One of the most common things seniors do to prepare for retirement or to create an aging-in-place plan is to downsize their home. A smaller, ranch-style home can make all kinds of things easier, starting with house cleaning and just being able to see and use every part of your home. For a lot of seniors, this is and will remain a solid part of their retirement and aging-in-place. However, this is also one of those times in which you may want to think twice before simply doing what everybody else is doing….
Early Retirement vs. Late Retirement
The perfect home for someone when they’re a healthy 65 year-old who’s just entering retirement likely isn’t the same as it is for the 85 year-old who’s broken both hips and has shaky hands. Many seniors have been thinking and tentatively planning to downsize for years, only to realize when the time comes that if anything they want to upsize their home so as to have a place to host their adult children.
Unfortunately, with realtor commissions and selling costs, moving multiple times can eat into one’s retirement savings as well. Unfortunate as well is the fact that it’s impossible for even those in relatively good health, to know exactly when this change will occur or over what timeframe. Sometimes, a senior’s health status will decline over a period of months and even years, but in the case of a heart attack or stroke, it can also happen overnight. When this happens, entire areas of the home may become inaccessible, especially in terms of daily use.
Why Some Seniors Reconsider Downsizing
If you live in or around one of the major metropolitan areas experiencing a housing shortage, then there’s a good chance, your spare bedroom commands more in monthly rental income than you might suppose. In fact, some seniors are able to retire earlier with this supplemental income. Better yet, this strong demand means you can offer a good price and be choosy about who you share the home with. This type of arrangement can also be an experiment to gauge how well you might do with a home health aide living in the house instead of a renter. The experience may not be as intrusive as you’re afraid. Likewise, this can be a great solution for widows and widowers, or any senior who wants to stay in their home, but also doesn’t like living alone.
Other Incentives for Staying in the Home
Some seniors also have financial reasons for staying in their home, sometimes even when they would otherwise prefer to move. Some states have senior homestead tax exemption laws that give long-time senior residents a break of up to 50 percent of their property tax liability. These programs can be controversial in part because they create immobility in this segment of homeowners. Also, they can be expensive and may be hindering other investments cities and counties would make in their senior communities. There are hints that changes may be coming to Colorado’s Senior Property Tax Homestead Exemption some time next year.