things that you may want to look out for. Especially if you want to ensure that you do not get ripped off or experience disappointment.

Snow Birds Renting Long Term

Some people will head south for the winter. Perhaps they have a work situation that requires them to live in a city for an extended period of time. Until a project is completed. They may want to rent a furnished apartment or condo for this period. Instead of living out of a hotel room which is much more confining and limiting. This is a great way to see a city by the way. Experience living in another culture without having to invest a lot of money. No furniture or even buying a home, condo or whatever is required.

Long Term Rentals

We have never rented on a long term basis for personal reasons. We have traveled on business and lived in a condo that was furnished for a period of 8 months. The condo came with 2 bedrooms, and all of the standard furniture and utensils. Everything that one would need to live comfortably. For short duration’s such as this, renting a furnished condo or home is by far the way to go.

We found that negotiation is everything when it comes to service as well as prices that we were paying. It is never too late to renegotiate the price you are paying for the condo. As long as you have a relatively open contract which we did. This same approach applies to snowbirds as well who are heading south for the winter for a period of 6 months. Although once you agree for a specific price etc, it can be difficult to renegotiate. Unless you are not receiving the services or conditions that you agreed to in the contract.

The key to any contract is to negotiate everything up front and make sure you have everything you want before you sign on the dotted line. Once you sign the owner is going to be unwilling in most cases to open the contract unless it is too his advantage.

Negotiate Rental Contracts

Read our other post about Snow Birds Renting Condos for some of the things to watch out for when you book your place. Note that since you are staying longer there is a better chance that you will be able to negotiate a lower price than you would for a shorter term contract as well. Sometimes you can save as much as 50% between a one month contract rental price and one that is for a period of 6 months.

It really depends on what the demand is and your negotiation skills. The same contract issues apply,  such as term, price, items in the condo, inventories, damages, services to be provided, pool availability and how you are supposed to leave the condo at the end of your stay. If there are damages or if it is very difficult to clean the unit after you leave, your deposit may not be refunded or you may be assessed an additional fee.

In addition, you may also not be invited or accepted back the following year. If you are concerned about any of these issues and cannot get out of the contract, take pictures of the condo when you first arrive to establish and inventory and to establish the cleanliness of the unit. Some landlords rely on the tenants to keep things clean and in most cases, tenants do not do a good job at this.

If you have comments about this subject feel free to leave them. We can all benefit from everyone’s experience.

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Snowbird Lifestyle Issues

September 7th, 2011 ernie Posted in Senior Living No Comments »

Many people are becoming snow birds these days, ourselves included, so we thought we would write about Snowbird Lifestyle Issues and ask readers to let us know about their experiences so that we can all improve our chances of enjoying our time away from the cold Canadian and Northern US winters.

Here are some of the major issues  that all snowbirds need to consider whether Snowbird Lifestyle Issuesyou are going away for a month or longer. Each situation will be different so we will keep this general so you can apply it to your personal situation. We will expand the list in more detail later in this post, however if we missed something, please leave us a comment and will be happy to add it at anytime. Here is our list for Snowbird Lifestyle Issues:

  • Home Maintenance While You are Away
  • Health Insurance ( Especially for Canadians)
  • Condo Rentals / Hotel Contracts
  • Car Contracts
  • Communications
  • Meeting other Snow Birds
  • Friends and Visitors While You are Away
  • Staying in Touch With Family
  • Emergency Situations

Snowbird Lifestyle Issues – Home Maintenance While You are Away

Always make sure that there is someone looking after your home or apartment while you are away.  Basic things such as security, picking up the mail and making sure the home is heated. Your insurance company may have specific things that you need to do to maintain your insurance. Check with them before you embark on your snow bird trip for the winter. Whoever is looking after your home needs to be able to get in touch with you and deal with any emergencies that may come up.

Health Insurance ( Especially for Canadians)

We all need health insurance, however it is a big issue for Canadians, since our health insurance does not begin to pay the costs involved when using foreign medical treatment. Investigate the coverage you need to have for your family while you are away and never travel without it.

Condo Rentals / Hotel Contracts

It is better to have a contract than none at all, however these things really do not protect you while in a foreign country. What are you going to do, sue them. It gets way too expensive, so you are better to dot the i’s and cross the t’s before you go. Rely on word of mouth and recommendations. Remember that pictures can be doctored and they are often taken when the property was pristine and do not reflect the way it is today. Many snowbirds have been ripped off in this manner or had to deal with inferior conditions.

