Our parents’ generations saw living in the family home as a source of real security in retirement. It would be a gathering place for family. They looked at their house as a nest egg. It was a solid investment which would always be available for future needs. Often they saw a house as a form of inheritance for children and grandchildren. They might want to move to somewhere warmer or closer to children, but they would buy another house there. The desirability of a house ownership was a life-long viewpoint.
But times have changed. Often the family house is owned by a woman over 60, living alone and nearing retirement. Even for a couple over 60, continuing to own a house has some disadvantages which should be considered. Renting has some good points both financially and emotionally.
Some points to remember ……..
- When the toilet, sink, a/c or anything else breaks, someone else has to fix it. Repairs are not only often expensive, they are daunting. Often they’re emotionally upsetting and time consuming.
- If I want to move to a better climate or closer to my family, I can do it easily. No long term commitment, just wait for the end of the lease or negotiate an out.
- I don’t have to mow the grass, do the yard work – if I choose the right place. A terrace and some plants are enough for me to care for right now.
- If I need more space, or less space, I can easily change.
- I’ll never have to go through the hassle of trying to sell a house again.
- My housing expense is fixed for a period of time – no unexpected property tax increases, no expensive maintenance issues. Rents can go up but there are leases, negotiations and the right to move on.
- If a tornado, hurricane or flood ruins the property, I can move on – not rebuild. (A lot of very bad weather recently has been tough on house owners.)
- I will be less isolated. Rental properties, especially apartments and townhouses are closer to other people. (My rental might have a pool or an exercise room to use!)
- I can put my nest egg in income-generating accounts instead of having it tied up in a house. I want my savings to be readily availble for my use in retirement, for fun, for health needs or anything unexpected.
- I don’t have to worry about the cost of real estate going down. (I’ve given up on the idea of it going up!)
Also keep in mind that tax savings from interest on the mortgage payments is overrated, especially as you move into retirement and a lower income.