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Old 04-03-2015, 03:02 AM
 
7,980 posts, read 11,661,322 times
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So for retirement it is usually recommended to own your own, mortgage payed off by retirement.
In fact it seems most retirement advice operates on the assumptions of married, kids, house.
Currently live in an apt, looking to retire on small pension at 60 in 2 years.
Single. Have no family to speak of.
Will retire in a different location. Would love it if it were the last place but am not
absolutely sure.
Should I buy?
How else does my situation change the standard assumptions about retirement?
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Old 04-03-2015, 03:42 AM
 
Location: Midwest
1,469 posts, read 859,976 times
Reputation: 2339
With rising rents I would be afraid to rent and not own in retirement. The equity in the home could be our passport to a great nursing home if the money ever runs short...Most who post will probably disagree. If upkeep were a concern I would rather buy a condo than rent although that wouldn't be my first option. So many people retire and move to be near kids, since we don't have any children we chose a place that the weather suits and the home prices and cost of living are low....We love snowmobiling and boating so we ended up moving from Pennsylvania to Northern Michigan and couldn't be happier! We love the low humidity of summer here and the beauty of the snowfalls that we remember in our youth. 2 major corporations moved out of the area making job prospects bleak but for us not working it was perfect. Beautiful scenery, uncrowded, and pristine water. I thought it would be hard to make new friends but we have more now than back in Pa when we worked. Just know yourself to know what climate and area of the country suits you before you jump into moving so it CAN be your forever home!!
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Old 04-03-2015, 03:51 AM
 
Location: Pennsylvania
16,355 posts, read 10,340,678 times
Reputation: 28510
I would say rent until you're sure where you want to live. Then buy.
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Old 04-03-2015, 04:59 AM
 
Location: Mount Airy, Maryland
10,461 posts, read 5,928,514 times
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Quote:
Originally Posted by PAhippo View Post
I would say rent until you're sure where you want to live. Then buy.
Yeah this is it. If you are planning on retiring on a small pension it sure sounds like a lot of that will be eaten up with monthly rent payments. Frankly I do not see how anyone can retire and then pay rent.
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Old 04-03-2015, 05:43 AM
 
Location: CT
3,461 posts, read 1,855,966 times
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Like others have said, the buy option gives you an asset you can use if needed, whereas renting is money spent. It also has the advantage of potentially holding or building equity if you decide to move in a few years, then you'll have cash to go elsewhere. I'd suggest looking in age restricted communities, it tends to be taylored to the elderly and sometimes cheaper, just be careful of HOA fees.
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Old 04-03-2015, 06:04 AM
 
Location: Central Massachusetts
4,800 posts, read 4,847,776 times
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Trouble is as a current renter will you have the cash for the down payment or better yet have enough to pay cash. There are a lot of great deals out there but there is one more aspect of owning that renters do not have to worry about. It is the elephant in the room too. It is called maintenance. Depending on the age, size, location and construction of the house that could turn up to be a large expensive option. Renters do not have that concern. Item number two on my point here is that since you are a renter and have not owned a home for a time if ever, what skills do you bring to the home to maintain it. If you have no plumbing, electrical, or even construction techniques any maintenance done will have to be done by contractors. If you do have those skills but haven't the tools (renters usually don't have many tools) you will need to get them. That can cost additional funds. So bottom line here is if you are a renter now a condo could be your best option so... but renting is still a viable option.

BTW I am a home owner
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Old 04-03-2015, 06:20 AM
 
Location: NC
6,555 posts, read 7,977,981 times
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You only build equity in a home if a) it sells for at least 6% more than you buy it for or b) if you lived in the home long enough to have paid down a lot of principal. At the beginning of your mortgage payments remember that you are mostly paying interest. As golfingduo mentioned, you also need to contend with regular maintenance costs which add an average of maybe 10-20%, plus taxes and insurance which add another 15% roughly to your 'payments'. For many people it does not make sense to buy their first home at 60.
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Old 04-03-2015, 06:32 AM
 
130 posts, read 101,345 times
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I'll throw my support to renting. While it's true you will have equity in your home, it may be difficult to get to that equity. Having just gone through the housing crisis in 2008-2012, there's no guarantee just how much your home will be worth in 10 or 20 years. Although historically, home values have always risen, I think it's safe to say, "Times, they are a changin'".

With renting, you haven't tied up your money, it is still available to invest and grow over time. Another thing to think about is when the time comes to move to an assisted living/nursing home, you, or your guardian, will not have to worry about the hassles of selling a home (home repairs, updating, whatever it takes to get it ready to sell--which will eat into your equity). You simply give the landlord his/her notice and move out. What if you decide ten years down the road that you don't like where you are, you've grown tired of your town/neighborhood? What if the area goes to hell? There goes the value of your home. As we get older (not that that will ever happen to us ), it pays to keep our options open. Basically, it is easier to move if you're just renting.

Many people think that if they own their home they will always have a place to live no matter what. But even owning your home is no guarantee it will be sold from out from under you. AARP just recently had a story about a woman in Pennsylvania who paid her property taxes late and incurred a $6.25 late fee. For whatever reason the fee was never paid and over time it increased because of more fees. Eventually her home was sold at auction on the courthouse steps without her knowledge. All because she didn't pay a $6.25 late fee! And I have no doubt this is an isolated incident, by any means.

While it true rent can always go up, don't think a mortgage can't go up as well. Property tax increases can affect a mortgage, although some areas do offer discounts/abatements to seniors.

I know what you're going through, I've thought about this also. Obviously, there are a lot of pros and cons for owning a home as well as renting. Perhaps making a pro/con list might help to put things in perspective.
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Old 04-03-2015, 06:57 AM
 
Location: middle tennessee
1,924 posts, read 989,259 times
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You say "small pension". If you need to downsize, I would put my name on subsidized apartment lists now. Of course, "small" means different things to different people.

I like renting because my income is substantial and my savings are not. My rent includes utilities and lawn care. I have lived here 5 years and my rent has not gone up. I check the rental ads frequently, just in case. My rent seems to be about average.

I plan to leave this world with nothing that has a title
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Old 04-03-2015, 07:24 AM
 
6,316 posts, read 5,055,910 times
Reputation: 12825
Quote:
Originally Posted by Giesela View Post
So for retirement it is usually recommended to own your own, mortgage payed off by retirement.
In fact it seems most retirement advice operates on the assumptions of married, kids, house.
Currently live in an apt, looking to retire on small pension at 60 in 2 years.
Single. Have no family to speak of.
Will retire in a different location. Would love it if it were the last place but am not
absolutely sure.
Should I buy?
How else does my situation change the standard assumptions about retirement?
I would hate having a mortgage payment when retired, but then you are used to paying rent, so it would almost be the same.

My biggest expense is maintenance. It is summer now here in south Texas and the AC is running. That darn thing needs something every season. I hate it, but it is a necessary evil. At least I know what to do when it sounds like it is going to give out.

Same with plumbing and electrical issues. And yard work. Its almost a full time job running this place!

But I might end up selling and buying a smaller, new home. This one is an ancient bungalow.
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