Senior Alert: Buy Into a Retirement Community or a Home?
The answer is “it depends” (not the kind you wear), and it depends on so many variables. An answer yes to your question could be yes to you and no to others. Here are some factors to consider. Often people in retirement communities discourage children, so if you have lots of grandchildren and they like to stay with you, it may be difficult. On the other hand, if you feel you would become more isolated and have health difficulties as you grow older, then a retirement community with all their scheduled activities and access to health and disability support may be wise. Yet the maintenance of a home and yard can be very demanding on seniors. Also selecting a home without stairs and steps can be important.
If you were one of my clients, I would want to review your tax situation and financial portfolio and also access your income needs over your retirement period. For example, home costs can remain pretty well fixed with some increases in property taxes, while retirement community rentals can double or more over time.
So analysis and comparison of costs projected with inflation overtime on both scenarios is needed to see which option puts you ahead financially as each person has different circumstances and weighed with which is your preferred option to see what is best for you.
One client said “Although I’m 69, I do not want to be surrounded by old people all the time. My neighborhood is already effectively a retirement community. I spent my career in and around universities so I would prefer to be surrounded by all sorts of age ranges, educated and active.” Another client stated “I am old, but not crabby. I have 7 grandkids, ages 4 to 19. I went to look at a retirement community. It was very nice, had lots of activities, etc. however bike riding was forbidden in the streets and there were all sorts of rules regarding children. Once in the clubhouse, holding the hands of 2 quiet little boys, with the agent for the complex, some old bat took it upon herself to chastise the agent for allowing the 2 boys in the lobby of the clubhouse. We decided we were much happier in a mixed-age community. We did purchase a townhome because our gardening days are over.” Many people love retirement communities but would have a big problem with grandkids with so many restrictions. I retired young at age 62, because I needed to adopt my traumatized little granddaughters to keep them from going to state foster group homes and possibly spilt up.
The answer for me was to buy a home. It had an interesting floor plan where I could rent out an over the garage apartment, and also a basement apartment still maintaining almost all of my privacy which I treasure. I rent to singles that drive into their own garage and then seem to disappear after that 🙂 The income for both units is significant and more than provides for the additional expense of raising two children, which was completely unexpected just a few years ago in my own retirement income plan!
I remodeled my home to be without stairs and it is over 1,500 square feet with a detached garage that I converted to an activity room for the girls to dance and sing and play TV’s loud as they want too away from me and the renters. I was lucky to find a property with 4 garages 🙂 That was unique. Often homes can be remodeled to fit all kinds of unique circumstances to fit seniors retirement needs and even include rentals for additional income and or include family or other caretakers.
These days the girls are older and more stable and now I’m inching to go back to work! I love helping others plan their financial futures. Now that I’ve experienced retirement myself with expensive and troubling unexpected events, I feel I can help others prepare better than before. I think I can provide valuable additional insight in many ways that I couldn’t before even when I had become a seasoned financial adviser for decades.
