Retirees need to decide whether to stay in their current home or move to something more suitable for the coming years. Relocating could mean downsizing, renting instead of owning or moving to another state or country. On a fixed income, retirees may struggle to find ideal housing due to a lack of affordable options. While the cost of housing continues to rise over time, retirement income decreases due to inflation and having money in more conservative investments. Here are eight tips to help you secure affordable housing for retirement.
Consider staying put. If you like your home, remaining there may be the obvious choice, at least in the early years of retirement. This may also be the most affordable option if the house is paid off or payments are inexpensive. Plus, there are no moving costs. However, though it may be your preferred housing today, living in your current home may not be sustainable as you age. For example, a home that requires the use of stairs to reach the bedrooms or bathrooms might become difficult to navigate at a later stage in your life. Address these kinds of potential accessibility issues before they become troublesome by renovating the house or moving sooner rather than later.
Move early in retirement. Moving out of your pre-retirement home may become necessary at some point. But moving before you have to puts you in the driver’s seat to find your ideal retirement home. This allows you to thoroughly think through your future needs to find the right home for you. Another benefit of moving earlier is cost. You’ll have more money and income early on in retirement. As the years pass, your buying power will diminish due to housing inflation and more conservative investment returns.
[See: The Best Places to Retire in 2018.]
Determine your needs. No one type of housing is right for every retiree. With the variety of homes and senior facilities available, it’s smart to spend time considering the options before making a move. “When considering options for retirement housing, the first step is to determine what type is necessary based on desired lifestyle and health requirements,” says Lori Thomas, director of community relations for SeniorAdvice.com. “If the focus is to find something that’s low maintenance while maintaining an active social life, then co-housing or a 55 plus community are good options to consider. If health concerns are involved, assisted living might be the best choice.”
What you want now may differ from your needs in the future. Try to balance your priorities of comfort today with the practicalities of aging over time. Once you identify your near and long-term housing needs, you’ll have a better idea of what the costs will be.
Speak to peers. A good place to start looking for housing is to consult retired friends. Friends who have left the home of their working years may have already done a lot of housing research. Ask them if they made the right choice in moving to their new home and community. Imagine living in the type of house they live in, and compare it to your expected needs. If you like an area or community, ask friends to keep their ears open for upcoming availability. You might hear about an available property before it hits the marketplace. Consider talking to a real estate agent who has insight into the local markets.
[See: 10 Ways to Reduce Your Housing Costs in Retirement.]
Try a housing search tool. A senior housing search website can help you determine what kind of housing is available in the area you want to live, often for free. The sites offer a range of housing options from independent living communities to nursing homes and memory care. Some reputable sites include SeniorLiving.org, APlaceforMom.com, SeniorAdvice.com and Caring.com. When you find a housing option you like and want to learn more, they will send your contact information to the community manager. If you’re uncomfortable with that, you can always contact the properties directly. Maps, detailed property descriptions, amenities and additional area information make these resources helpful for researching your future home.
Move to a senior-friendly locality. Certain cities and towns are better for retirees than others based on affordability, health and safety, climate and quality of life. When considering moving to a new place, determine your priorities and find the right city or town based on your needs. The SeniorScore livability index by SeniorAdvice.com is one such place to compare cities to live if you’re considering a move. It’s a free, data-driven score specifically tailored to seniors using more than 100 data points. Higher rated cities tend to be more affordable and have a more robust market for retirement housing. Search by zip code to learn the score in your area.
Being retirement-friendly can also mean there’s an abundance of housing ideal for retirees, especially in the warmer states. The downside of moving to another state is leaving your hometown. If you have family or close friends in the area, moving may not be the option that makes you the happiest.
Move to a state with no income tax. One way to stretch your retirement nest egg is to move to a state that doesn’t tax income. Doing so will save you money on withdrawals from tax-advantaged investments you’ve built over the years. Seven states do not tax personal income: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. However, you still need to consider the implications of property and sales taxes.
[Read: Why More Retirees Are Becoming Renters.]
Rent instead of own. Owning a home can bring a sense of comfort and security that renting may not provide. Long-time homeowners may be uncomfortable renting their housing after years of self-reliance. A suitable home that’s paid off or has a small mortgage is the preference for many retirees. However, as homes age, needed repairs tend to outpace the ability of homeowners to make repairs, especially on a fixed income. Renting a home alleviates some of the financial burdens of home ownership including big-ticket repairs and routine maintenance. If you sell your home, you’ll unleash years of home equity, improving your cash on hand. That money can be used for rent payments, potentially making your ideal retirement home more attainable.
Craig Stephens is a blogger at Retire Before Dad.
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8 Tips for Finding Affordable Housing in Retirement originally appeared on usnews.com
