What to Consider When Choosing Your Home To Retire In

What to Consider When Choosing Your Home To Retire In

Presented as a public service by Joe Peters of Coldwell Banker

As more and more baby boomers enter retirement age, the question of whether they should sell their homes and move has become a hot topic. In today’s housing market climate, with low available inventory in the starter and trade-up home categories, it makes sense to evaluate your home’s ability to adapt to your needs in retirement.

According to the National Association of Exclusive Buyers Agents (NAEBA), there are 7 factors that you should consider when choosing your retirement home.

1. Affordability

“It may be easy enough to purchase your home today but think long-term about your monthly costs. Account for property taxes, insurance, HOA fees, utilities – all the things that will be due whether or not you have a mortgage on the property.”

Would moving to a complex with homeowner association fees actually be cheaper than having to hire all the contractors you would need to maintain your home, lawn, etc.? Would your taxes go down significantly if you relocated? What is your monthly income going to be like in retirement?

2. Equity

“If you have equity in your current home, you may be able to apply it to the purchase of your next home. Maintaining a healthy amount of home equity gives you a source of emergency funds to tap, via a home equity loan or reverse mortgage.”

The equity you have in your current home may be enough to purchase your retirement home with little to no mortgage. Homeowners in the US gained an average of over $9,700 in equity last year.

3. Maintenance

“As we age, our tolerance for cleaning gutters, raking leaves and shoveling snow can go right out the window. A condominium with low-maintenance needs can be a literal lifesaver, if your health or physical abilities decline.”

As we mentioned earlier, would a condo with an HOA fee be worth the added peace of mind of not having to do the maintenance work yourself?

4. Security

“Elderly homeowners can be targets for scams or break-ins. Living in a home with security features, such as a manned gate house, resident-only access and a security system can bring peace of mind.”

As scary as that thought may be, any additional security is helpful. An extra set of eyes looking out for you always adds to peace of mind.

5. Pets

“Renting won’t do if the dog can’t come too! The companionship of pets can provide emotional and physical benefits.”

Consider all of your options when it comes to bringing your ‘furever’ friend with you to a new home. Will there be necessary additional deposits if you are renting or in a condo? Is the backyard fenced in? How far are you from your favorite veterinarian?

6. Mobility

“No one wants to picture themselves in a wheelchair or a walker, but the home layout must be able to accommodate limited mobility.”

Sixty is the new 40, right? People are living longer and are more active in retirement, but that doesn’t mean that down the road you won’t need your home to be more accessible. Installing handrails and making sure your hallways and doorways are wide enough may be a good reason to look for a home that was built to accommodate these needs.

7. Convenience

“Is the new home close to the golf course, or to shopping and dining? Do you have amenities within easy walking distance? This can add to home value!”

How close are you to your children and grandchildren? Would relocating to a new area make visits with family easier or more frequent? Beyond being close to your favorite stores and restaurants, there are a lot of factors to consider.

Bottom Line

When it comes to your forever home, evaluating your current house for its ability to adapt with you as you age can be the first step to guaranteeing your comfort in retirement. If after considering all these factors you find yourself curious about your options, let’s get together to evaluate your ability to sell your house in today’s market and get you into your dream retirement home!

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Charting the Growth of Renters Over the Age of 60

Charting the Growth of Renters Over the Age of 60

Presented as a public service by Joe Peters of Coldwell Banker

Cities in the South have seen a marked uptick in the share of households with renters aged 60 or over in the past decade.

Recent research from RentCafe illustrates that with the average age of Americans creeping upward, the share of renters aged 60 or older has risen dramatically in the past decade in many cities.

According to RentCafe:

Our top 30 oldest cities all have a median age over 39.6 and are mostly retirement cities in Florida, California, or Arizona. In fact, Florida is home to 12 of the oldest cities, with Cape Coral, first in our top, boasting a median age of 47.9, followed by Hialeah, with 46.5. Sunny Scottsdale, AZ is third in our top, with a median age of 46, proving once more its high popularity among retirees in search of warm days and entertainment.

The research also found that renter households aged 60 and over drove the past decade’s surge in renters, with a 43 percent increase, from 6.55 million to 9.37 million in 2017, greatly outpacing younger age groups. Those aged 35 to 59 grew by 17 percent from 16.33 million to 19.11 million, while renters aged under 35 posted the slowest increase rate of 7 percent, rising from 13.99 million to 14.90 million.

