Buying a House When Retired
Are you thinking about buying a retirement house?
Many people consider buying a home specifically for retirement.
After all, your needs and desires for a house can be much different at 60 than they were at 30.
The kids are gone, you may not want to walk up and down the stairs forever, and you may want to live somewhere you have always dreamed of. What better time to make a change than when you retire?
While it can be exciting to consider such a significant change, paying attention to what you are doing as you purchase your retirement home is essential.
You want to get this right.
Fortunately, with the help of an experienced real estate agent and a little homework, you can confidently move forward.
One of the first things people often ask themselves is how to downsize from their current home. The answer can vary from person to person. Look at the reference for guidance in making sound decisions.
Keep reading for some of my best tips for buying a house after retirement that will work best for your circumstances.
What is a Retirement House?
A “retire house” is a property where you will reside when you’re no longer working. It is also a residence designed to accommodate those in their retirement years. There are many considerations when choosing retirement housing.
Retirement at home should be under circumstances you enjoy. It magnifies the importance of making intelligent choices.
Whether your retirement house fits the bill could come down to proper planning.
When Should You Purchase a Retirement Home?
When you should buy a retirement house is a personal choice. It could be right before you retire or during your retirement years. There are no rules.
Buying a House Before Retirement
Depending on your finances, buying a house before retirement could be the wisest choice.
You may find that it’s far less challenging to get a mortgage when you still have a job vs. being unemployed. Getting a home loan is difficult when you’re not employed. Qualifying for a mortgage may be impossible without a steady income.
You’ll also have a steady income to pay for all the associated housing costs while still employed. For example, the tax assessment and all the home maintenance costs.
When you still have another primary residence, you might also consider renting the house to make some income.
Buying a House After You Retire
On the other hand, delaying purchasing your retirement residence until after retirement might make sense. Purchasing an additional house too early could cause a delay in your planned retirement date as it will add financial strain that could impede savings efforts.
You should also bear in mind that, once you retire, your requirements will likely be different than before retirement.
Despite your youthful enthusiasm for possibly eschewing any need for fewer stairs, proximity to health care services, or other considerations, you may not be anticipating their significance once the time comes when you begin to contemplate retirement.
If you are indecisive about where to reside, it might be prudent to delay making a life-altering purchase until your plans become more concrete.
1. Pick a Retirement House Location That Will Work Well
As you age, it is going to be more challenging to get around. Eventually, driving will not be an option. So you want to pick a location that will give you easy access to the things you care about.
Rural locations may be fine if you are close to friends and family, but city locations are often easier to get around in. Also, consider what activities you enjoy the most and try to make them easy to access.
One of the things I’m often mentioning to people is thinking about how to pick a neighborhood you will love. What you have to figure out is what are must-haves.
Do you want to be close to the beach, a golf course, or enjoy another hobby? Consider the drive time when picking a place for your retirement home.
Location is a critical factor when choosing a retirement home!Click To Tweet2. Single-Story Homes Are Ideal Retirement Houses.
No matter how health-conscious you are, there will come a point when going up and down a staircase is no fun. And in the unfortunate situation where someone is in a wheelchair, stairs become a much bigger problem.
Even a single step can make getting around the home challenging, depending on your circumstances.
If you’re considering buying new construction, you might even want to plan for more popular handicap features, such as wider doorways and walk-in showers.
Keep in mind the type of space you are looking for. For example, will your children or grandchildren be regular visitors? If so, you should consider having an area set aside for them.
3. Do Your Research About Retirement Communities.
If you find the idea of living in a retirement community appealing, do your research before buying.
Although it can be nice to be in a community of people your age, with activities and things to do, such communities’ rules can be strict.
You may be very limited in decorating outside your house, how long your kids or grandkids can stay over, etc. Understanding how to pick an over-55 neighborhood to live in is a vital consideration.
Many people have a hard time going from a home to a condominium.
Think about it – you have been the king of your castle for many years, and now a group of people who run the condo association is saying you can’t plant flowers in your yard.
The harsh reality of going from your roost to one controlled by others can be challenging.
Keep this in mind when trying to decide between a home and a condo. Pay particular attention to the daily lifestyle you would like to lead.
4. Step-in Showers Are More Accessible as You Age.
Older people sometimes find stepping into and out of a bathtub challenging. On the other hand, step-in showers are easy to enter and exit. Some step-in showers have no step at all, which makes them easier to get wheelchairs into.
These showers are a super convenient feature you might want to consider whether you live in a house or condominium.
Better Homes and Gardens showcases some fantastic walk-in showers worth checking out.
5. Go For Big Hallways, Entryways, and Bathrooms, in Your Retirement Housing
More and more people are choosing to build new as part of their retirement home plans. Buying new construction homes offers many benefits, including customizing precisely what you want.
Many retirees are opting to make their living quarters easier to get around in.
Wide pathways are much easier to navigate with a wheelchair, including hallways, entryways, and bathrooms. Fortunately, the current style for homes focuses on spaciousness, so it should not be too complicated to find a home with the room you may need.
