It sounds so satisfying, in a way, the prospect of working your whole life and then retiring—it’s a goal most of us have, to reach for a reward for decades of toil. With no deadlines to meet, no schedules to keep, no one to answer to, retirement means time to travel, engage in hobbies there was never time for, write the novel you always had on the back of your mind—time to finally unwind and relax.
Unfortunately, there are still bills to pay and that’s unavoidable, including your mortgage, taxes, utility payments, car payments, insurance. None of them vanish just because you retired. How will you use the money you’ve spent your life saving for retirement? Do you have a plan? Do you want the convenience of being able to walk to shops, restaurants, and other community hubs? Are you looking for flexibility, fewer homeowner responsibilities, and expenses along with the idea of simplifying your next move? Do you perhaps want to be closer to children and grandchildren, or live in a warmer climate?
Frequently retiring seniors find themselves house heavy, meaning they’re living in a house far larger than they actually require. A larger home means more upkeep, large costs for that upkeep and usually higher property taxes. A contribution to the Huffington Post explores ways seniors can save more and spend less through downsizing.
One of the most commonly given pieces of advice to retirees is to move to smaller home. A smaller house means reducing energy costs, costs associated with maintenance, and less maintenance in general. Relocating not only to a smaller home, but to an area with lower property taxes, help seniors living on a fixed income make the most of their savings. Purchasing a smaller home after the sale of the larger one will also add funds to retirement savings.
For those who are retiring and reviewing options about where to live, consider renting vs. buying. Building equity is one of the biggest factors that favors purchasing a home. But if there are no plans to leave the home behind or buy another home, it usually makes more financial sense to rent.
Though renting can be a better option for those who don’t plan to stay in one place for very long, buying is a more stable option over the long haul, because you don’t have to worry about sudden rental increases. Also, if you choose to leave an inheritance, having the property to inherit or sell is taken care of.
If you’ve paid off your mortgage, selling your house for a less-expensive condo means that you’ll have a big chunk of cash at your disposal. This could be used to supplement your retirement income stream or fund long-awaited extracurricular activities. Even if you haven’t paid off your mortgage, you may be able to reduce or eliminate a high monthly payment. Though condos may carry additional fees, many of the upkeep costs are covered—so it just depends whether you’d rather pay more upfront, or as things come up.
Finally, there’s the trend of micro-homes, which are homes that are typically as small as 100 – 400 square feet. The tiny home movement is more than just a relocation; it’s a lifestyle change that encourages increased efficiency and less waste—and maybe retirement is the perfect time to consider something like that. Simplifying can be liberating, and that is what retirement should be all about. Plus, many tiny homes are built on trailers, allowing you the freedom to travel and take your home with you without the exorbitant expense of an RV.
First Florida Mortgage Can Help
At First Florida Mortgage, we are a Florida-based mortgage company that can help you through every step of financing your new home. Fill out the quick contact form or call First Florida Mortgage today at 1-407-392-4031 to speak with one of our Florida mortgage specialists and get a free good faith estimate.