5 Things To Consider Before Buying A Retirement Home


Every year it seems experts are recommending starting to plan for retirement earlier and earlier. Pretty soon we will be taking our first steps, and learning about SEP IRA’s and 401-K’s at the same time.

In all seriousness, if you want to retire in comfort these days, you’ll need to start planning early. The increasing cost of living coupled with stagnant wages has put pressure on even the most strict of savers.

And of course, buying a retirement home is the biggest hurdle you’ll need to overcome if you want to make your retirement dreams come true. With that in mind, today we are going to discuss five things to consider before you buy your retirement home.

Factor In Taxes and Cost of Living

The first thing you need to do when buying a retirement home is to decide where you want to retire. This, of course, is easier said than done, there are so many factors to consider from average home prices to the weather.

Unfortunately, many retirement home seekers prioritize factors that really aren’t as important, like aesthetic appearances, instead of accurately evaluating each of their options based on the totality of factors.

Two of the most important factors that many retirees leave out are taxes and the cost of living. The fact is, tax burdens vary widely from state to state(see this new report from Wallethub about 2019’s tax burdens if you want to see your state’s tax hurdles).

For example in New York the total state tax burden including, income tax, property tax, and sales tax is over 12%. Comparing that to the least tax heavy state, Alaska, which has a total tax burden of just over 5%, we can see that where you want to live can greatly affect how much money you have to spend on everyday things during retirement.

If we factor in the cost of living on top of that, all of a sudden what was once a dream retirement location might turn into a nightmare, debt-inducing scenario for retirees.  So be careful, and remember to factor in those state taxes.

Don’t Leave Yourself House Poor

You’ve worked hard for decades, you deserve that big house with the perfect white picket fence you always imagined. Unfortunately, we don’t always get what we deserve in this world.

The simple fact is thousands of retired Americans go under on their mortgage payments every year because they overreached to buy that perfect place for retirement.

Don’t make this mistake. A good general rule of thumb for mortgage payments is they should never exceed 28% to 33% of your income. And if you have other debts, your total debt should never exceed 40% of your income. This rule of thumb is especially important for retirees with falling income. So remember, don’t leave yourselves house poor, buy smart.

Is their quality Outdoor Space?

Another thing you should consider when buying a retirement home is the availability of outdoor space. As we age, getting out and experiencing the world gets increasingly difficult, that means the value of outdoor space in your home increases substantially.

The fact is, there are dozens of studies that illustrate the value of outdoor time for human health. A recent article featured in Business Insider gives great examples of just how beneficial some simple outdoor time can be for our physical and emotional health. From reducing stress to improving your vision, spending time in nature with the sun on your back is vital to human health.

That means having some outdoor space in your home can be a real plus when you can’t get out as much. So, you should be looking for features like a covered patio with an electric awning, or as they say in Sweden, elektrisk markise, so you can be outdoors all year, or a small garden to help you practice your green thumb. Any type of outdoor space within your home can make a huge difference in your health and well-being.

Consider A Single Level

One of the most important factors in buying a retirement home is making sure your home will work for you as you age and your level of mobility changes. That’s why so many realtors recommend single level homes for anyone over the age of 55.

The last thing you want to have to do is add a stairlift to your home just so you can make it to bed at night, even if companies like Arrow Lift can quickly and cheaply get that done.

Your retirement should be spent enjoying life, not fixing up your home, so consider a single level.

How Much Maintenance Are you Willing to Do

Speaking of fixing up your home, the age of your retirement home should also be a primary concern before you buy. The last thing you want is to be stuck with hours of maintenance every month in your golden years and older homes require more maintenance.

According to a recent article in Motley Fool, the average American spends $4,958 on home repairs and improvements each year. Ideally, your final home will have none of that; no plumbing issues, no electricity issues, no broken fences, just a functioning, worry-free environment to enjoy.

Of course, beggars can’t be choosers and there will always be some level of maintenance required in home ownership. Still, your retirement home should require less than any previous home you’ve owned, otherwise, you’ll spend the last decades of your life at Home Depot instead of at the golf club.

So remember, don’t just buy your retirement home off the cuff, take some time to make an educated decision including all the relevant factors and you’ll save yourself a lot of time, money and heartache in retirement—I promise.


  1. My parents will be retiring soon, and they’re planning to purchase a retirement home, that’s why I’m starting to look for one. I’m glad you shared this; I’ll make sure to discuss with my parents about the importance of factoring the state taxes so that debt-inducing scenario would be avoided. Also, I agree with you that it’ll be a bad decision to go under their mortgage payment because this might leave them with nothing.


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