As you think about where to live after work no longer takes up most of your weekday hours, consider your ordinary days of the week. What do you like to do on a Tuesday morning? Will you need easy access to classes, restaurants, volunteer opportunities or relatives? Do you want to live closer to children or grandchildren? Do you like to be on your own in a peaceful place where you can pursue your hobbies and passions?
Define Your Retirement Priorities
Write down answers to questions like these:
- How close would you like to live to friends, children and grandchildren?
- How convenient do you want doctors’ and specialists’ offices, hospitals, urgent care, pharmacies, grocery shopping, fitness activities, banking or errands to be?
- How convenient would you like public transportation to be?
- What kinds of recreational, social and cultural opportunities appeal to you?
- What are your plans for part-time jobs, consulting or volunteering? Would you like it to be close by?
- How much room would you like to have for visitors?
- Do you like to entertain? How often? How many people at a time?
- Do you have or plan to get a pet? Do you want room for a garden, workshop or hobby space?
Count More Than the Listing Price
It’s easy to zero in on the cost of a house or apartment. But in your budget, don’t overlook other home ownership and living expenses: insurance, utilities, upkeep, association fees, taxes, transportation, etc.
Think through expenses and inconveniences you’ve dealt with in your current home: expensive repairs like a new roof or air conditioner, accessibility renovations, yard maintenance, etc. Are you looking forward to a newer home or one that requires less upkeep? Will a smaller place save on utilities, taxes and other costs, but leave you short on storage, hobby or entertaining space? Will it be roomy enough if you need home care down the road?
Check Health Care and Everyday Access
Take a good look at the layout of any home you’re considering; https://nia.nih.gov/health/aging-place/home-safety-checklist-older-adults is the page that actually explains it. How many steps are at each entrance? Can you access all living areas on one floor? If you had difficulty getting around on foot, could you navigate the hallways? Bathrooms? Could you access your bedroom and laundry facilities? Are the rooms well lit? If driving became inconvenient or unpleasant down the road, how difficult would errands like shopping, banking or going to social or fitness activities be from the home?
Test the Location Before Moving
Test-drive the move. If you’re considering moving to a different state or climate, spend time in that area, ideally outside of peak vacation season. Run a few errands, explore getting around, and gauge the friendliness and helpfulness of residents, and Stage Ready Financial Planning’s discussion of Ohio great for retirement offers another location-specific reference point before you decide where to settle.
Before buying, consider renting in the area you’re considering, particularly if:
- Your plans would mean selling the home you’ve lived in for many years
- You’d be leaving friends, family and support systems you’re comfortable with
- You’d be spending most of your savings on the move or a new home or renovation.
Stress-Test the Housing Decision
Before making a retirement housing decision, sit down with your spouse and/or partner to talk through the pros and cons. You may also benefit from talking it over with adult children or other family and trusted friends. Listen to their concerns, as they may bring up considerations you hadn’t thought of, but ultimately it’s your choice and your life.
Stress test the plan. Meet with a financial practitioner you trust to go over your plans. How will you pay for the house? For the first month’s payment, annual expenses, moving costs, renovations? Where will your retirement accounts live, and what tax considerations are there for a move? (Your financial pro may catch rollover mistakes you might make. If you take an indirect rollover of retirement account money, you have a 60-day window to re-deposit the money, for example. It may not be wise to use an indirect rollover to cover temporary housing expenses and run the risk of not having it all in place in 60 days.)
Once your income is mostly from investments, Social Security and, perhaps, a pension or part-time job, it’s wise to revisit your financial plan. How will different accounts be taxed in retirement? Not all income sources will necessarily be taxed the same way.
Run the numbers after taxes. What would your cash flow look like in:
- A “normal” spending year?
- A year with big medical expenses?
- A year with unexpected home repairs?
- A year when one spouse took care of the other and couldn’t work part-time?
- A down market year?
Jot down how much you think you’ll be spending each month and where the funds for those payments will come from. Don’t put all your money to work in your house. How will you pay for the first year in your new home or condo? Identify which account it will come from before you sign the deed or a long-term lease.