10 Best Tips For Buying Your Retirement Home

Best Tips For Buying Your Retirement Home

Many people spend a significant portion of their lives working towards retirement. Even if you don’t have a specific retirement plan, it’s important to think about how or where you’re going to buy your retirement home.

Most people who retire end up moving to a new home or even a new city (check out the Best Places to Retire!) to enjoy the things they’ve been wanting to do and even lower their ongoing costs from a larger home in a more expensive city.

Whatever your reason, consider these 10 best tips for buying your retirement home to get the best result out of the process.

Tips For Buying Your Retirement Home

Talk To Your Partner About Expectations

People have their own retirement dreams regarding where they want to live and what they want to do in retirement. Having an open and honest discussion with your partner well before retirement can put you both on the same page and path forward.

If you and your partner have the exact same dreams for retirement, that’s fantastic but unlikely; even if there are minor differences, it’s important to voice them and come to any compromises that may be required.

Visit Where You Want To Live And Spend Some Time There

Sometimes the fantasy of retirement doesn’t match the reality, so if your retirement plans include a major location change, it’s important to visit and experience the area that you’d hope to live in during retirement.

You should also be researching the area, understanding how different times of the year can impact your enjoyment of retirement. Also, consider the type of community or location you want to be part of, will you be in a retirement home or 55+ community?

Often people dream of retiring in Las Vegas, Florida, Arizona, or many other locations, but perhaps the heat or other factors of living year-round in that location will make you want to reconsider buying a retirement home there.

You can also take a look at the types of rules or regulations you’ll be living under in different areas or communities. 

If you’ve spent your entire life being an individual, but your retirement home is in a community with specific rules, you may not enjoy being told how you can spend your retirement or what things you can do to your retirement home.

Consider Limitations As You Get Older

The unfortunate reality of age is that our bodies deteriorate no matter how well we look after ourselves. So considering the limitations or issues you may face during retirement should be factored into your retirement home.

Is your retirement home close to shops, healthcare, and anything else you may want. Driving may not always be an option for you, especially if you already have sight issues.

Also, considering your physical ability can help pick out retirement homes or assisted living as you may not want stairs anywhere in your home. So two-story houses may not be ideal for any future mobility issues.

You may also not want a large property that you’ll need to maintain, so perhaps a smaller yard or even an apartment could be a better option.

Consider Where Your Friends And Family Will Live

For some people, friends and family are a massive part of their lives, and while some may come and go, there are certainly people you’ll want to stay connected with and see even during retirement.

If you’re too far away, you may lose connection with important friends, and you may limit how often you can see your family. If your kids live in Boston, but you move to Las Vegas, is it feasible for them to visit you or vice versa?

This should also be part of your discussion with your partner, as they may not want to leave their extended family.

Determine A Real Retirement Budget

Retirement often means less income and a reliance on your savings with whatever income you do have coming in still. Your retirement home will have ongoing costs, as will your overall life.

Building a life and home budget based on your expected retirement funds is an important process so that you can understand how much money you’ll need to live the type of life you want.

For most people, retirement income will be much less than what they’re making right now, so you must know and plan for all expected costs and even some unexpected costs.

Factor In Your Income For Your Retirement Home

Unless you can fully buy or pay off your retirement home before you retire, it’s important to understand the monthly payments needed for your retirement home, which is where your budgeting can also help.

If you get a 30-year mortgage and need to pay $3,000 every month, is that going to be sustainable once you retire. You may pay off or save enough for 20 years and then falter in the final years when you really don’t have the ability to adapt as well.

Determine Tax Implications From Location Or Retirement Status

Tax is something you can’t avoid even in retirement, so when planning for your retirement home, it’s important to look into the tax requirements of the location you plan to live in, especially any tax implications of your change to retirement status.

If you’re moving states or even countries, the tax and benefits can significantly change depending on where you’ve been living or even where you technically call home.

You might lose some of your benefits or pay higher taxes in a different location than you’ve historically lived in.

Consider How Long You Will Live In The Home

Your retirement home may be the last place you live, and it’s important to consider how long you may be there for. If you’re going to live there for another 30 years, how does that impact your retirement home decision?

Think about the location and the house over the next 30 years and whether it would still be a good fit. You may find that living in another country doesn’t suit you for 30 years or that your house is going to have high costs when it’s 20-30 years ago, so if it’s already old, the costs are going to hit you sooner.

Be Conservative With Your Mortgage

You may have the goal to pay off your mortgage as quickly as possible by putting down a huge downpayment and paying back as much as possible as quickly as possible. Doing this may put you into a cash-poor situation that limits your enjoyment of life and doesn’t allow for any unexpected costs.

Makes sure your budget and mortgage allow for changes and that you’re not too rushed to pay everything back at the expense of enjoying your retirement home.

Check Healthcare And Health Insurance Requirements

Just as your retirement home should factor in your future health limitations, so should the location you decide to live. Having good healthcare in your new location will be important as you get older and require more assistance.

The other thing to consider is whether your health insurance can move with you. You will need to check with your healthcare provider on whether moving to the new location is going to impact your coverage or access to medical care.

Not all insurers offer coverage or the best coverage in all locations, so it’s a major consideration for retirement as that’s when you may need your insurance the most.

Final Thoughts On Buying Your Dream Retirement Home

Planning early for your retirement allows you to work towards your goal, and even if your goals or requirements change over the years, your prep work can be modified to adapt to your new situation.

The best tip for buying your retirement home is to take an honest look at what you want and how sustainable retirement will be once you get your retirement home. It’s essential to plan well and have contingency plans in place for any issues or changes that may occur.

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*Disclaimer: This material is provided for information purposes only and is not to be construed as investment or tax advice. Readers are strongly advised to consult with their professional advisors regarding the information herein.

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