After years of hard work, you’re finally at the time in your life when you can seriously start planning for what will happen when you can reduce the time spent working for a living. Every year, millions of people face the question of how to start planning for their later years. However, these years look different for everyone. Some may see themselves living in a vacation home. Others may choose to spend this time doing things they’ve always wanted to, such as traveling the world, climbing Kilimanjaro or motor racing. For those who never got to experience the lifestyle of being a homeowner, the golden years of their life may feel like the last chance before missing out on the experience altogether. But is buying a home as you enter your golden years actually a wise decision to make?
When weighing the decision to buy a new home, it’s important to ask yourself what is influencing this idea in the first place. Will it serve as an investment that could be part of your legacy or a place to live for a while? Our tastes and preferences change over time and our priorities are likely to change during our golden years. So, it may be important to find a home with a flexible layout to allow you to make changes as you age or a location that will meet your needs that are likely to change over time.
The next question to ask yourself is whether your finances will allow you to comfortably afford a home without changing your plans for the second half of your life. If you are planning to become a homeowner well in advance, then it could be wise to use flexible mortgage options such as FHA loans. Taking a mortgage out on a home years before the standard age of retirement can relieve the initial financial burden of buying a home outright. This practice will also leave your finances mostly intact in case of any unexpected challenges that many may face later in life, such as a divorce or a surprise medical bill. Plus, there is an added benefit of building equity on your home, which can help offset the financial impact of unforeseen circumstances.
Simply put, it can be a good idea to buy a home before your golden years, when the purchase can be made well in advance, anticipating possible changes in priorities over time.
You may have a goal of being debt free in the second half of life, which is something we strongly support at 2Young2Retire. You may be considering renting a property instead.
Taking on the cost of buying a new home later in life can leave you financially naked in the case of surprise expenses like a medical bill or divorce. Additionally, taking out a new mortgage right as you enter your golden years could be an additional headache as you will now have to manage the mortgage. Not to mention, you’ll also have to manage all the unanticipated issues or repairs the home may need.
You may already be a home owner but, for many, home ownership remains a dream as we journey through the second half of life. We are all in different situations with different aspirations, but maybe for you it is time to convert the dream into a plan that includes becoming as home owner sooner rather than later. It maybe the right time to choose.