When is a house your safe haven and when is it standing in the way of richer life experiences?
That’s the question more and more retirees are asking these days.
After years of analyzing their financial situation, the Wests decided to put the mortgage-free suburban house they had owned for 26 years on the market. They wanted to avoid the mid-Atlantic winters and considered moving to
But they decided it was too remote. They also ruled out
They considered renting their
Of the decision to sell a mortgage-free home,
The Applebaums — Joseph, 71, and Phyllis, 67, also decided to buy a place in
Their calculations were slightly different. They still had a mortgage on their home, where they had lived for 27 years. By selling the house, they could take the profit, buy in
For those 65 and older who have paid off their mortgage — approximately 70 percent of homeowners in that age group — the financial future looks bright.
Still, many still want to sell their homes to free up money that would give them more flexibility during retirement. So they sell or plan to sell their home, and create a less expensive lifestyle. For those who still have a mortgage, selling and moving to a less expensive area can create a mortgage-free lifestyle.
Close to 80 percent of the 41 million Americans age 65 and older are considered homeowners — whether or not they carry mortgage balances. That is the highest percentage of all age groups, according to the
While the overall homeownership rate has remained the same during the past decade, the percent of older owners with a mortgage increased to 30 percent in 2011, from 22 percent a decade earlier, according to a
Reasons include the refinancing boom of the 2000s, a first-home purchase later in life, smaller down payments and the use of home equity lines of credit, the report said. For 2013, the percentage of homeowners age 65 and older carrying mortgage debt remained at 30 percent, according to the C.F.P.B., which releases the data every two years.
“There is a definite trend that older Americans are carrying debt into their retirement years,” said
Older Americans have credit card debt and student loan debt, but the “largest part of the debt, without a doubt, is related to their mortgages,”
After more than one trip to
“New has a lot of appeal, especially at our age,”
Changing their lives won’t happen overnight. From the time they signed the papers, it was going to take 10 months for the house to be built, so they expect it to be ready in
The biggest gain is the sense of freedom that lies ahead. “We’re hoping our house sells early so we’ll be homeless for a few months,”
The calculations in trading one home for another are individual, and depend on the value of the house, the equity in it, income, anticipated future income and other expenses.
Those in the throes of change typically spend time analyzing the kind of life they want, how much income they will have and their costs.
With home and home-related expenses the largest cost for every age group age 50 and older, according to research from the
“They need to sit down and figure out their retirement plan — what’s coming in and what’s going out,”
The E.R.B.I. report, based on research from 2007 through 2011, shows declines in spending on housing costs, but whether the spending patterns will continue remains to be seen. “The crash had really changed some spending patterns,”
Even those with considerable investment portfolios are aware of the uncertainties in the financial markets. “They say, ‘I don’t know now what the return will be. The bottom line is I need to save more.’ That’s why we’re seeing these big spending cuts,”
According to a study from the
Among retirees with annual incomes below
Freeing up money from a house or other property that no longer meets your wants and needs is often the first step. “If you can be retired and not have a mortgage, it can be a lot better,” said
Adventure appealed to JanSuzanne Krasner and her husband, who had paid off their mortgage. Two years ago, they sold their house in
Next, they spent a month traveling in southern
“By moving to a less expensive area, it frees up money to travel,” said
For both the Krasners and the Wests, maintaining family ties were a priority and played a role in their decisions. Each of the couples has two grown daughters whom they want to be able to see.
“The rest didn’t matter,”
For the Wests, who are in the process of selecting the details of their new home, there’s a sense of the unknown ahead. Their new community is “carved out of a pine forest,”
“You’re looking at dirt. It’s exciting,” she said. “It’s daunting.”
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