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Tips on Budgeting for Your New Retirement Home
Downsize Your Housing
More than half of those who bought a retirement home downsized in doing so, according to a survey that was conducted by Merrill Lynch. Most were motivated by savings in their living costs as well as seeking to reduce the responsibilities associated with maintaining a larger house. After all, in most cases their kids are grown up and moved out and there simply isn’t a need for all those bedrooms and bathrooms. Nevertheless, it’s not an easy decision to make and many people hang on to their old home, just in case one of the children comes back after college or need a place to live after a divorce. Some are simply reluctant to move from the place where they raised their children and have years of memories.
These kind of “what-if’s” and personal feelings make the tie to one’s home the hardest thing to break, yet the expenses of keeping the home go on unabated and unnecessarily. For most whose retirement budget is constrained, the break needs to be made and the transition to a smaller place secured. If possible, one should also seek out a less-expensive neighborhood in which to live and find a home with lower taxes, less maintenance, and reduced utility bills. Finally, don’t let the real estate market put off the decision, because if you sell your current home for less, chances are you’ll also pay less for your new house.
Stop Subsidizing Your Kids’ Lifestyles
A second important tip in budgeting for your new retirement home is the old saying that goes “Good parents give their children roots and wings—roots to know where home is and wings to fly off and practice what has been taught them.” Saying no to your grown children is probably one of the hardest things for parents to do, yet you also have to realize that you have given them their roots. The time comes when you have to give them their wings. Accommodating them when they look to move back in or maybe not move out when it’s time, doesn’t do them any favors when it comes to being self-sufficient and spreading those wings. They also need to know that as parents you have needs as well, and those needs can’t be met unless you too can move on.
Take Advantage of Active Adult Discounts
Consider joining organizations like the American Association of Retired Persons in order to get their discounts. Always take advantage of retailers, service providers, and anyone offering “active adult discounts” and remember that some discounts are offered to people as early as 50 years old. So don’t think you have to wait until retirement age to take advantage of them, but by all means take them. Remember, “a dollar saved is a dollar earned.” Be sure to research real estate tax breaks. Many counties offer active adult freezes or long-term owner reductions in taxes. In many municipalities, active adults are eligible either for free transportation or at least subsidized fares. Even if you aren’t faced with limited finances when planning your real estate budgeting, you should take advantage of all discounts that you are eligible to receive.