According to the firm:

According to our projection based on the trend witnessed between 2007 and 2017, we expect the year 2035 will mark a major demographic shift with the share of 60+ renter households reaching somewhere around 31% and becoming the second highest share among all age groups. Despite being the majority, those aged between 35 and 59 will likely see a decrease in their share of renter households, dropping from 44% in 2017 to an estimated 43% in 2035.

The following gallery features a list of the 25 cities and how the share of renters aged 60 or older has risen over the past 10 years. In addition, the there is data on the total number of 60+ renters as well as the shares of 34-59 renters and 34 and under renters and the median age of all renters in each city.

 


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A 50+ Home for the Next 50

A 50+ Home for the Next 50

Flexible design, health focus, sustainability and technology create a whole new kind of aging in place.

Reposted from Builderonline.com

According to a 2016 Freddie Mac survey, more than 18 million people 55 and older are going to be in the market for a new home in the next few years. This supports data from KB Home’s exclusive market survey data that finds a jump of 11 percentage points in 55+ buyers of both new and resale homes in our markets over the last decade. But today’s older buyers are worlds apart from previous generations and so is their dream home. That’s why we chose to focus our new KB Home ProjeKt on the 50+ home of the future.

“ProjeKt is a 50+ home for the next 50,” said Dan Bridleman, senior vice president of sustainability, technology and strategic sourcing for KB Home. “This isn’t your father’s retirement. People are living longer, working longer, having children later, creating flexible new family structures and work lives. And they want a home that reflects that.”

Inspired by the huge leaps we’ve seen in this market over the last few years, the new ProjeKt envisions and demonstrates how a new concept of home can offer an entirely different way to look at 50+ living, one that integrates health, sustainability and technology-driven innovation into a home that supports holistic wellness for both its residents and the environment.

The Gig Economy Isn’t Just for Twentysomethings

More workers of every age are earning their living as freelancers, or supplementing their income with gig-economy jobs to earn additional money for retirement. More than one in three workers currently are freelancers and of those freelancers over 55, 49% are using supplemental work to help fund their retirement, according to a 2018 Betterment report on the Gig Economy and the Future of Retirement. In addition, workers today are much more likely to transition into retirement with freelance work and small businesses instead of just throwing the switch one day on a traditional retirement. A recent Gallup poll found that 41% of workers today plan to work past the age of 65, up from just 12% in 1995.

The ProjeKt home reflects this new reality with flexible spaces that are ideal for a home office or yoga room during the day and an entertainment area at night, making the same square footage do double duty in an efficient, thoughtfully designed way. These same spaces can later be adapted to become an additional bedroom for an adult child, elderly parent or caretaker.

Supporting Shifting Family Structures and Needs

The home of the future has to be flexible, particularly for today’s 50+ buyer who may pack a lot of life stages into their years in their home. More homes today have multiple generations living under one roof, whether older relatives who may be helping with children or adult children returning home while making career or life transitions, or any number of other family configurations. The KB Home ProjeKt is designed as a traditional two-story family home that can accommodate any number of family configurations. But the innovative ProjeKt design also allows for literal “downsizing” within your existing home, with a second floor that is designed to be easily separated into an independent unit that’s ideal for adult children, older relatives, live-in caretakers, or even short- or long-term rental income.

Today’s 50+ Buyer Wants Connection Not Restriction

ProjeKt is not designed for the buyer looking for typical age-restricted communities. It’s for the buyer who wants to be part of a thriving community that includes strong connections with their neighbors of all ages.

“When we hold focus groups, many 50+ buyers tell us that they don’t like age-restricted communities. They say it feels like high school, just 40 years later,” said Bridleman. “Today’s 50+ population wants to be a part of life, not apart from it. They’re looking for connection and community — and that spans generations.”

Inspirada, a master plan community in the Las Vegas area and home to the KB Home ProjeKt, is a great example of this trend.

“Our Inspirada community, for example, is located near an age-restricted community and we actually have multiple sales from buyers literally driving away from those restrictions. They’ve stopped by our community on the way out and found what they’re looking for in a thriving community that spans all ages,” said Jen Haack, KB Home’s senior manager of strategic marketing for the Las Vegas division.

KB Home is all about relationships. The relationships between builder and buyer, homeowner and home, home and community, neighbor and neighbor. That spirit and commitment are reflected in the design of the ProjeKt community. ProjeKt is more than a single home; it is part of a larger virtual community designed to support this new vision of future living and greater inter-connectedness to serve as an antidote to today’s increasingly isolated lifestyles.