Buying new construction, however, does not come without its challenges. Working with a builder at times can be very stressful. Make sure you are up for the challenge.
Make sure you ask the builder these questions before purchasing new construction. Also, never make the mistake of buying new construction without a Realtor.
6. Make a Retirement Housing Plan With Your Significant Other.
It may seem funny, but more couples than you think assume that they are on the same page about retirement – when they aren’t.
If you believe you will be retiring on the coast while your partner dreams of returning home to the Midwest, you will have a problem.
Instead of making assumptions, take time and have multiple conversations about what you both want in a retirement home. With some planning, you should be able to come to an agreement that makes both of you happy.
More and more couples with some financial independence are also purchasing a second home in a vacation destination.
They are buying a home near family but also have a second place in a location they love. Typically, the vacation spot is in a warm-weather climate that is easier on our bodies as we age.
7. Consider Your Real-World Social Network With a Retirement Home.
If you have been living in an area for a long time, you probably have a social network of friends, family, and coworkers.
Sometimes retirees discover that moving across the country for retirement is not as much fun as they first imagined when they start missing their friends and family – and Facebook is no substitute for real-world interactions.
You may be adventurous and ready for something new, which is never bad. But you want to be prepared to lose your current social network if you choose to move a significant distance.
8. Make a Financial Plan That Includes Not Working.
How much house can I afford in retirement is a question retirees often ask themselves.
This may seem obvious, but it can be easy to get caught up in dreaming of your retirement life and forgetting the income limitations you will be working with once you are done working.
You need to be able to afford your new home, including all the related expenses – repairs, renovations, taxes, etc. – while still enjoying yourself and the things you love doing.
You want a realistic financial plan before you buy.
Speaking with a financial advisor is always a smart move before buying a home for retirement.
Some people make the mistake of buying a retirement house based on their current income. Planning for the future and not the moment is essential.
Be sure to ask yourself a fundamental question – what happens if my spouse dies? Having a solid financial plan in place for the unexpected is always wise.
9. Choose Realistic Financing For a Retirement Home.
While you may be able to put a significant down payment on your retirement home, doing so may not be the most brilliant move you can make financially.
Putting too much money into the home will allow you to pay it off faster, but it could also make you cash-poor.
You need enough money to live the life you want, even if it means having a mortgage. No one wants a mortgage if they don’t have to have one, but sometimes it is the best option.
On the other hand, if you’re financially independent, you may want to consider paying off your mortgage.
Whether or not you should have a mortgage differs from person to person. Asking a financial advisor what’s best for you is not a bad idea either.
Some people start with having no mortgage and then decide they want one to finance their expenses in retirement.
Consider a Reverse Mortgage
One of the perfect mortgages for retirees is a reverse mortgage.
You may want to consider a reverse mortgage if you are over sixty-two. The benefit of a reverse mortgage is it can be used as an income stream. Instead of you paying the lender, they pay you!
Reverse mortgages allow you to use the equity in your home as an income stream. There are, however, pros and cons of getting a reverse mortgage. Go in with your eyes wide open when pursuing this type of financing.
10. Remember Your Pets When Buying a Home For Retirement.
If you are a pet person, you must consider the kind of living situation that will work best for you and your furry companions.
Most condo and retirement communities have rules about pets you want to be aware of. Have your real estate agent check to see what the pet policy is for the association.
Some places restrict the number of pets, some have weight limits, and others don’t let you have them at all.
You also want to consider how your new lifestyle will work with your animal. Dogs, for instance, need to go out regularly.
Living in a building with an elevator means you must go down and back up every time you take the dog out – which may or may not sound appealing.
11. Try to Set a Reasonable Retirement Housing Budget.
Life is unpredictable, and getting older means you may find yourself unable to make as much money as you used to, or you may have medical issues that come up.
Ideally, you want to purchase a home you can afford, no matter what happens. The easier you can afford the home you retire in, the less likely you will find yourself hunting for another place to live when you are older.
Should You Rent a Home In Retirement Instead of Buying?
There are some reasons you should rent a home in retirement. It will be an excellent reason if you have not figured out where you want to live or the type of property.
You will also be free from any maintenance expenses by renting instead of purchasing. These are the best reasons for renting and not committing to a home purchase.
If you rent for a while, you’ll need to decide whether renting a house or an apartment is better.
There are pros and cons of buying a home after age 60. You may be surprised to learn that over 60 percent of retirees rent over 65.
Final Thoughts on Buying a House When Retired
Hopefully, these tips have spurred some additional thoughts on how to go about finding the best retirement home. Before rushing into any decisions, take your time with due diligence.
Get all your questions answered. Purchasing your retirement home is a big life decision that shouldn’t be taken lightly.
Additional Helpful Home Buying Articles
- Never buy the best home in the neighborhood – see why purchasing the best home in an area might be a mistake you regret.
Use these additional expert articles to make the best retirement home decisions.
About the Author: The above Real Estate information on buying a home for retirement was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for the last 37+ Years.
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