July 12, 2019

What to Look for in a Home After Retirement

Filed under: Boomer,Real Estate,Retirement,Senior Housing,Taxes — Tags: , — seniorlivingguide @ 10:27 am

Real Estate After RetirementCourtesy of Anita Ginsburg 

You’ve waited for what seems like a whole lifetime to retire. You’ve pinched your pennies and are now ready to enjoy this new chapter of your life. However, buying a new home after retirement isn’t the same as buying your first home. Depending on your financial situation, it can feel impossible to finance an investment this big at this point in your life.

To make the best decision for you and your budget, read on to learn about the most important points to consider when buying a home after retirement.

Location Matters

When it comes to real estate, there is one thing that everyone thinks about: location. People who are older need to carefully consider where they want to buy their retirement home. Although a sunny area may sound good on paper, it might not be your kind of paradise for the long-term. Consider important factors such as the climate, cost of living, crime rates and access to resources before you decide on a location.

Elderly people’s homes are often prime targets for break-ins, so you want to make sure that the security in your neighborhood is safe.

Also consider the average age of the members of your new neighborhood and if there is a strong senior citizen community that you’ll be able to take part in. Staying social after retirement is an important part of health and wellness, especially if you’re considering relocating to a new state or a new country. Make sure that you choose a destination that is as practical as it is alluring.

Pick a Home That’s Right for Aging

Purchasing a multi-level home is not ideal as you get on in years. It’s a good idea to plan ahead and accommodate your changing body over the next several decades. Amenities like a walk-in shower, easy wheelchair access and no staircases are all good criteria to consider. You may want to look for ranch-style homes that offer a wide layout with everything on the same floor.

You should also consider the size of the land you purchase. Having a small garden may be nice, but caring for excessive land can be a hassle, especially as you age. Ask yourself if the landscaping is something that you will be able to manage as you get older, or if the space will fall into disrepair or become too expensive to maintain.

Don’t Put All of Your Money into the House

Many financial planners highly recommend that you don’t pay for a new retirement home with cash. Instead, use your money for a down payment and take out a mortgage. Your retirement savings have to be evenly distributed, so you shouldn’t spend every penny you’ve saved over the course of decades to buy a house.

If your current home has equity, check whether or not you can apply that to the purchase of your retirement home. Discuss your options for payment with a real estate office in your desired location; offices have qualified, experienced agents whose job is to make sure you not only find your dream home but also get the best deal for your money.

Keep Taxes in Mind

Before even thinking of moving to a new location, you must consider how much you’re going to pay in taxes. Take a look at the sales tax, real estate tax and your retirement income before deciding on a new home. You should also consider how taxes after retirement will affect your life. Taxes taken from your pension, social security benefits and your 401k may be more than you imagined.

Draw up a retirement budget that takes taxes into consideration so you have a realistic perspective of how much you can afford for a retirement home and daily living.

The Bottom Line

Regardless of age, buying a new home is difficult. Working with a real estate agent will make the process much easier, especially if you’re moving to a brand new location. The home you choose to retire in will probably be where you live for the rest of your life, so don’t worry about rushing into the first decent property you see. Take your time, lay out your finances and consider a home that you can see yourself in for many years to come.

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April 4, 2018

Assisted Living Tax Deductions Simplified!

Filed under: Elder Law Attorney,Seniors,Taxes — seniorlivingguide @ 11:24 am

By: Darleen Mahoney

In honor of the month that can be very tax focused if you are the last minute, down to the wire, can’t find all of your receipts, but are determined to get all the deductibles allowed by law like me. I am going to share one tax deduction that you may not know is available! Its an important one, as you know assisted living costs continue to rise every year. These costs can be very stressful on you or your family members. Did you know that some of these costs may be tax deductible?

The criteria for the tax deduction is that the resident in assisted living must be considered “chronically ill”, meaning a doctor or nurse has certified that the resident either:

  • Is unable to perform on their own two daily activities. Ex: eating, bathing, dressing, etc.
  • Diagnosed with a cognitive impairment, (Alzheimer’s disease, dementia, etc) and requires supervision

You may ask what do you mean, “certified”? To qualify for the deduction, a doctor, a nurse, or social worker must prescribe a plan of care and certify the plan. Luckily, most assisted living facilities offer and can prepare this for their residents within the guidelines required.

How these costs are determined to be tax deductible are based on medical expenses and long-term care expenses. Typically, only the medical expenses of assisted living are deductible and living costs are not. However, there are exceptions. The exceptiontax deductions for seniors to this may if the resident is chronically ill and the facility is primarily for their medical care and is part of the residents certified care plan, then it may be tax deductive, much like a hospital vs. a home environment.  The tax deduction is calculated based if expenses are more than 7.5 percent of the adjusted gross income.

There is also an opportunity for Adult children to receive a tax deduction if their parents or other family members live at an assisted living facility and qualify as their dependents.  The adult child may be eligible for this deduction even if it is less than half of the total support according to a “multiple support agreement.” The adult child is required to pay more than 10 percent of the total support for the year. There are variables to this agreement and I would recommend speaking to professional counsel such as, a Elder Law Attorney/Tax Consultant to make sure that you are meeting all legal obligations before taking the tax deduction as there may be multiple parties on this agreement.

I always recommend if you have complicated tax planning have questions about your taxes, seek professional advice. Asking for a reference from a trusted family member or friend is a great start to a Elder Law Attorney or Tax Advisor, www.superlawyers.com  have highly rated lawyers to refer online.

If you have uncomplicated quick question about tax deductions, you may want to visit online resources such as Intuit.com https://ttlc.intuit.com/questions/3612566-how-do-you-determine-what-portion-of-assisted-living-is-deductible-and-what-is-not-is-this-provided-by-the-facility

Getting the most out of your tax deductions doesn’t have to be complicated if you know what you qualify for and you utilize your resources.

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