What you Must Know Before Purchasing your Retirement Home
For many people, the process of retirement often involves moving to a new home. Purchasing a new home can be a huge financial decision at any point in your life. This can be particularly true when you no longer have the same steady income. As a result, the purchase of a retirement home must be handled carefully. There are several key factors that must be taken into consideration when purchasing a retirement home.
First, you need to carefully consider where the best place will be for you to retire. One element that must be considered is easy access to physicians and hospitals. There are many locations throughout the country that might be appealing to you, but you must stop to consider whether you will be able to easily access emergency medical care if it is needed. You should consider whether the home is easily accessible to other services as well as sources of entertainment as well. As a retiree, you will likely have more time on your hands. Do you play golf? Enjoy bingo? Whatever your interests may be, it is a good idea to consider whether the home is located near those interests. Also consider proximity to shopping centers, places of worship, etc.
In addition, proximity to family is often important as well. Most people find that especially during their retirement years they want to be closer to family. You should also consider the type of climate you prefer. While many people love the idea of being in a warmer climate such as Florida, it can also be uncomfortably warm during the summer months. Consider the year-around climate as a whole when determining where you want to live during your retirement years.
How much you should spend is another big consideration for most retirees. Due to the economy, the subject of price has become even more important. While many people choose to downsize after retirement, others decide to purchase an even more expensive home. In determining price, ask yourself whether you will be able to afford the home long-term. Keep in mind that a larger home will also be more expensive to maintain in terms of routine care as well as other costs such as insurance. Is this really an expense that you want to continue to be responsible for during your retirement years?
You will also need to decide whether you should finance the home or buy it outright if you can afford to do so. Financing a home gives you the advantage of being able to save more of your lump sum savings while also taking advantage of tax deductions on the interest for your mortgage. At the same time; however, you must also consider the fact that you will be responsible for monthly payments. Carefully weigh both the advantages and the disadvantages before making a final decision.
You also need to consider your needs in a retirement home. Many retirees make the mistake of buying a home that is really bigger than what they need. The most common reason for this is that people want to make sure they have plenty of space for the kids and grandkids when they come to visit. What ultimately ends up happening; however, is that the kids and grandkids only come one to two times per year and the parents become responsible for paying for a home they really cannot afford for a couple of visits per year. Viewed in this way, the purchase of a larger home often is not a good expense. Financially speaking, it would be less expensive to put the kids and grandkids up in a nice hotel for the one or two times per year they come to visit than to pay for a larger house year around.
Finally, consider whether the home will be accessible to you if you should develop health problems later on. It may have been your dream to restore a century old Victorian home, but those stairs can become hard on the knees as you age. Will it be easy to outfit the home with ramps and other accessible items if you or your spouse should need them in your later years? While it might not seem to be an important consideration right now, it very well could become important in the future.
Purchasing a home can be an exciting prospect at any point in life. When you are considering the purchase of a retirement home, taking these factors into consideration will ensure you have all of your bases covered.