While the vast majority of older adults say they want to stay in their own home in retirement, others find moving to a new place an attractive idea. For some, downsizing offers benefits and perhaps even some cash in the bank if they have a house to sell. Others may want to move closer to family members. And some may have grown to hate their house and want to start fresh in a new location.
But even if you decide you want to move, there is another big question: rent or buy?
"There's a lot to be said for ownership, and one of the things is the psychological impact of knowing it's your place," says Jane Bennett Clark, a senior editor at Kiplinger's. Clark researched the pros and cons of retirees renting or buying in the current issue of Kiplinger's Personal Finance magazine (nwsdy.li/buyorrent).
Renting offers numerous advantages, especially for those who move to a new state but quickly find they are unhappy. "If they are not sure whether they're going to be staying there for five years, they might want to consider renting because it's more flexible," Clark says. "It gives them a chance to see how it is before they put a bunch of money down."
Your health also enters into the equation. If you buy, do you have the energy to maintain your new house? Those small repairs you easily do by yourself now may be much harder in five or 10 years. "If you're in an apartment, theoretically the apartment manager will take care of it," Clark says.
Many older adults, especially if their mortgage is paid off, like the idea of cashing out and renting, giving them a big nest egg. But some soon find their monthly budget is strained by the costs of rent and tap into that nest egg quicker than they had planned. Another potential problem with renting: While the kids may be gone, there may still be four-legged family members. Many would-be renters are surprised at how many buildings have strict "no pet" policies.
Location is also an important consideration. Are you thinking of selling your house but planning to stay on Long Island? Financial advice website bankrate.com says in areas where home prices are rising -- as they are on Long Island -- it generally makes more sense to buy.