Retirees often times decide to relocate after retirement; whether that means downsizing their home or relocating to a whole new community. Renovations are also starting to become a hit with seniors, due to them making their new home more accessible.
When making these types of decisions, however, seniors can often make big mistakes. A person’s home is typically their biggest asset and can hold strong emotional ties to it. This type of attachment can easily influence a retiree when it comes to potentially selling their home and relocating.
DOWNSIZING
A question many retirees face is when is the right time to downsize? Many people wait until their last child is out of the house, however moving back in with your parents post college is beginning to become more popular. So really, when is the best time? Choosing the best time to downsize your home can potentially save you a lot of money, depending on the taxes and mortgage rate at the time of your purchase. Typically larger homes mean higher tax bills, expensive maintenance, and even a higher mortgage rate. Reducing all those costs sooner or later can save a retiree a lot of money in the long run.
SAVE, SPEND, OR INVEST
Retirees also need to consider the best use of profit they may make from the sale of their home. Investing that money, rather than making a purchase may be smart. However, some people live off the equity they acquired from the sale of their home.
TWO HOMES MEAN DOUBLE THE BILLS
Often times retirees have two homes, their main residence and a summer home However, the upkeep of two homes can be very pricey due to mortgage payments, electricity bills, and upkeep of the houses. In this case, seniors should consider paying cash for a home rather than having another bill to pay over 15 to 30 years.
The bottom line is, retirees should do what’s best for them, their financial standpoint, and their wellbeing. Whether that means downsizing their home, relocating, etc.