Whether you plan to remain in your current home or live out your days in a Florida condo, it is key that you keep your housing costs down to a manageable level. So as your retirement approaches, you might wish to start thinking about the long-term cost implications of your living situation.
According to a Time.com article, housing costs comprise one-third of spending for Americans aged 54 to 74; more than half of those 55 to 64 still carry mortgages. Paying off mortgage debt in retirement will limit your liquid cash flow.
Also, if you’re going to stay in your current home, start considering how you can best adapt it to your eventual retirement needs.
These helpful tips can help you start planning for retirement now:
Think carefully before trading one mortgage for another. More than 30% of boomers have developed retirement relocation plans to save money in lower-tax states, a recent AARP survey reveals. Mortgage debt, though, can offset any benefits gained from lower taxes. This handy state tax calculator can help you understand how moving to another state could affect your finances.
Renovate now. If you’re in your 50s, you may have gotten your last child out the house and are done paying tuition. This would be a good time to make home adjustments that could benefit both you and your family for decades to come. If your home has multiple stories, it would be wise to make sure you can live comfortably on the first floor if necessary. Making home design decisions that appeal to family members at every stage of life—from young parents with strollers to college students with book bags to older adults with special needs—can help ensure your home will be enjoyed for the long term.
Source: “Retiring? Stay or Go, You’ve Got Moves to Make,” Time.com, June 2014
Do you plan to stay in your home or relocate when you retire? How did you come to your decision?