Congratulations on paying off your house before retiring! It’s a huge milestone. But will that house continue serving you through your retirement years?
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Retirement and financial experts urge you to ask these four questions to make the best housing decision for your personal needs.
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What Future Costs Will Your House Require?
Some newer houses require little maintenance work. Others require five figures in upkeep costs every year.
Financial planner Nancy Butler of AboveAllElse.org urged homeowners entering retirement to ask themselves some direct questions. “If the cost of property tax and other costs to live in the home were to increase, could you still afford to live there? How long will it be before the home needs major repairs such as a new roof, appliances, and so on? Would you be able to live in your home comfortably with only minor upgrades if you could no longer manage stairs or needed ambulatory assistance?”
Don’t ignore yardwork and exterior maintenance, either. If you or your spouse currently does the maintenance work, the time may come when that’s no longer practical.
Also factor in condo fees and homeowners insurance premiums as you map out your likely future costs.
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Does It Make More Sense To Downsize?
Most retirees don’t need a three- or four-bedroom house. It simply adds more house to maintain, to heat, to cool, to power.
Condos, townhomes, or smaller single-family homes typically require far less upkeep. They also cost less to own and maintain across the board.
Even so, downsizing should fit into your larger plan for where you want to spend the rest of your life. John Enwere, certified nursing assistant and founder of senior care startup Caringene, presses retirees to think holistically about their retirement housing. “Downsizing isn’t just about the money; it’s about the quality of life. Yes, you may walk away with $300K to $500K in cash, but where are you going? Will downsizing create a sense of isolation, or put you closer to your family and friends?”
What’s Your Housing Plan as You Age?
Your current home may — or may not — make a good home for aging in place. An ideal home for aging in place allows for single-story living with no required stairs. It also sits in a walkable area, where you don’t need to drive to reach groceries, restaurants and other amenities.
Most retirees also want to live as close to friends and family as possible. All of these factors go into choosing your “forever home,” or looking into assisted living communities.
“A newer home that has only one floor, or an assisted living facility or other senior housing may make the most sense,” added Butler. “Moving to a home suitable for aging in place can help you maintain your independence longer.”
In fact, she herself strategically downsized when she retired to let her age in place. “Our home was in great shape, but it required taking stairs both inside and out. We sold the house, and designed and built a single-story house less than a mile away where we can live for the rest of our lives. If we did not do it ourselves now, it may be someone else making those decisions for us later.”
Can Your Current Nest Egg Cover Your Future Expenses?
Sit down with a financial planner to discuss whether your retirement savings can cover your costs in the years to come. You may not have a choice in selling and relocating.
“If you live in an area with high home prices, selling your home and moving somewhere less expensive can boost your retirement savings,” noted financial expert Melanie Musson with Quote.com. “It can instantly lift your investment portfolio, and potentially generate enough income for you to retire in a lower-cost area.”
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This article originally appeared on GOBankingRates.com: Home Paid Off and Ready To Retire — 4 Questions From Experts To Decide if You Should Stay or Sell
