Money Should you own a home in retirement? Maybe not

20:06  10 august  2017
20:06  10 august  2017 Source:   The Motley Fool

Should you do a pension buyback?

  Should you do a pension buyback? It’s almost always a good ideaNow I have the opportunity to purchase that year of pension.

Maybe Not . A growing number of seniors are opting to rent during retirement rather than own . Compare Brokers. Current. Should You Own a Home in Retirement ?

Already Retired . Time to Retire , Now What? Living in Retirement in Your 60s. Should I Reverse Mortgage My Home ? Should I Get a Long Term Care Policy? Compare Brokers. Current. Should You Own a Home in Retirement ? Maybe Not @themotleyfool #stocks.

What to watch next
  • Major averages face biggest drop since July 6

    Major averages face biggest drop since July 6

    CNBC Logo
    CNBC
    3:58
  • Opening Bell, August 10, 2017

    Opening Bell, August 10, 2017

    CNBC Logo
    CNBC
    0:57
  • Blue Apron shares plummet 15% as new facility start-up costs slash marketing spending

    Blue Apron shares plummet 15% as new facility start-up costs slash marketing spending

    CNBC Logo
    CNBC
    0:46
  • Oil prices rise above $50 as Saudis cut exports and US stockpiles fall

    Oil prices rise above $50 as Saudis cut exports and US stockpiles fall

    CNBC Logo
    CNBC
    0:56
  • Renegade bank analyst Mike Mayo, at new firm, makes bold bullish call on Citi

    Renegade bank analyst Mike Mayo, at new firm, makes bold bullish call on Citi

    CNBC Logo
    CNBC
    0:50
  • Powerball, Mega Millions jackpots both top $350 million

    Powerball, Mega Millions jackpots both top $350 million

    CNBC Logo
    CNBC
    1:07
  • Faber Report: Media executives frustrated with Disney's streaming announcement

    Faber Report: Media executives frustrated with Disney's streaming announcement

    CNBC Logo
    CNBC
    6:01
  • Today's Bell Ringer, August 10, 2017

    Today's Bell Ringer, August 10, 2017

    CNBC Logo
    CNBC
    0:19
  • The world's greatest leaders have these traits in common

    The world's greatest leaders have these traits in common

    CNBC Logo
    CNBC
    0:59
  • What happens when you don't pay off your debt?

    What happens when you don't pay off your debt?

    CNBC Logo
    CNBC
    1:17
  • Jim Cramer: Blue Apron remains 'Mr. Travesty' when it comes to its IPO

    Jim Cramer: Blue Apron remains 'Mr. Travesty' when it comes to its IPO

    CNBC Logo
    CNBC
    1:44
  • The dollar index continues to fall

    The dollar index continues to fall

    CNBC Logo
    CNBC
    0:16
  • 300 Entertainment's Kevin Liles on using tech in the music biz

    300 Entertainment's Kevin Liles on using tech in the music biz

    CNBC Logo
    CNBC
    2:46
  • Macy's beats on top and bottom lines in 'solid' second quarter

    Macy's beats on top and bottom lines in 'solid' second quarter

    CNBC Logo
    CNBC
    1:25
  • David Rubenstein: Fed likely to only hike in December

    David Rubenstein: Fed likely to only hike in December

    CNBC Logo
    CNBC
    0:57
  • Producer price index posts biggest drop in 11 months

    Producer price index posts biggest drop in 11 months

    CNBC Logo
    CNBC
    2:38
UP NEXT
UP NEXT
Video by CNBC

Do we need spousal RRSPs if our salaries are the same?

  Do we need spousal RRSPs if our salaries are the same? How to decide if there’s an advantageConsidering our employment status and how our salary levels don’t differ too much, does it even make sense to have a spousal RRSP? Or should I just assume that pension income splitting will still be around by the time I retire?

Maybe Not . A growing number of seniors are opting to rent during retirement rather than own . Compare Brokers. Current. Should You Own a Home in Retirement ?

A growing number of seniors are opting to rent during retirement rather than own . Here are some good reasons to go this route.

There are lots of good reasons to own a home, both as a working adult and as a retiree. When you own a home, you don't have to stress about your rent suddenly going up once your lease runs out. Similarly, you don't need to worry that your landlord will decide to reoccupy or sell your home, thus leaving you out on the street till you find a new place to live. But perhaps the most enticing benefit of owning a home is the tax breaks that come along with it. Not only can homeowners write off the interest they pay on their mortgages, but there are a host of additional deductions, from property taxes to mortgage points, that property owners can capitalize on.

But despite these perks, a growing number of older Americans are choosing to forgo homeownership in favor of renting instead. A recent study by Credit Sesame found that 33% of baby boomers and 46% of seniors 65 and over are making a conscious decision to rent their homes rather than buy, even though they can afford the latter option. It therefore raises the question: Is homeownership later in life such a good idea after all?

The retirement reshuffle

  The retirement reshuffle How to rearrange investment accounts in your golden yearsI would appreciate your thoughts on diversification and winding down as we approach retirement.

You should also look at the costs of home prices versus yearly rent for comparable homes in your community. Renting may be the better choice if you ’re not sure where you want to settle down for good in retirement . This is especially true if you think you may move within three to five years.