Redefining Home Health Care

Every day we are learning more about how important our living environments are to our health. In fact, the U.S. Centers for Disease Control and Prevention (CDC) has concluded that physical and social environments are the largest determinants of our health. Having a home that supports long-term health is going to be increasingly important to all home buyers in the future, but in particular the 50+ buyer who is likely to spend more hours in their home as they wind down their work life outside the home. The KB Home ProjeKt is designed to actively promote health with restorative and rejuvenating features, from circadian lighting that promotes sleep and greater mental health to biophilic design elements that bring nature into daily living. In addition, a suite of technology-driven connected capabilities create an innovative health partnership between homeowner and home and greater control, comfort, safety and independence for the years to come.

All of these features are creating where tomorrow lives for the 50+ home buyer of the future and inspiring how we serve the evolving needs of today’s 50+ home buyer. KB Home, its innovations collaborators, and its partners at Builder and Hanley Wood are unveiling the 2019 KB Home ProjeKt in Las Vegas in February 2019. Sign up here to receive updates as we continue to share more details and sneak previews of the home in-progress.

 

 


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Will Your Current House Fit Your Needs in Retirement?

Will Your Current House Fit Your Needs in Retirement?

 

As more and more baby boomers enter retirement age, the question of whether or not to sell their homes and move will become a hot topic. In today’s housing market climate, with low available inventory in the starter and trade-up home categories, it makes sense to evaluate your home’s ability to adapt to your needs in retirement.

According to the National Association of Exclusive Buyers Agents (NAEBA), there are 7 factors that you should consider when choosing your retirement home.1

1. Affordability

“It may be easy enough to afford your home today but think long-term about your monthly costs. Account for property taxes, insurance, HOA fees, utilities – all the things that will be due whether or not you have a mortgage on the property.”

Would moving to a complex with homeowner association (HOA) fees actually be cheaper than having to hire all the contractors you would need to maintain your home, lawn, etc.? Would your taxes go down significantly if you relocated? What is your monthly income going to be like in retirement?

2. Equity

“If you have equity in your current home, you may be able to apply it to the purchase of your next home. Maintaining a healthy amount of home equity gives you a source of emergency funds to tap, via a home equity loan or reverse mortgage.”

The equity you have in your current home may be enough to purchase your retirement home with little to no mortgage. Homeowners in the US gained an average of over $16,300 in equity last year.

3. Maintenance

“As we age, our tolerance for cleaning gutters, raking leaves and shoveling snow can go right out the window. A condominium with low-maintenance needs can be a literal lifesaver, if your health or physical abilities decline.”

As we mentioned earlier, would a condo with an HOA fee be worth the added peace of mind in knowing that you do not have to do the maintenance work yourself?

4. Security

“Elderly homeowners can be targets for scams or break-ins. Living in a home with security features, such as a manned gate house, resident-only access and a security system can bring peace of mind.”

As scary as that thought may be, any additional security and an extra set of eyes looking out for you always adds to peace of mind.

5. Pets

“Renting won’t do if the dog can’t come too! The companionship of pets can provide emotional and physical benefits.”

Evaluate all of your options when it comes to bringing your ‘furever’ friend with you to a new home. Will there be necessary additional deposits if you are renting or moving in to a condo? Is the backyard fenced in? How far are you from your favorite veterinarian?

6. Mobility

“No one wants to picture themselves in a wheelchair or a walker, but the home layout must be able to accommodate limited mobility.”

Sixty is the new 40, right? People are living longer and are more active in retirement, but that doesn’t mean that down the road you won’t need your home to be more accessible. Having to install handrails and make sure that your hallways and doorways are wide enough may be a good reason to look for a home that was built to accommodate these needs.

7. Convenience

“Is the new home close to the golf course, or to shopping and dining? Do you have amenities within easy walking distance? This can add to home value!”

How close are you to your children and grandchildren? Would relocating to a new area make visits with family easier or more frequent? Beyond being close to your favorite stores and restaurants, there are a lot of factors to consider.

Bottom Line

When it comes to your forever home, evaluating your current house for its ability to adapt with you as you age can be the first step to guaranteeing your comfort in retirement. If after considering all these factors you find yourself curious about your options, let’s get together to evaluate your ability to sell your house in today’s market and get you into your dream retirement home!

 


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Retired seniors’ guide to downsizing in Hunterdon and Somerset Counties

Retired seniors’ guide to downsizing in Hunterdon and Somerset Counties

When it comes time to consider downsizing your home, there are a mix of emotions and stressers you may have never encountered before. For seniors, it’s a situation that sometimes comes about out of necessity and sometimes simply as a way of improving the quality of retirement years.

