If you’re like a lot of homeowners, you have invested a lot of time, effort and money into your home over the years. And 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? We’re here to help you evaluate your options. To start, let’s take a look at these three categories.
The Best Location for Your Senior Years
According to an article by AARP, “77 percent of Americans over the age of 50 say they want to remain in their homes for the long term – a number that has been consistent for a number of years.”
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:
- General livability: Is it a safe area? What are the crime rates? What is the cost of living? How is the weather?
- Places where we could be healthy and happy: Are health resources nearby? 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 homeownership or rentals? Are there programs that pay for senior housing?
- Mobility and access to convenient transportation: Is there public transportation? What is the investment?
- 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 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 and social activities?
- 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 can be physically demanding. From cleaning and repairs, to raking leaves and shoveling snow, there is a lot 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 including Eldercare Locator, Rebuilding Together, Age in Place, and Home Modifications.
If you’re considering staying in your home as you age, consider the physical practicality of doing so and ask yourself these questions:
- Does your home need modifications to ensure it is a safe environment for you 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 have 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, it may be worth exploring some ways to make it more affordable. One strategy is to refinance your mortgage to reduce your monthly payments and interest rates. Check our current mortgage rates and speak with one of our mortgage representatives to see which option makes the most sense for you.
Another strategy to explore is 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, request a consultation.
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.
- 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 cash for emergencies?
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, gather all of the information that will help you make the best decision for your future.
If you have additional questions regarding mortgages or life insurance and financial assistance, please contact one of our mortgage representatives or financial advisors. We’re here to help!