Snowbird Lifestyle Issues to Consider

Car Contracts

Always set up your car contract before you arrive, so that you know there is a car waiting for you and you know the price. If you have to negotiate a contract in a foreign country you are clearly at a disadvantage.

Many snow birds will travel in their own cards. Always make sure you have sufficient insurance coverage for the country you are going to. Many will not insure your car for Mexico for example without a special rider being added.

It goes without saying, have your car fully maintained, good tires and anything that needs replacement before you go. A breakdown while on the road can be expensive.


Whether it is prepaid cell phone, your computer with Skype loaded or your current phone, always make sure you have sufficient communications to cover emergencies and so that someone can get in touch with you within a 24 hour period. A cell phone  is also handy to have for making arrangements, since many hotels and condos either charge an arm and a leg for the use of a phone or they simply do not provide service.

Meeting other Snow Birds

Be outgoing and ready to meet people along the way, however always be cautious too to avoid getting into situations that are not comfortable. You can have a lot of fun with new found friends.

Friends and Visitors While You are Away

Many people will want to visit for free, especially if you let them know you have the room. Advertise this fact carefully and to those people who you want to visit, especially if you have a hard time saying no. We found that the rule of a 5 pm happy hour is a great idea. The rest of the day everyone is on their own, but meeting at 5pm to visit and compare notes is a great way to set plans for the evening without feeling that you have to entertain someone all of the time.

Staying in Touch With Family

Stay in touch with the family especially the kids and grand kids. Use Skype video or some other similar product to talk to people for free and see them over the video service provided. Remember a computer to computer call over Skype is a free call.

Emergency Situations

This is the toughest thing to deal with. Obviously you cannot anticipate all situations, however you can ease the situation somewhat. Make sure that your spouse and your family members (those that you trust) have your itinerary, know how to get in touch, have access to your medical insurance, home insurance and car insurance policies. One call should be enough for someone to get into action to help you deal with whatever emergency comes up.

We have only covered the major Snowbird Lifestyle Issues that a snowbird traveler should consider. Take these and work out the details for your situation, and family to ensure that your long term vacation is a successful one.

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Snow Birds Renting Condos

July 21st, 2011 ernie Posted in Senior Living 1 Comment »

Snow Birds Renting Condos is a subject we are personally interested in. Since we regularly rent a vacation condo every year. It allows us to spend a month or more in a warm sunny climate. Millions of Americans and Canadians are itching to get away from the cold winters and dull skies every winter. They travel south and stay in everything from motels, hotels and rental condos. Many for periods of a couple of days to as much as 6 months at a time.

Snow Birds Renting Condos

There is always a danger when you book something over the phone or through the internet. Will you actually receive what you have contracted for, is there a contract and what are the conditions of the place you will be staying. Over the years we have been renting condos of this type we have had very good results, some better than others. However, we have heard and in a couple of cases seen what people have ended up with to their surprise and frustration.

Read Between the Lines

For many people who are excited about their upcoming vacation, there is a tendency to make assumptions about the place the go to. Pictures look great, description sounds great and friends have even stayed in the same complex in other years.  Yet when you arrive, the unit does not measure up and there is a lot of disappointment.

Here are a couple of examples that you may find interesting. Later we will give some suggestions about how to protect yourself from some of these situations.

Pool Not Heated

Who would ever expect that the pool would not be heated in the southern US during the month of March. The weather temperatures are in the 80’s and 90’s and yet the pool is not heated. The advertisement indicated that there was a pool and hot tub, for tenants to utilize, so would you not automatically expect a heated pool. Turns out they consider it to be winter and it is too expensive to heat the pool during the winter. What a huge disappointment and no recourse other than to never stay at this location again along with telling all of your friends! Here is a link to the place we rented in March, 2011 that had the unheated pool. Click Here!

Unit Not Clean

We have never had this issue, however several of our friends have had this unfortunate experience. Everything from dirty dishes, carpets and furniture that was in serious need of cleaning. Left with no choice, they are forced to buy cleaning supplies and clean the unit themselves to bring it up to their standards. This is clearly unacceptable, but what are you going to do in a foreign city or country with an absentee landlord and clearly unwilling to do anything about the situation.

