For Mark Roberts’ Use: When you envision your retirement, do you picture yourself playing golf on a tropical island, playing cards in a retirement home, or simply enjoying your own backyard? A 2012 poll by the National Council on Aging found that 9 out of 10 Americans aged 60 and older plan to spend the next five to ten years exactly where they are – in their own homes. Of course, the reasons for doing so varied from one survey respondent to the next:
- 85 percent said they like their homes and simply do not want to move
- 66 percent said they have friends or family nearby
- 50 percent said they don’t want to deal with the hassle of moving
- 30 percent of respondents aren’t sure where else they would go
- 26 percent said they can’t afford the cost of moving
- 23 percent did not believe they could sell their homes in the current market
Some of these reasons, such as simply not wanting to move or having friends and family nearby, are based solely on personal preference. Others, however, reflect a lack of planning and preparation. For example, the cost of moving is an understandable impediment, but everyone should factor such expenses into their retirement budgets. While staying at home is a worthwhile goal and realistic in many situations, unforeseen complications could force a move at some point. Setting aside some extra cash for such an emergency would be a smart idea.
The 23 percent of respondents who feared being unable to sell their homes might be right, at least for now. Home values are slowly improving, but it could be some time before they completely rebound to their former levels. Still, retirees should carefully weigh the pros and cons of staying in a larger home than they need, considering the costs of taxes, routine maintenance, and interest on a hefty mortgage.
Unfortunately, all retirees will not be able to remain at home indefinitely. One serious illness or injury could necessitate a stay in a long-term care facility or an in-home nursing assistant. When making your retirement plan, consider whether your medical insurance will pay for these services, and make a financial plan to cover these expenses.
This information is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.