The following post is from Melissa Batai
After my grandfather died, my grandmother moved into a retirement community. She had her own little kitchen, a dining room, living room, and a bedroom. There were plenty of activities that she could join like bus trips for shopping, weekly card games, and talent shows. For someone who was newly widowed, this was the best world for her.
My husband and I have already decided that when we’re in our 70s or 80s, we, too, will move to a retirement community so we don’t have to worry about the expense and inconvenience of maintaining a home.
However, this decision is not as easily made for most people.
My mom, for example, has no plans to leave her home even though the yard work is becoming too much for her and the house is much too large now that she’s alone.
She’s still relatively young, so maybe she’ll change her mind as she ages. Financial reasons also might motivate her decision as there are several good reasons to sell your home sometime in retirement.
You may have a lot of equity tied up in your home. If you’ve lived in your home for the majority of your adult life, it is likely paid off. Any money you make for the sale of the home would help to bulk up your retirement. If you sell earlier, rather than later, into retirement, you can invest that money in a good retirement account and watch it continue to grow the remaining years of your life.
Your monthly expenses will likely be lower. If your home is paid off, you don’t have a monthly house payment, but you still need to pay the utilities. If your home is too big for you (as is the case with most seniors who remain in the home), you’re likely spending a lot of money on utilities. If you move into a small apartment or condo, those utility prices should drop dramatically.
Your expenditures will be more stable. If you own a home outright, you must still maintain and repair it. Windows might cost $20,000 to replace. Your roof will likely need to be replaced sometime during your retirement years. All of these expenses can take a hit out of your retirement income. “‘A lot goes wrong with older homes and that’s why a lot of people want to relocate,’ says Debra Drelich, a geriatric are manager and founder of New York Elder Care Consultants. ‘You don’t have to deal with it when things break—you just call the super’” (Money).
If instead you rent an apartment, you know you won’t be responsible for upkeep and repairs, so you can take that line item right out of the budget.
In addition, if you need to hire the neighbor boy to mow the lawn and shovel the snow because you’re no longer able, those are expenses you will no longer need to pay when you move into an apartment.
While the emotional side of you may not want to move from your home where you’ve created memories for yourself and your family, financially speaking, doing so may be a smart financial move.
Do you plan to move out of your home when you retire or to stay there for as long as possible?