Buying and Financing Retirement Homes: Downsizing Gracefully

Talk of retirement homes might conjure a negative image of a small room in an assisted living facility or nursing home, today's healthy seniors often prefer to own retirement homes in vibrant communities. After all, there is a happy medium between trying to maintain a large house where you once raised a family and shrinking your world down to a couple of rooms in someone else's building.

Retirement: A New Beginning

According to the US Census Bureau, Americans reaching the traditional retirement age of 65 can expect to live nearly 19 years more. With so much time still ahead at age 65, retirement is a significant phase of your life, not an afterthought. So, the key is to downsize gracefully. Find a property that addresses the physical and financial realities you will face as you get older, but which also satisfies the needs and tastes of someone who still has a lot of life left. The following are some things to consider when choosing a property for your retirement years:

  1. Ease vs. independence. This issue will go a long way towards defining what type of property you buy into. Do you want to a condominium or a stand-alone house? Do you want to be part of a senior living community, or in a more diverse neighborhood? Condominiums and senior living communities typically provide maintenance services which can ease the burden on you, but these also come with extra layers of fees and may not provide you with the choice of life style you want. Be realistic about your health when making this decision, but also acknowledge that your happiness is a big part of what will make the choice one you can live with long-term.
  2. How much space? Sure, the kids are gone, and the idea behind downsizing is to lower your costs and housekeeping burdens. Still, an important aspect of downsizing gracefully is to choose a life style that won't make you feel cramped. So, even while cutting back your square footage, still consider a retirement home with an extra bedroom, or at least a den or study that can be used as a guest room. After all, you want those grandkids to be able to visit, don't you?
  3. Transportation. A study of intersection crashes by the National Highway Traffic Safety Administration found that while drivers in their 60s are still safer than drivers in their 20s, the risk of being at fault in a collision rises significantly as drivers move into their 70s and especially their 80s. So, one consideration in any long-term retirement living plan is whether there are alternate forms of transportation available -- either public or dedicated services provided by the neighborhood community or private groups.
  4. Convenience. Even if you are confident in your ability to continue to drive for years to come, who wants to spend their retirement years stuck in traffic? Before you make a move, check out what shopping and entertainment options are available nearby. Also, make sure the health care services you need would be easy to get to from your new location.
  5. Cost of living. Choosing a retirement home is also an opportunity to rethink your location. After years of living in the suburbs, for example, you may find city living more convenient now. Or, you may have your heart set on a warm weather location. Wherever you are thinking of moving, do some research on the cost of living. Normal, everyday expenses vary radically from one area to another. People who work in expensive areas may have incomes that reflect those higher costs of living, but once you are retired, your financial resources will have a harder time keeping pace.
  6. Taxes. Property taxes are also an important consideration in your choice of a retirement home. You don't want to reduce your mortgage payment by downsizing just to see those savings eaten up by a higher tax rate in your new location. Factor taxes into your financial calculations, and be sure to look into any property tax breaks some communities offer for older residents.
  7. Support services. Everything from housecleaning to visiting health care can make your life easier in a way that may allow you to live independently longer, so the availability of these services in any location you are thinking of moving to should be an important factor in your decision.
  8. Transitional services. One advantage of retirement homes that are integrated into a retirement community, as opposed to a stand-alone house, is that there may be an assisted living and/or skilled nursing facility affiliated with that community. This can ease the transition into one of those facilities if and when the time comes when you need more daily care.

One of the last things most people want in retirement is to have to make multiple moves. Choosing the right retirement home the first time can set you up for a long and stable stretch of living on your own terms.

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