Things to Consider When Buying a Retirement Home

Buying a retirement home is something you can do in your 20s, 30s, or wait until your 60s. There isn’t a certain way you have to do it, but there are certain factors to consider before buying one to ensure it’s the home you can spend the rest of your life in.

When Should you Buy a Retirement Home?

You might wonder when you should buy your retirement home. Should you wait until you’re retired or buy it sooner?

There are pros and cons to each scenario.

Pros and Cons of Buying a Home Years Before Retirement

Many people buy their retirement homes before they retire. Some even buy it in their 30s or 40s, nowhere near retirement.


First, it may be easier to qualify for a mortgage when you’re younger and still working. The higher income may make qualifying easier, allowing you to own your home now when prices are affordable, and you can spread the cost out over 20 – 30 years.

Next, you can make money on your retirement home if you buy it now. However, if you don’t plan to use it until you retire, make it a rental home by listing it for short-term or long-term rental on sites like VRBO or AirBnB. Then, you can use the rental income to cover the mortgage costs and make a profit. At the very least, your mortgage payment is covered.

Of course, there are downsides to buying a home before retirement. For example, if you don’t rent it out or it has vacancies, you double your debt by having two mortgages, assuming you have a mortgage on your primary residence.

Owning a second home now also puts other financial and physical responsibilities on you like maintaining the home, paying the taxes, and keeping insurance on it. This could delay when you could retire because of the extra financial burden.

Pros and Cons of Buying a Home After you Retire

There are many benefits when you wait to buy a home during retirement.

First, you’ll know what you need regarding your physical abilities. For example, if stairs are an issue, you might consider a single-story home. You may also want to live somewhere other than where you originally planned when you were younger. Waiting ensures you get the home you need/want when you retire.

You may also have more money to pay for the home without a mortgage, which means no interest or closing costs. For example, if you sell your primary residence to buy your retirement home, you will likely have proceeds from the sale. If you don’t have a mortgage on your home, you can use the entire proceeds to buy the retirement home.

Of course, there are always downsides to consider.

If you need a mortgage to buy a retirement home, it could be more difficult in retirement. Plus, it means you’ll need more money in retirement to cover your bills, leaving you less money to do what you want in your golden years.

Top Factors to Consider When Buying a Retirement Home

Here are the top factors to consider whether you buy your retirement home now or when you retire.

Where will you Live?

Location is the number one factor when choosing where to live in retirement. If you buy a retirement home before retirement, consider factors such as:

  • Weather – What will you be able to handle in your older years? Do you want to deal with winter weather or prefer somewhere warmer?
  • Proximity to healthcare – Even if you’re in perfect health now, chances are you’ll need doctors as you get older, so consider the doctors you use or specialists you need and how accessible they may be if you move to another location.
  • Family and friends – Consider how close you want to be to family and friends, especially if you have grandchildren or rely on your family for support. Retirement communities can offer a built-in sense of community.

What can you Afford?

If you buy a retirement home before retirement, you might have it paid off before you retire. So that’s a great scenario.

If you buy one after retirement, you may still pay cash for it if you have proceeds from your primary home to pay for it. But beyond buying the house, think about the cost of living and maintaining the house, including taxes and insurance.

In retirement, you’ll likely have less money to spend on the cost of living, so be sure you choose a home that fits your retirement budget, not your current one.

What’s Around?

Think about what you need near you when you have a retirement home. Chances are you won’t travel much, or as you age, your ability to travel will decrease, so find somewhere you can get the most important things done easily without too much burden.

If you like to travel, consider the proximity of the home to the train station and airport or how accessible local highways are to the home. Also, consider how easy it is for loved ones to get to you should you need help.

Mistakes to Avoid When Buying a Retirement Home

As you consider the best retirement home to buy either before or after retirement, here are the top mistakes to avoid:

  • Buying a house, you can’t afford long term
  • Buying a house, you can’t maintain in your retirement years
  • Not thinking about amenities, healthcare, and other things you need nearby
  • Not considering your healthcare needs or physical changes as you age causing you to need another house that you can age in place in
  • Not thinking about the future and what might be most important to you then that’s different than now

Final Thoughts

Buying a retirement home or planning for it is the best way to plan for retirement. When you retire, you’ll have a home you can age in place in and enjoy your golden years. You can buy a home early and use it as an investment, or wait until you’re ready to leave your existing home and buy your retirement home. Either way, consider all the factors that affect your home in retirement to ensure you make the right choice!

Leave a Reply