You’re leaving the workforce behind and getting ready to enjoy your golden years. But in addition to sun, golf, travel, and spending time with grandkids, where you live is an important factor in planning out your retirement.
Downsizing your home may be in the cards for your at this time in your life. This decision brings up many questions: Should you stay in town or move to your favorite vacation spot? How can you determine your retirement income accurately? How will your home needs change as you age?
Before you stick a “For Sale” sign in your front yard and hop on a plane to buy a condo three states away, give serious thought to your plans. Follow these important tips to help you buy your perfect home in retirement.
Work Out A Realistic Retirement Budget
You can’t move forward with your retirement planning until you have a handle on your budget. Look at your finances including your savings and investments, your bills and debt, and any upcoming expenses like children’s weddings, education, or replacing your old vehicle. Work out what you will need to be able to live every month. You should consider speaking with a retirement planning expert to assist you in developing a workable budget during your retirement. Knowing how much you can comfortably spend on a new home keeps you from getting into trouble with buying something that’s too expensive and then being forced to scrimp on other activities you were looking forward to.
Choose Your Space to Accommodate Your Age
You have many good years ahead to enjoy life. Downsizing your home, or even moving to another city, sounds exciting. Don’t get caught up in the whirlwind of planning your retirement and overlook important features that your new place needs to offer. Navigating steps ends up being challenging as we age, so put a priority on a one-story house or building. Make sure multi-story buildings have elevators. Look for properties that offer wide doorways in case you ever need to use a walker or wheelchair. Since bathtubs are one of the main areas where people slip and fall, find a property that either has a step-in shower or offers a space where a bath could be converted to one. No, these aren’t fun things to think about, but they are practical considerations that will hopefully keep you independent and injury-free for years to come.
Consider A Mortgage Instead of Cash
It may be tempting to take part of your nest egg and buy your next home with cash, so you’ll be debt-free. However, this may not be the best option for homebuyers later in life. Talk with an experienced mortgage originator to see what is recommended. If your credit score is high and you can secure a loan with a low interest rate, you may be better off with a mortgage. Also, if your retirement income is substantial, a mortgage can offer certain tax savings.
If you’re thinking of moving away from your current location, perhaps to a beach or mountain town, you need to…
Visit for An Extended Period
A long weekend or even a week of vacation doesn’t give you an accurate picture of how it would be to live there. Before you buy, take a month or more and rent a condo or cabin in the area. Issues that didn’t bother you during your shorter vacations, like lack of a good grocery store or too much tourist traffic, may drive you bananas after a few weeks. It is better to find these drawbacks out before you purchase a home in the area.
Research Local Taxes, HOAs, and Other Expenses
If you’re planning on relocating in retirement, the price of your new property is only one of several expenses you should think about. The local and state taxes may be much more than you’re currently paying. If you’re thinking about a condo or a housing community, the Home Owner’s Association (HOA) fees may be several hundred dollars a month. Your property insurance premiums, especially if you’re looking at a beach town prone to hurricanes, may skyrocket compared to your current home. Thoroughly research these costs and add them into your total housing budget before buying a home in a new location.
Related Read: 10 Things You Can Do to Save on Home Insurance
Talk to Several Retirees
A new place may seem to be perfect for you, but it pays to get first-hand opinions from other people who have already done what you’re thinking about doing. Meet some retirees who are living where you’re thinking about moving. Ask them how long they’ve been there, what they like best about it, and what they would change if they could. Their answers may give you confidence to proceed with the move, or they may sway you to change your mind completely. Be sure to talk to more than one person to get a clear and unbiased picture.
Finally, perhaps the most important retirement tip is…
Work Your Family and Friends Into the Decision
Moving to your favorite vacation spot may seem romantic and enticing, but what about your family and friends? Are you comfortable moving away from your support system? Will you miss being around for your grandchildren’s milestones? If you have a strong network of people close to your current home, make sure you want to move away from them before you sell your home and buy a new one. Perhaps wintering in your favorite place and staying put the rest of the year is the best option.
Moving into retirement offers exciting life options, and you should take full advantage. It pays, however, to think about home buying and to consider the reality of how happy you would be with making the change. By planning your budget, talking with those who have made the move, and thinking about friends and family, you will be able to reach a decision that you will be happy with now and down the road.
Related Read: How to Say Goodbye to Your Old Home