Women and Housing in Retirement

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Women and Housing in Retirement

The house where you raised your kids may feel like the only place you can call home, but keep an open mind. The place you call home may need to change as your financial picture changes entering retirement. You might want to have a room for everyone when the kids come with the grandchildren for Thanksgiving, but that just may not be practical. Let’s take a look at what your options might be.

Downsize

Depending on what part of the country you live in, you may lower your taxes immediately, as well as your utilities, simply by moving to a smaller house. Since your property taxes are based on the size of your house and property, plus certain amenities, the same number of bedrooms in a house of overall less square footage on a smaller piece of property could lower your taxes substantially.

Simple Internet research will guide you to the states, cities and towns with lower tax rates on income, sales and property. You’ll have to be flexible about where you spend your retirement years, but the extra money in your pocket might make relocation attractive enough.

Are you 55 or over?

A 55-and-over community offers ways to lower your expenses. Generally, a move to a 55+ community is a downsizing, thereby lowering taxes and utility expenses. If you buy in an active community, activities you may love are often offered at reduced prices, or are free for members of the community. In recent years, too, over-55 communities are fighting payment of school taxes, claiming they don’t have school-age children. They are few and far between, but there are already communities in which no school taxes are paid.

Townhomes and condos

Before you consider moving to a townhouse, also known as a "townhome," or condominium, better known as a "condo," you should know the difference. When you own a townhome, you own your building, interior and exterior, and the land it sits on, usually in front and back, of your building. When you own a condo, it is said that you own your building from the paint inward. The condo association owns from the drywall out, all common buildings, and all land. As an individual and condo owner, you do not own any land. This distinction matters when considering new housing to lower your living expenses. Depending on where you live, how much property is involved, and other factors, your property taxes can be different enough between a townhome and a condo as to be significant.

Consider renting

You may choose to shed the mortgage and taxes altogether, and rent. Rent payments are generally lower than mortgage payments, depending, of course, on the outstanding amount and interest rate. Switching from homeowner’s insurance to renter’s also puts extra money in your pocket. Generally, the landlord is responsible for repairs, and sometimes maintenance, relieving you of that financial burden as well.

Roommate?

The adage "two can live cheaper than one" is probably truer about retirees than any other group. Single women are not at the greatest risk of living in poverty because they don’t have a husband, but because they have no one with whom to share expenses. Living with a roommate greatly reduces your chances of living at a poverty level.