Smart Moves by Ellen James Martin

How to Tackle Second-Marriage House Woes

All over America, young adults living in cramped apartments ache to buy an affordable property of their own with more square footage. Meanwhile, at the opposite end of the age spectrum, many older homeowners are saddled with too much real estate. That’s especially true for older couples entering a second marriage who possess two properties and are stumped on how to proceed.

Michael Knight, a certified financial planner has helped a number of remarrying couples sort through such issues. Some of the toughest decisions aren’t always financial.

“There are also big territorial issues involved,” says Knight, explaining that each partner may be fearful of moving onto the other’s turf.

Here are a few pointers for homeowners entering a second marriage:

-- Take all the time you need to talk through the issues.

People who marry for the second time often have many years of independent living behind them. They’ve been free to make their own decisions without discussion. This makes it all the more imperative that when facing a major housing choice, couples discuss it thoroughly.

“They need to take a clean piece of paper and list their own individual requirements, putting these in priority order. Then they should interview each other and ask why each item is important,” says Knight, who’s affiliated with the National Association of Personal Financial Advisors (napfa.org).

If such a dialogue fails to yield answers, the couple might consider consulting a financial adviser for a few hours. The adviser can serve as a catalyst -- helping direct the conversation in a way that yields workable answers for both husband and wife.

“There’s a benefit to third-party objectivity,” Knight says.

-- Carefully consider your preferences on location.

In their new lives as remarried empty nesters, older couples have greater latitude to alter their housing than they did when their children were young. They don’t need to worry about access to quality schools or soccer fields for their kids.

“Needs change. At this stage, some couples want to move to areas with a rural feel. Others wish to move closer to a city where cultural options are plentiful,” says Dorcas Helfant, a former president of the National Association of Realtors (realtor.org).

One way to approach the topic of where best to live, she says, is to visualize what you’d be doing during an ideal day, week and month. Would you rather be tending a magnificent rose garden or dining at a fine restaurant?

By listing your favorite activities, you’ll get a feel for the sort of location that would best suit you and your partner in coming years.

-- Keep an open mind about the ideal size for a home.

Smaller is beautiful for some couples, who’d just as soon shed the lawn work and other upkeep they’ve endured for years. Yet other couples can’t wait to buy a property even larger than the combined square footage of their two current houses.

Those dreaming of foreign travel might willingly give up the prestige of a large suburban home; they’d rather own a brand-new townhouse with no upkeep worries. Or the opposite might be true.

“Assuming money allows, midlife could be the first time you feel prosperous enough to realize your lifelong dream of owning that 5,000-square-foot house,” Helfant says.

But again, reconciling your wants and needs with those of the other partner should help you determine the right answer.

-- Factor retirement planning into your housing decisions.

It’s no secret that many people have saved little for retirement. Likewise, it’s hardly a surprise that financial planners such as Knight caution against taking on larger mortgage payments until you’ve put away enough to fund retirement.

How do you know if you and your partner have amassed sufficient money to retire? Answering this question requires thorough analysis. You’ll need to estimate your expected life spans, the years you plan to spend in retirement and how much you’ll need each year. For example, a couple who intends to travel abroad will likely need more money than one who favors bowling as a hobby.

“Your core spending rate per year is driven by your lifestyle. Without doing the numbers, it’s hard to know if you’ll need $4,000 a month or $10,000,” Knight says.

To help get a handle on your financial needs in retirement, you can use the free retirement planning calculators now widely available on the internet. Many advisers recommend the retirement toolkits offered by the U.S. Department of Labor (dol.gov).

-- Don’t rule out selling both your houses and buying a third.

For the man and woman marrying for a second time, there are often uncomfortable feelings related to moving into the other’s place, where the presence of a former spouse could loom large.

For many two-home couples launching into a new marriage, the notion of selling both their properties and starting fresh with a different place is appealing.

“Unless there’s a compelling reason not to, I’d buy or rent a third property and sell the other two houses,” Knight says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)