Should You Stay In Your Home Or Move During Retirement?

Apr 2, 2018 12:00:00 AM / by Darwin Bayston, CFA

move during retirement

The choice about where to live in retirement is one of the most crucial decisions that a senior makes. It’s not just a major financial consideration, it’s also a highly emotional issue as a retiree’s home is often the anchor to their golden years.

“One needs to think about where to live, how long to stay there, and whether to move later in retirement,” writes Wade Pfau, Ph.D., professor of retirement income at The American College, and contributor to Forbes.com. “There are plenty of justifications for either staying put or moving early in retirement.”

There are a few important questions that a senior should ask before deciding whether to stay in their home or to relocate during retirement:

1. Are you making accurate comparisons?

If you stay in your home, you may need to make improvements or renovations in the future to accommodate changing needs. If you move to a new home, you may incur expenses associated with fix-up costs and moving expenses. Make sure you are considering total costs in either scenario.

 

2. Are you open to renting?

“It can be hard for retirees who have spent their lives building equity in their homes—and being taught about the virtues of homeownership—to become renters,” reported The Wall Street Journal. “But renting a home in a city before buying can give retirees a chance to really know if it’s the place they want to spend retirement.” Moreover, the cost of ownership in many locations actually exceeds the cost of renting, so it may be prudent to consider this option for both short- and long-term possibilities.

 

3. Where will you have access to important services?

Every consumer looks into the quality of restaurants, supermarkets and other day-to-day retail offerings when scouting out a possible new residential location. Seniors must be especially concerned about practical considerations such as the number of nearby physicians who accept Medicare, convenient transportation for those who are unable to drive, and community centers with special programs for seniors.

 

4. Would you prefer to age in place or have a change of scenery?

Many people dream about moving to some exotic location for their golden years, but the truth is that 85 percent of retirees stay in the area where they raised their families, according to Realtor.com. Think seriously about whether you’re willing to trade your current community for a new one, weighing the pros and cons of aging in place versus charting a new course.

Whether you choose to stay in your home or move during retirement, it will be important to have ample cash on hand that can fund renovations of your existing home or the purchase of a new one. Many seniors are surprised to learn that one potential asset for generating immediate cash is a life insurance policy.

A life insurance policy is considered your personal property and—as such—you have the right to sell that policy any time you like. When a consumer sells a policy in a “life settlement” transaction, the policy owner receives a cash payment and the purchaser of the policy assumes all future premium payments—then receives the death benefit upon the death of the insured. Candidates for life settlements are typically aged 70 years or older, with a life insurance policy that has a death benefit of at least $100,000.

To learn more about life settlements, visit www.LISA.org or call the LISA office today at (888) 672-3917.

Darwin Bayston, CFA

Written by Darwin Bayston, CFA

Darwin Bayston is President and CEO of the Life Insurance Settlement Association (LISA). His charge is to extend the outreach of the Association to all participants of the life settlement industry from consumers to capital providers, including producers, brokers, providers and service providers who are part of the life settlement market. He was previously Managing Director of Life Settlement Consulting & Management (LSCM), founded in 2004 and specialized in life settlement policy and portfolio valuations, and life expectancy analysis. He has published several articles and participated as speaker at a number of life settlement conferences. Previous to that he operated an investment advisory firm. From 1980 to 1993, he served in several capacities, including President and CEO the CFA Institute (and its predecessor organizations). While at CFA, he founded the continuing education program, was editor of the CFA Digest and supervised research projects funded by the Research Foundation of the ICFA. He began his career as an investment analyst with a Midwest life insurance company. Mr. Bayston has been Chairman of the Martha Jefferson Hospital Foundation ($100 million), a member of the Hospital’s Finance Committee and a past member of the Board of the Institute for Quantitative Research and Finance (Q Group).