Condo Not Well Equipped

Snow birds expect all of the basic amenities when they book a place and plan to stay there for the month. After all you are usually paying a lot of money, so flat screen TV’s, modern appliances, fully equipped kitchens  and all of the utensils and glassware are expected. Even a hair dryer should be available in the bathroom along with all linens and towels. All should be very clean and no marks or stains anywhere.

There is not much you can do if these things are missing, other than buy your own and try to get the landlord to pay for them. Once couple even went as far as buying dishes and a microwave for the unit they were renting. When they left, they stored these things with a friend rather than leave them with the cheap landlord. The place we rented in March 2011, did not even have wine glasses! here is the link. Click Here!

Read Your Contract, Ask Questions

There is not a lot you can do once you have paid your money and arrived. You can complain and maybe the landlord will do something. The time to make sure that everything that you are expecting will be included is before you sign the contract.

As we have experienced with the unheated pool, do not make assumptions. Confirm your assumptions and even have these things written into the contract to be sure that these items you have discussed will be included. Most landlord contracts are totally one sided to protect the landlord. They do not cover some of the things we have mentioned.

Pictures are not always accurate.

We have fond that pictures usually gloss over the details and do not portray how clean a unit really is. If there are pictures, do a quick inventory when you arrive to be sure that the items shown in the unit in the pictures are actually there so you will not be charged for them when you leave. You might even want to take your own video inventory just as a precaution.

Comments are welcome as are suggestions regarding on how to protect yourself when booking vacation rental locations. Our readers will appreciate any suggestions that you may have.

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Baby Boomers Supporting Parents and Kids

September 7th, 2010 ernie Posted in Senior Living No Comments »

Baby Boomers Supporting ParentsMany baby boomers are nearing retirement. They should be looking forward to enjoying a time of life that will allow them to enjoy their retirement years free of work and responsibilities. Yet many are finding that their decision to have kids late in life and parents living longer are putting them in a squeeze. They have to spend time supporting both their parents and their teenage children. Referred to as the sand which generation in many areas. Boomer parents on one side, the grand kids on the other and the kids in the middle. This can be a very stressful time for all concerned.

Retired and Supporting the Kids

We know of some parents who have in fact retired. They would like to travel and do all of the things that retired people are supposed to do. But cannot because they have children living with them at home and attending university. They need support both financial as well as emotionally as they make their way into adult hood. These parents made the decision many years ago that they would have their children later in life. So they could enjoy their younger years child free. There is nothing wrong with this decision. However like all decisions there are always consequences. One of the consequences of having children late in life. You need to support them will into your late 50’s and in some cases well into your 60’s.

Parents are also living longer as well. Many people can look forward to a life that takes them into their late 70’s or 80’s. There even seems to be more and more people living into their 90’s and over 100 years of age. Although many of us are living longer, for some of us, it means that we need support from our children and community agencies. This puts a lot of emotional and in some cases physical stress on our children who may still be managing their own families and their careers.

Monitoring Your Parents

Here are a few tips to help you keep tabs on your parents without being too intrusive, but allow you to know when help is needed.

  • Phone often, listen carefully for any issues that might be indicators of problems that your parents might be having.
  • Visit often as well and be observant. Are the dishes done, is their food in the fridge and the cupboards, is the house clean and the laundry completed. How is your parents hygiene?
  • Inquire about utility bills. Are they overdue?
  • Yard maintenance is a great indicator. Has the lawn been cut, weeds pulled etc
  • Listen carefully to your parents speech and watch for any indicators of confusion or forgetfulness.

These are a few areas that you can keep tabs on both remotely over the phone as well as during visits. If you are living far away and worry about your parents, set up a video connection using Skype or one of the various systems that are available. If your parents are unable to navigate this application, you may want to try other approaches to make sure you stay in touch.

Many parents will resist moving into an assisted living situation. They do not want to leave their homes and they are afraid of the unknown. If you are faced with this situation, you will want to tread very carefully. Many people find that their social life picks up when they move into an assisted living situation, however there are not so good places as well. Check them out carefully before you persuade your parents to move into an assisted living home. You do not want that kind of guilt on you to carry around knowing that your parents are unhappy.

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