Last updated on June 1, 2016
From the desk of Ralene Nelson, REALTOR serving Trilogy at Rio Vista: During the course of working with my clients I am asked all sorts of questions. When it comes to finding affordable housing and downsizing to save money, Trilogy at Rio Vista has it all!
Decreasing your housing payments will help your retirement savings last longer.
Housing is often your biggest retirement expense. But there are a variety of ways to cut your housing costs in retirement. Here are some ways to pay less for housing after you retire.
Pay off your mortgage
When you pay off your mortgage, you eliminate one of your most significant monthly bills. While you will still have to pay for insurance, maintenance and taxes, those costs are likely to be a fraction of your mortgage costs. Your retirement savings will stretch much further if you no longer need to make a large housing payment every month.
There’s no need for a large house with several stories and a spacious yard once your children grow up. Downsizing to a smaller home that costs significantly less can give a quick boost to your nest egg and eliminate many of the responsibilities of maintaining a large or aging home.h
Once you retire, you don’t have to live in a high-cost city because it’s close to your job. You can choose to live anywhere in the world that has the amenities, weather and entertainment options you desire. Start dreaming about the beach, a golf community or a college town. Once you exit a large city, you might even be able to buy a newer or bigger home for less money.
Reduce Property Taxes
Senior citizen homeowners who are older than a certain age and sometimes below a certain income cutoff qualify for property tax discounts in some jurisdictions. Find out when you might become eligible for property tax breaks in your area, and factor in property taxes and any exemptions provided to retirees before making any moves.
Become a Renter
Maintaining an aging home can be expensive and a lot of work. Selling your home and becoming a renter frees up the cash that was tied up in your home, makes someone else responsible for the upkeep of the property and might allow you to relocate to a city center that is walkable and close to shopping and entertainment options. However, renters could be subjected to significant rent increases or asked to move, which can be difficult to cope with in retirement.
Move in with your children
Multigenerational households can provide benefits to both adult children and retirees. Grandparents might be able to help with childcare and meal preparation, while also being provided with eldercare when it’s needed. While there is certainly the potential for conflict, a thoughtful arrangement could reduce the expenses of all the involved family members.
Share your Living Space
Rent out a Room
Sell your Stuff