Jill Finkelstein - Compass



Posted by Jill Finkelstein on 8/30/2020

Photo by Harli Marten on Unsplash

Although it may seem like putting the cart before the horse, a strong case can be made for purchasing your retirement home before your golden years. In fact, with some deft financial planning, it may be worthwhile to buy your retirement home decades in advance. That may seem counterintuitive, but maybe other folks have been doing it backward. Whether you are a Millennial, Gen Xer, or Baby Boomer, the best time to plan ahead is right now. Consider these strategies.

Why Buying Now Saves Retirement Dollars

The Gen X crowd was born between 1965-1979, making them 40- and 50-somethings. Those are generally prime financial years. In many cases, they’re nearing the end of a mortgage and are probably enjoying the fruits of many years of savings. This means having equity and resources at their disposal to make a move on a property now.

The argument for paying off an existing home loan or doubling-up if it’s reasonably low rests on data that the home values continue to rise. Consider these incremental increases in median home sales pricing.

  • 1970: $23,400
  • 1980: $64,60
  • 1990: $122,90
  • 2000: $169,000
  • 2010: $221,800
  • The median price routinely topped $300,000 in 2019, and the robust economy, coupled with an inventory shortfall, is expected to drive prices upward. If you were to have purchased your retirement home just 10 years ago, your savings would have amounted to nearly $100,000, plus lower interest payments. Those are real retirement dollars.

    Why Buying Your Retirement Home First Makes Sense

    One of the strategies savvy Millennials are employing is to purchase an “investment property” rather than a primary residence first. That may seem like thinking way outside the box, but the math and lifestyle considerations can make it a smart play.

    This demographic runs between 23 and 38 years old, and they have grown up in a vastly different culture than their predecessors. Some are straight out of college struggling with student loan debt, and even the top end of the age bracket has members still evolving their careers in many cases. These factors tend to position Millennials for ongoing relocation as they take advantage of emerging opportunities. Rather than be burdened with buying and selling a home, it’s easier to rent.

    Financially sharp Millennials, among others, have purchased properties in culturally rich areas that lend themselves to college students and tourism. The strategy is to enlist the help of a real estate professional who oversees renting, upkeep, and allow the asset to pay for itself. In many cases, it may even yield a profit. When retirement age arrives, there can be ample revenue to do a full remodel and just pay the taxes while you collect a pension or social security.

    Although buying a retirement home prior to punching out for the last time may seem odd at first, it’s in your best interest to run the numbers both ways. Consider all the moving parts and detailed costs to make an informed decision about your best time to but a retirement home.




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    Posted by Jill Finkelstein on 11/5/2017

    Buying a retirement home is a big decision. And doing so before you retire is a smart decision. However, youíre also in a completely different place than you will be when youíre retired or as you age. You donít know what the future holds. Itís easy to take our mobility for granted until we lost it. There are a few things you should look for in a home to plan for the future and whatever it may hold.

    Many empty-nesters look to downsize when buying their next home. And this very well might be the perfect option for you. But first, consider how often and how many guests you may want to have over at a time. Will you host holiday dinners or want to have room for grandchildren to stay for the night? If you have a large family or one that is growing many couples find they want the room to host dinners or have a pull-out couch.

    Youíll also want to plan ahead for the future when choosing the size and layout of your new home. Even if you downsize itís wise to put wide hallways and a single floor plan on your wishlist as you house hunt. If either of you has mobility limitations in the future youíll be glad to have such an accessible home.

    The lower your monthly payments on your new mortgage, the better. But more ideally youíll want to consider homes in a price range that allow you to pay in full. Again, keeping retirement in mind keeping bills to a minimum so that either one of you can cover all costs on one sole income could save you from hardship down the line. Retirement is very different from what it used to be, often many people find themselves needing to take on part-time work to get by. Keeping expenses well below your monthly income can help to ensure you can spend your retirement years enjoying life in the way you want to.

    In general, when planning retirement itís best to live below your means. Not only do you want to account for inflation costs but also for any unexpected large expenses that could crop up such as home repairs, emergency care, or car maintenance. Having an idea of what your future budget will be as well as your current one will help you make the best decisions for the years ahead now.

    Buying a retirement home can save you money in the long run on bills like heating and electric. However, house hunting for the perfect home entails a lot more decisions that many couples realize. Remember to plan for your life both now and later when putting together your must have features for your new home.







    Jill Finkelstein