As we welcome the New Year, you might be thinking it is time to ditch the old house and move on for 2018. If you lived in your home for a long time and raised your children there you might consider the upkeep now of a larger property to be too much.
On the other hand, maybe this is your chance to build the home of your dreams and you are weighing the possibility of hiring a contractor, buying a lot in the woods and retiring in style. Finally, health considerations might seem to dictate a move to a retirement community or to personal care. How do you decide?
Retirement publications are filled with suggestions but here are some very basic no frills ideas that can help you get started.
- Can you afford to continue to live where you are? If you have substantial expenses such as property taxes and utilities with or without a sizeable mortgage, you might not be able to continue to handle these expenses indefinitely where you are. Sure, you might be fine in your 70’s or even early 80’s but if you are 65 with a new 30 year mortgage, consider what your income will be 20 years from now. Will it be consistent? Do you have guaranteed monthly income through Social Security and a defined benefit pension or enough in savings that it would not matter? On the other hand, if you will be downsizing to an apartment remember you will have no equity. Some of the same considerations regarding expense other than property taxes can apply to apartment living if you fail to plot out your income and expenses going forward.
- Can you modify your home or hire helpers to make your home more user friendly going forward? Several of my acquaintenances and clients have considered the possibility of moving and have ultimately decided to stay in place. Instead, they have taken the obvious steps such as making the home more accessible and added to them. This does not just mean grab bars in the shower or taking up loose throw rugs. It might mean structural modifications to the home with an addition on the first floor or heavy duty cleanout for accumulators or fresh coats of paint to make the home feel new. It can also mean hiring a gardener or landscaper, or a personal money manager to handle funds, or someone to come in and houseclean once or twice a week. Using this approach, some homeowners have found it less expensive and less emotionally draining to take these steps than moving and they still get to have a “new” house. Usually the first consideration here is to allow yourself to feel you deserve the extra attention after your years of hard work. Consider your budget also but you might just have enough to do this.
- Can You Afford To Move? Moving is not just a matter of finding a new house and taking the plunge. Affordability does not just mean money. If you move, will you be near medical and other services? Will you move close to family members and friends or will the commute be prohibitive? If you get tired of the new place do you have an exit plan? Can you test the idea in advance by visiting for longer periods of time and seeing how it works? Do you have enough for a home and a vacation home?
- Do You Have To Move? It is difficult to move for health reasons. You might move to personal care/ assisted living or you might begin early and move to a continuing care retirement community. Whether it makes more sense to pay an upfront fee and move to the retirement community and, if so, which one, or to move to personal care and pay monthly is a decision that a friend of mind who is a personal money manager has begun to systematize.
Whatever your decision, there is a wealth of opportunity out there if you think it through and are able to start early. Get help if you are not sure. It is likely worth the time and expense.
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.