2 Replies Latest reply on Feb 8, 2017 11:01 AM by Manisha Thakor

    Buying new home for retirement

    W2W Community Mgr

      Question from MojoWorking:

       

      I have entered into a phased retirement agreement with my employer, which gives me a semester off from teaching every year.  I want to

      relocate about 1000 miles from my current residence.  What are the upsides and downsides of buying a new home before retirement?  I can

      reside in the new home about 4-6 months of the year.  I am concerned about both homes being unoccupied for part of the year.  Any advice

      would be appreciated!

        • Re: Buying new home for retirement
          W2W Community Mgr

          This question was posted on the MyRetirement site and the W2W Expert, Manisha Thakor was happy to answer the question. Please see her suggestions below.

          • Re: Buying new home for retirement
            Manisha Thakor

            Mojoworking,

             

            I am a contributing Woman2Woman community Expert and saw your question posted within the MyRetirement community. Please see my suggestion below.

             

            When it comes to considering buying a second home (even one that in theory will ultimately become a primary and sole residence) there are both financial and personal preferences. Both should be given careful thought. Items to consider when weighing pros and cons include: 

            • Do you have sufficient current cash flow to maintain both mortgages (if you will have them) both now and if down the road it takes longer than expected to sell your current home?
            • Will the mortgage interest and property tax deductions be significant enough to be true enticement to take on the additional logistical complexity of having two homes?
            • Do you know the area you wish to relocate in well enough at this point to know with certainty which area you would like to live in? (And are you absolutely certain this is where you want to relocate)
            • Have you done a thorough retirement analysis to understand fully in retirement how much you can comfortably afford to spend and thus how much home you could afford to buy to live in during retirement?
            • Have you looked into renting a home (via VRBO or local agency) in your proposed new home town as an alternative to buying pre-retirement? (And/or have you considered renting out each property while not in use?)
            • Why do you feel your life would be better for having two homes a the same time?

             

            There are no right or wrong answers to these questions. Some people really love owning real estate while others find the logistical complexity of having to maintain (let alone pay for) two home completely overwhelming. So step one is to understand fully if you can afford to have both home - this is a great reason to meet with a TIAA advisor to discuss in person. Step two is then to decide if you actually want to do this.