• Question
  • I want to downsize, sell my house and move into a retirement community apartment. How long can I

    Asked by a 81 year old woman from Arlington, TX on 1/28/2013

    I want to downsize, sell my house and move into a retirement community apartment. How long can I live on my funds? How much rent can I afford to pay a month on my funds?

  • Categories: Your Life in Retirement, Retirement Planning, How Much to Save?, Retirement Communities, Housing


  • Editorial 


    San Francisco, CA

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  • My sincerest congratulations to you for planning ahead and thinking about your lifestyle and financial goals as you age. I hope that the NewRetirement analysis gave you a good idea about your overall financial situation.

    It appears that you have done an excellent job of keeping your retirement expenses roughly even with your retirement income. Downsizing to a retirement community might be feasible for you. The trick for you will be to guarantee that you will be able to pay the rent for as long as you live -- no matter how long that might be.

    To estimate how much rent you might be able to afford, I used our lifetime annuity calculator to estimate how much income $180,000 (from the sale of your home) might purchase for you. If you were to buy a $180,000 lifetime annuity in July of this year, you would be able to purchase a guaranteed lifetime income stream of $1,132 a month for however long you live. Is this enough to cover the rent in the retirement community?
    -- Lifetime Annuity Calculator: https://www.newretirement.com/Services/Annuity_Calculator.aspx

    You might be able to also tap your retirement savings to help with rent. However, the real financial risk you face will be if you start to incur out of pocket health care costs. And you may run into financial problems if you require long term care at some point in the future. However, if you can keep your $250,000 in retirement savings in tact, then that should be adequate to fund your care should you need it.

    I hope the calculator and this response are useful. You might also benefit from consulting with a financial advisor. We are happy to arrange a free telephone analysis with a prescreened financial planner.
    -- Free Consultation: https://www.newretirement.com/free-retirement-consultation.aspx

    We wish you all the best!

  • Login to rate this answer:   Answered on 1/29/2013
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.