5 Ways to Cut Housing Costs in Retirement
It’s not unusual for people to look for ways to cut housing costs, and it’s especially true of older adults who may be living on a fixed income.
From the traditional approach of downsizing to the more adventurous option of retiring abroad, there are many ways for you to cut housing costs in retirement. Read on for five ways to lower your housing expenses:
If you’re single – or even if you’re not – homesharing is one way to lower housing expenses by splitting them with others.
For older people with large homes that are being under-utilized, it could make sense to have someone else move in, whether it’s someone of a similar age or a college student attending a nearby university. The National Shared Housing Resource Center offers more information.
Downsizing is another option to consider if you don’t like the idea of sharing your home but recognize that you don’t really need those extra bedrooms.
By selling your current home and buying a smaller one, you may even end up with no mortgage, or extra cash left over after buying your new home. Additional benefits of downsizing can include lower property taxes and fewer home maintenance needs.
3. Get a Reverse Mortgage
If you’re still making monthly payments on your “forward” mortgage, here’s a way to cut your housing costs: get a reverse mortgage.
The federally-insured Home Equity Conversion Mortgage (HECM) program allows homeowners aged 62 and older to borrow against the value they’ve built up in their homes. Borrowers can use their proceeds to pay off the remainder of their existing mortgage, which is also one of the loan’s requirements.
Any remaining funds can then be used at the borrower’s discretion. Use our reverse mortgage calculator to estimate how much you could qualify for with a reverse mortgage.
4. Move to a Retiree-Friendly Location
Many times, families move into areas with high property tax rates to make sure their kids can get the best education. If your kids are grown and you’re no longer utilizing the public school system, it could make sense to move to another district with lower property taxes.
Some states are known for being retiree friendly, with low or even no sales or income tax. Others have a lower cost of living that can benefit people living on a fixed income. See BankRate’s 2014 list of 10 “unexpectedly great” states for retirement.
5. Sell Your House and Travel or Retire Abroad
Another option is retiring abroad, as other countries can offer lower costs of living and temperate climates often favored by retirees.
Panama, Ecuador, andMalaysia are the top three countries in 2014, primarily because of low monthly costs of living thanks to affordable housing and inexpensive food along with warm weather and cultural attractions.
Costa Rica made the list because of its affordable public health system, while Spain rounded out the top five as an affordable European country with depressed real estate prices and an overall low cost of living, in addition to both public and private health care systems.
Are you in the process of planning your retirement and looking for ways to cut costs? Click here for more reverse mortgage information.