Retirement is an exciting time for us independent adults, with endless opportunities for travel, entertainment, and making new friends. However, when it comes to deciding where to live in your later years, it is critical to consider all options.
When they retire, some people choose to buy a smaller home or rent one. Others prefer the carefree lifestyle offered by “active adult” or independent living communities. Let’s take a moment to go over the benefits and drawbacks of each so you can decide which senior living option is best for you.
Purchasing a Home or Obtaining a Mortgage After the Age of 55
Purchasing a home after the age of 55 is a significant decision that will undoubtedly affect your retirement. While some financial institutions will make loans to older buyers, most are wary for a variety of reasons.
Personal finance expert David Ning advises against taking out a new 30-year fixed mortgage in your 50s. “Getting a 30-year mortgage when you are in your 50s is quite dangerous,” he writes, “whether you are buying a new home, refinancing your existing mortgage, or simply want to take out equity from a home that you own free and clear.” Do you really want to be making payments at 55, for example, until you’re 85?”
Before making such a large investment, it is critical to thoroughly investigate all options.
According to Investopedia, if you decide to buy a home after the age of 55, you should first consider other mortgage options that would work better for you and decide whether paying off the mortgage is more important than maximizing your retirement savings.
According to Carolyn Dunlavy, owner of Jade Tree Retirement Planning in California, “buying a new home and incurring the costs of a new mortgage loan for the next several decades can eat into your retirement savings.”
“Older buyers risk depleting their future retirement funds even further if they are both saving less for retirement and withdrawing from their IRAs to fund the purchase of a home,” Dunlavy warns. “That has the potential to be a double whammy.”
In other words, it is critical to carefully consider your decision to purchase a new home so that financial insecurity does not become a problem when you retire.
Renting a Residence in Retirement
Renting a home in retirement, on the other hand, provides flexibility for older adults who plan to travel or relocate in the future, or who simply want to save their nest egg for other expenses rather than buying a house.
Renting is less expensive and requires less planning than buying a home. Finding a home or apartment to rent takes a fraction of the time it would take to buy and frees up your money to spend on other things that are important to you, such as traveling to see friends and family or starting a new hobby.
In general, 55 is far too young to enter an independent living facility. After all, many older adults choose to work past the age of 65. However, it is prudent to plan ahead of time and do some window shopping.
Independent living communities, as the name implies, are for older adults who are completely independent in their daily living activities at home and can typically participate in community activities without difficulty.
Independent living communities for active older adults offer the kind of maintenance-free lifestyle that may become more appealing as you get older. Housekeeping, laundry, and meal services are frequently provided on-site in these communities to make your life easier.
Furthermore, media rooms, gyms, and swimming pools are common features in these communities, serving as thriving communal spaces for recreation, socialization, and celebration.
Independent living provides the ultimate senior living experience when you want to retire in comfort and style, surrounded by a community of peers.
Senior apartments are another option for independent living. The primary appeal of senior apartments is their convenience and accessibility. They are designed with older adults in mind. The apartments’ design and location are deliberate – they are built near public services and recreational areas.
Selecting Assisted Living
Many adults over the age of 65 prefer to age in place in independent-style communities that provide the same amenities and medical support as an assisted living community. These communities, known as continuing care retirement communities, or CCRCs, offer a comfortable way to age in place, with additional support available as medical needs increase.
Residents, for example, may begin their community experience by living in their own condominium or apartment, complete with all of the amenities they require to thrive independently. And, eventually, if they decide they need more assistance from community staff or prefer a more maintenance-free lifestyle, they can move into another part of the community with ease.
For some, CCRCs provide the ideal balance of independence and stability to help them age in place for years to come.
In conclusion, when it comes to deciding where to live, there are numerous housing options to consider. The decision will be influenced by your financial situation and retirement goals, but it should ultimately be the option that best supports the lifestyle you desire during your golden years.
Before making a decision that will undoubtedly affect the rest of your life, educate yourself on all of your options. It is never too soon or too late to begin!
Do you think you’ll end up buying another house in the coming years? Do you want to rent instead? Would you consider moving to an independent living community in your retirement years? How did you go about making your housing decision? Please join the discussion and share your thoughts.