If you’re like most homeowners, you have invested a lot of time, effort and money into your home over the years. You probably have many wonderful memories of living there. However, as we grow older and face health or financial challenges, there comes a time to evaluate whether it makes sense to stay in your house.
How do you know when it is the right time to make the move? This blog is designed to help you evaluate your options. Take a look at these three categories to help frame the discussion.
The Best Location for Your Senior Years
PBS reported that “Nearly 90 percent of Americans over the age of 65 say they would prefer to ‘age in place’ in their own homes as long as possible, according to AARP. And four of five people in that age bracket believe their current home is where they will always live.”
But how can you evaluate whether the location of your home will meet your basic geographic needs as you age and as your needs change over time? The Milken Institute released a report on the best cities for successful aging. They ranked locations by the following criteria:
- Safe, affordable and comfortable: What are the crime rates? What is the cost of living? How is the weather?
- Places where we could be healthy and happy: Where are the health resources? Is there a focus on community wellness?
- Financially secure and part of an economy that enables opportunity and entrepreneurship: What are the poverty and employment rates?
- Living arrangements that suit our needs: What are the costs of home ownership or rentals? Are there programs that pay for senior housing?
- Mobility and access to convenient transportation: What is the investment in public transit?
- Physically, intellectually and culturally enriched and connected to our families, friends and the community: What are the opportunities for recreation, volunteerism, cultural and religious activities and senior programs?
Evaluating the location of your home against these broad criteria is a good starting point. Here are some questions to ask:
- Is public transportation available? How often does it run and where does it go? How convenient is it for your needs?
- How far away is the nearest hospital? How far are you from your doctors? What are your transportation options?
- How geographically close is your support network of family and friends? How often would you interact with others and in what way?
- What area services are provided to help older adults? Would you be able to take advantage of these offerings?
- How often would you be able to participate in recreation, social activities, and/or your house of worship if you stayed?
- How is the climate? Are there times in the year when weather would present certain challenges?
The Physical Practicality of Owning a Home
Maintaining a home is physically demanding. From cleaning and repairs, to raking leaves and shoveling snow, there is much to do. Such physical labor can be challenging as we age, and we may need to hire help with home maintenance.
In addition, your house wasn’t likely built for aging residents, and there may be a need to incorporate safety measures, such as railings to help prevent falls. Note that modifying your home for aging is common, and there are resources available such as your local Area Agency on Aging which can provide information on programs that provide low or no-interest loans, tax credits or other programs for home modifications. There are lots of online resources for home modification for seniors as well. These include eldercare.gov, rebuildingtogether.org, ageinplace.org, and homemods.org.
If you’re considering staying in your home as you age, consider the physical practicality of doing so. Here are some questions to ask:
- Does your home need modifications to ensure it is safe as you age? Compare your home with this senior safety checklist.
- Is it financially feasible to make home modifications? If not, do you qualify for assistance programs?
- Can you afford to hire help with home maintenance (cleaning, yard work, repairs)? If not, do you have family members or friends who can take on these responsibilities on a regular basis?
- How many years might it be before you may need help with everyday tasks? What options do you have for such support?
Financial Obligations Post-Retirement
Perhaps the greatest challenge of staying in your home is meeting the financial obligation. Whether you still hold a mortgage or are simply responsible for taxes and home maintenance, you will need to plan for how to pay your expenses while on a fixed income.
If you still have a mortgage, you can take steps to make it more affordable. One strategy is to refinance your mortgage to reduce your monthly payments and interest rates. To check available rates, see our page for current Lakeland Bank Mortgage rates.
Another strategy is to take out a reverse mortgage. You start with a home that is paid off, or nearly paid off, and mortgage the equity in your home so you receive regular payments from the lender. When the home is no longer your primary residence, the loan must be repaid. For more information on this financial strategy, see our blog on how to decide if a reverse mortgage is right for you.
There are many ways that you can structure your post-retirement finances to enable you to stay in your home. It starts by asking the right questions—and evaluating the answers. Here are the questions to ask to get you started:
- What is your annual post-retirement income?
- Do you have stocks, bonds or property that you would be willing to sell?
- Do you need or want to tap into the equity in your home?
- Do you qualify for a property tax deferral loan?
- If you have a life insurance policy, can you use part of the death benefit to pay for supportive services?
- What government programs are in place to help you financially?
- What is your source, if any, of ‘ready cash’ for emergencies?
A few points to consider
Moving isn’t easy, especially if you’re considering relocating from a home where you have lived for decades. It’s as much an emotional decision as a rational one. Keep that in mind as you review the economic viability of your aging in place, downsizing or relocating to a different living arrangement. Look at the big picture. Create a budget. Talk to your family. Gathering all of the information will help you make the best decision for your future.
If you have additional questions regarding mortgages, please contact Jody Michael Tobia at 973-935-7119 or jtobia at lakelandbank dot com. Reverse and conventional mortgages are offered through Lakeland Mortgage, a trade name of Sullivan Financial Services, Inc. and a wholly owned subsidiary of Lakeland Bank.