The question at first for the would-be retiree overseas should be: Should you buy a retirement residence overseas at all? Maybe it's not a real estate purchase you want -- but a If you decide to invest in a new home of your own for your retirement overseas, here are 10 things to consider first

Renting in retirement has its benefits

The motivation to rent in retirement when you can otherwise afford to buy typically boils down to one thing: locking in your costs. Most retirees live off a fixed income, so it stands to reason that the more fixed costs they're able to work with, the better. And while many retirement expenses come with their fair share of variables, there's perhaps no more volatile a budget-buster than owned property.

While it's true that your mortgage payment can't go up in retirement (assuming, of course, that you have a fixed loan, and not a variable one), that's just one piece of the homeownership puzzle -- and it's your peripheral costs that are likely to climb. Take property taxes, which, in some parts of the country, can equal or even exceed one's mortgage payment itself. Even during periods when home values drop, property taxes still have a tendency to rise. In 2000, U.S. homeowners paid an estimated $247 billion in real estate taxes, but by 2010, that figure climbed $476 billion. Of course, the housing market had by no means recovered by 2010, but that didn't matter -- homeowners were still on the hook for higher taxes.

Crosby visits children’s hospital with Stanley Cup in Halifax

  Crosby visits children’s hospital with Stanley Cup in Halifax Crosby visits children’s hospital with Stanley Cup in HalifaxPhil Pritchard, the Cup’s keeper, tweeted a photo of the Pittsburgh Penguins captain hoisting the trophy above his head beside an airplane in Halifax.

Pros of owning a home in retirement . It's not uncommon to grow attached to your home , so much so that you 're willing to hang onto it even once money gets tighter. But while homeownership is unquestionably expensive, here are some good reasons to own in retirement

You wouldn’t put 80 percent of your portfolio in a bond simply to protect against inflation (unless maybe you were nearing retirement ) so So lots of people argue that you should own a home because one day, you ’ll pay that home off and it’ll be yours, rather than continuing to pay rent for the rest of your life.

Then there's maintenance to consider. The average homeowner spends anywhere from 1% to 4% of his or her home's value on annual upkeep. Now if you happen to buy a new home in retirement, you can probably keep your maintenance costs to the lower end of that range. But if you're hanging onto a house you've been living in for years, chances are you'll be facing the higher end. For a $400,000 property, that's $16,000 a year on maintenance alone.

Regular upkeep aside, when you own a home, there's always the possibility of a major appliance going bad, or a significant repair popping up when you least expect it. If you're on a tight budget, which many retirees are, and you're suddenly forced to shell out $10,000 to replace a faulty roof, the financial impact could be downright catastrophic.

That's why in many cases, you're better off renting in retirement than owning. Yes, you will have to accept the fact that your rent will probably go up year after year, but if you sign a multiyear lease, you can mitigate this risk. And if your rent does go up to the point where you no longer feel it's affordable, there's always the option to pick up and move. Will that be easy? No. But it's an option nonetheless -- whereas ignoring a capsizing roof is not.

Toronto retirement home rents soar, putting some seniors in limbo

  Toronto retirement home rents soar, putting some seniors in limbo Before Patti Elizabeth’s aunt passed away, she was paying $5,200 a month for five years to live in a single room with a shared kitchenette in her old-age home in Whitby, Ont. Elizabeth, 58, fears she’ll never be able to afford to pay that much for a retirement home. She says her generation, the baby boomers, are lucky because some of them have pensions. But she worries their kids won’t. Her kids won’t be able to afford to pay for her to be in a home, either. “They don’t have the jobs; they don’t have that kind of money. I couldn’t possibly pay that, $5,000 is just an incredible amount of money,” she said. “Who has that?” That’s why she finally decided to welcome another of her elderly aunts into her home. She’ll soon move in. “I think that we need to be able to do that for everyone,” she said. “It just makes me crazy.” As housing prices across Greater Toronto rise and supply falls, the same is true for retirement residences, forcing seniors to deplete their savings, move in with family or move out of the city towards relative affordability. These homes — the all-inclusive kind you pay for, not the long-term care buildings you wait for if you’re extremely ill — can afford to name their price in a hot market. This year, vacancy rates in Ontario old-age homes reached their lowest point since 2001, dipping to 10.4 per cent, according to the Canada Mortgage and Housing Corporation’s latest seniors’ housing report. While the total supply of seniors’ housing grew by 2.

Your Money, Your Retirement , and the 2016 Presidential Election - What changes will you need to make to your portfolio should Hillary R. Clinton become president? Leffel, who lives in Florida and owns a home in Guanajuato, Mexico, examined 18 low-cost countries.

Already Retired . Time to Retire , Now What? Living in Retirement in Your 60s. Should I reverse Mortgage My Home ? But owning a home in retirement isn't all roses. Here's the downside of owning during your senior years

Again, there are benefits to owning a home in retirement that make it a viable option as well. On top of the aforementioned tax breaks, your home can serve as a source of equity, whether via a loan or a reverse mortgage. But if your savings are limited and you're worried about money, renting a home may be the better choice for your senior years. This way, you'll get a roof over your head, without the financial obligation to be the one to fix it.

SPONSORED: The $16,122 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known Social Security secrets could help ensure a boost in your retirement income. For example, one easy trick could pay you as much as $16,122 more each year. Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies. 


Montreal to save $6.2 million on traffic officers in new police labour deal .
Montreal will save about $6.2 million annually through the use of cadets as traffic officers on construction sites.Montreal will save about $6.2 million annually through the use of cadets as traffic officers on construction sites, Diane Bouchard, director of Montreal’s human resources service, announced Wednesday morning.

—   Share news in the SOC. Networks

Topical videos:

This is interesting!