As the number of Baby Boomers entering retirement continues to climb in the US, the reasons to start downsizing are more apparent than ever:

  1. Economic necessity. It’s common for many older adults to be faced with unexpected medical expenses, growing homeowners insurance rates, and rising utility costs. Selling the house and moving into a more affordable space is often the solution.
  2. Health concerns. Many seniors downsize to a home where at-home care is more convenient and there are fewer everyday obstacles to maintaining good health.
  3. Convenience. If you’re tired of doing all the housework that comes with a larger home, you’re not alone. A lot of retirees opt for smaller homes where upkeep is less of a responsibility.

In terms of the cost benefits, retired seniors stand to save significantly when moving to a smaller space. Consider that for the typical single-family home, heating and cooling accounts for 42% of the energy bill, according to the U.S. Department of Energy. When the square footage of your home shrinks, so does that energy bill.

Moving to a smaller home could also help you save on:

  • Mortgage payments
  • Property taxes
  • Maintenance (lawn, pest control, snow removal)

If you’re preparing for retirement or have already retired and you’re now considering downsizing, know that you’re in good company. A poll by the Demand Institute concludes that 37% of Baby Boomers plan to move later in life. Of those planning to move again after retirement, 47% said they’d like to downsize. Since there are roughly 75 million Baby Boomers in the US, we can expect roughly 10 million retirees to downsize in the coming decades.

Read on for helpful tips and guidance as you think about what matters most for your retirement, including the home you envision yourself in.

Budgeting for a downsize

Choosing to downsize to a smaller home in retirement isn’t always motivated by economics, but it is always affected by it. Even for retirees belonging to a high tax bracket, downsizing is a consideration for practical reasons:

No matter why you’re considering a new home, putting together a well-thought out budget you can stick to is a wise first step. We can break your budgeting plan down into several key points you should account for:

What are you paying now? What will you pay in a downsized home?

Make a list of all the expenses associated with your current home. This should include: mortgage payments, utility bills, maintenance costs, HOA fees, and everything else you pay on a monthly basis. You’ll be able to calculate these same expenses for your new, smaller home (or at least come up with a realistic estimate).

To figure out the monthly mortgage payment for your new home, simply note its list price and plug it into Bankrate’s mortgage calculator. You’ll be able to change the mortgage term, down payment amount, and mortgage rate—giving you a very clear idea of what your mortgage payment will be at the new home you’re considering.

After coming up with your “new” mortgage payment, you should also be able to determine a rough estimate for utility costs. If you’re thinking about moving out of state, take a look at the U.S. Energy Information Administration’s recent numbers for average monthly bills for single family homes by state. If you’re downsizing but also moving to a state where energy costs are on average higher, the savings may not be as great as you’d hoped. However, differences in energy costs can also work in your favor.

Let’s say you currently live in Connecticut, where energy bills are among the highest in the nation at around $142 per month. If you move to Florida, where monthly energy bills are $123 on average, you’ll save a couple hundred dollars a year on energy alone.

Find out if your target home has an HOA, and also take into account things like lawn services. Add these expenses up and the overall cost benefits of downsizing will become clear.

What’s your current income?

Preparing for a move is a great reason to reassess your financial big picture. Everyone’s financial outlook is unique, so taking the time to piece together all sources of income you have, as well as savings accounts and more, will help you develop a game plan.

Critical questions to ask yourself:

  • If you’re not yet retired, how realistic is your goal retirement date?
  • What alternative sources of income do you have?
  • Will you be applying for Social Security? If so, when? (Note: the age at which you are eligible for Social Security is between 66-67, depending on the year you were born.)

Answer these questions to determine what your monthly income is, how much you have in savings, and what a comfortable mortgage payment will be for your next home.

What will it cost to sell your home and buy another?

Most retirees have been through the home-selling process before, but many haven’t in years, maybe decades. Take into account the extra fees and expenses that come into play when selling a home:

  • Realtor’s commission. The fee you’ll have to pay your realtor is typically 5-6% of the sale cost.
  • Closing costs. Depending on the real estate market you live in, you may be asked to take care of closing costs, which include property taxes, attorney fees, and other miscellaneous fees.
  • Inspections and home repairs. Buyers want thorough home inspections before signing on the dotted line; if any structural, electrical, or plumbing issues come up, you may have to cover those expenses.
  • Mortgage payoff. If your loan has a penalty for paying off the mortgage early, you’ll have an extra expense you may not have already accounted for. The sum you make from selling the home will mostly go into paying off the current mortgage.

