Buying A Retirement Home: 10 Tips For Success Series Part 2 of 3

Buying Your Dream Retirement Home: 10 Tips For Success

Regardless of whether you’re considering buying a retirement home in Costa Rica, Arizona, or Colorado, you’ll want to make sure that you have a plan in place. So many retirees make the mistake of buying what they think is their dream home, only to find that it doesn’t fit their new lifestyle at all. Follow these ten steps to make sure that buying a home after retirement does, in fact, feel like a dream:

• Talk to your significant other: If you have a significant other, it’s important to have a conversation about your desires. Don’t assume that you’re both on the same page. Have several talks about what kind of home and lifestyle you desire. This may require some compromise, but make sure to reach an agreement where you can both be happy.
• Test it out: Whether you plan to move across the country or into a retirement community, make sure to test out your vision. Someone who likes the idea of living in a community might find that they don’t enjoy abiding by rules. Subsequently, someone who wants to move to Arizona may discover they don’t enjoy hot weather. Spend time visiting different retirement communities or vacationing in various destinations to find out what environment suits you best.
• Take mobility into consideration: Make sure to factor in mobility when picking out a place to live. Assuming that you’ll always be able to drive is a mistake. Instead, be sure to measure walkability and the availability of public transportation. Ensure that you’ll be able to get to important places, such as the hospital or the grocery store, even without a car.
• Pay attention to accessibility: In addition to mobility, be sure to pay attention to accessibility when looking at properties. Single-story properties are a popular choice amongst retirees, as they cut out the need for stairs. Other features to look for include wide entryways and hallways, step-in showers, and rooms that provide enough space to move around in a walker or wheelchair. Even if accessibility is not a current concern, keep in mind that retrofitting a property to become wheelchair accessible can be very expensive.
• Remember your friends and family: Many people dream of retiring to a faraway destination, such as a beach town or even abroad. However, before you leave your old life behind, be sure to consider how big of an impact leaving your support network can have.
• Work out a post-retirement budget: Sit down with a financial advisor and work out a realistic post-retirement budget. Getting an idea of your monthly retirement income and expenses now can help you identify areas that need more preparation. This can also be a great time to look into passive income opportunities to help boost your post-retirement income.
• Buy based on your future income: For those buying a retirement home early, be sure to calculate how much house you can afford based on your post-retirement budget, and not by your current income. Even if your monthly income were to stay roughly the same, the amount you can afford to spend on home-related expenses may change significantly.
• Assess the impact on your taxes: Be sure to take a look at the possible financial implications when planning to move to a new state or country. Some states have high property taxes, making your investment that much more expensive. Also, look into how your retirement income taxes and exemptions will be impacted based on your move.
• Be realistic about home-related expenses: Be sure to factor in home-related expenses when calculating your home-buying budget. Costs may increase or decrease based on the age and condition of the property, severity of the weather, or whether or not your future home is part of an HOA or retirement community.
• Make a down payment wisely: Some individuals are tempted to put their life savings toward a down payment to lower their monthly mortgage payments. However, this strategy can lead you to be house rich and cash poor, leaving little wiggle room for unexpected expenses or emergencies. Sit down with your lender and financial advisor to choose the right mortgage option and debt structure that best suit your needs.

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Buying A Retirement Home Series 2 of 3

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