Retiring Soon? Consider This…

Filed under: Retirement

When your parents and grandparents retired, they might have done so in the family home, which they paid off years before retirement. Home ownership, and freedom from a mortgage, were once considered staples of the American retirement dream.

Nowadays, many retirees are indeed living without a mortgage – because they choose to rent instead. This might sound like a strange concept, but it’s a path that can actually carry many surprising benefits.

You could be free from maintenance and upkeep costs. As you might already know, home ownership is expensive. Homeowners association fees, property taxes, repairs, and other maintenance costs can eat a huge hole in your budget. These items could feel burdensome in retirement, especially when large surprise expenses pop up. When you rent, you pay one fixed monthly amount to a landlord, who is responsible for all other costs of maintaining the home.

Your equity could offer greater financial freedom. If your home has increased in value, or you have paid down the mortgage, cashing out the equity could give your retirement savings a much-needed boost.

You could enjoy more freedom. You might decide to travel in retirement, in which case a home is more of a burden than a benefit. Some couples even choose to live in a few different places before settling on a final retirement destination. That’s much easier to do, when you don’t have to sell a home each time!

Give a new place a test run. Maybe you’ve always dreamed of moving to the beach or mountains… but what if you purchase a home in that location, only to discover later that you don’t really love it? When you rent, you can give your plans a test run before investing in a new home.

Selling your home later could prove to be a burden. At some point, you might decide (or need) to move to a nursing facility or senior living center. At that point, selling your home could be a burdensome task that you must pass off to your spouse or children. Selling it now frees you up to make simpler decisions in the future.

As you can see, there are plenty of great reasons to rent your home in retirement. But there are still solid reasons for staying in your current home. Since housing is likely to be your largest expense during retirement, this is a decision to way carefully. For more information on how your retirement budget could be impacted, call us to schedule a consultation. We can help you make the decision that is right for you.