Courtesy 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.
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.