The responsibility of some of these costs can shift from homeowner to homebuyer, so knowing exactly where you stand with these fees is a critical component to your downsizing budget.

Although there are many reasons for downsizing, budgeting carefully to make your new home less expensive than your current home is a huge benefit. It’s easy to lose track of all the small expenses that come with a move, but with a little diligence, you can save big in the long run.

What’s the plan?

Once your budget is in order, you’ll have to get the wheels turning on a strategy. There are a lot of moving parts in play, so breaking down your plan into simpler terms is a good place to start:

Selling your home and assets

Will you use a realtor or opt to sell the home yourself?

Keep in mind that selling the home yourself will entail a whole new list of responsibilities and tasks that may delay your moving process beyond your original timeline.

Will you be selling a car?

If you don’t do much driving, don’t want the responsibility, do want the money, or have a health concern keeping you from driving, selling a car is a wise decision. Many retired couples who have two cars and will sell at least one when downsizing as a way to collect some cash and free up space.

What other assets do you have?

A bittersweet, yet rewarding, part of downsizing is getting rid of stuff you no longer need. Whether that means valuables you no longer need or junk taking up space in your garage, let it go! You’ll be surprised at how freeing it is to clear out the basement and get paid for the stuff you haven’t used in ages.

Finding a place to live

Would you prefer to stay in the same area or are you excited about moving to a new place? If you’re moving somewhere new, take into consideration all the amenities you’ll need now and later on. Check for proximity to hospitals, grocery stores, and other essentials. Downsizing should make life easier—if you have to travel 45 mins to weekly doctor appointments, think about how that will affect your quality of life.

Considering all housing options

Single-family home — With a smaller single-family home, you can expect a similar lifestyle to the one you live now, but with fewer responsibilities and less clutter.

Condo/Townhome — Condos and townhomes are excellent options for retired seniors who value their freedom and self-sufficiency and also want to get off the hook for property maintenance. Don’t forget to take a look at HOA fees.

Assisted living community — Assisted living communities provide housing, meal prep, and health-related services for seniors. Many include luxurious amenities and a more thorough level personal care. Assisted living is an option for seniors with health concerns.

Move in with your adult children — If you’ll be living with family, any financial burdens you had in your own home will be eased. Being close to children and grandchildren is another benefit of moving in with family. Not enough room at their home? Do some research on “Granny Pods,” the latest trend in senior living. Granny Pods are essentially tiny homes that can be built in the backyard of your adult child’s home. Seniors who want to live with their kids can buy a Granny Pod and be close to home without feeling like a burden.

Finding a new mortgage

Downsizing to a new home in your retirement years puts you in a unique position when it comes to finding a mortgage.

After selling your old home and extra assets, you’ll be in a position to apply for a decent short-term mortgage with manageable monthly payments. Be sure to check mortgage rates often and track trends in your new area to secure the best loan you can. You’ll most likely be interested in one of the following:

  • 10-year mortgage. The shortest-term mortgage and usually the one with the lowest rates, ten-year mortgages are great options for those who want to quickly accrue equity in their home and pay less interest than they would with a longer mortgage. Monthly payments will be higher than with other term-lengths, but if it is still lower than the payment you have at your current home, it’s worth it.
  • 15-year mortgage. Fifteen-year terms will also carry lower mortgage rates and APRs than longer term mortgages, though obviously not as low as with a ten-year term. If you want to get the house paid off as quickly as possible but you aren’t comfortable with the monthly payment associated with a ten-year mortgage, consider a fifteen-year term instead. You’ll have a little more leeway in monthly spending while still paying off the home relatively quickly.
  • Reverse mortgage. If you want to tap into your current home’s equity before moving out, consider a reverse mortgage. Your bank will submit payments to you based on a percentage of the equity you have in your home and you won’t need to immediately pay it back. Loans don’t need to be paid back until the homeowner sells the home or dies, making reverse mortgages an intriguing retirement tool for seniors who are thinking about downsizing to a new home.

No matter the reason you have for considering downsizing, you are wise to contemplate its advantages. Not only do you have the opportunity to start anew, perhaps in closer proximity to family, but you can drastically improve your quality of life in retirement. By downsizing to a smaller home, you are freed from the upkeep responsibilities of owning a large home. You’ll potentially save big on standard costs associated with homeownership and most importantly of all, you can finally take time to relax.


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