Planning is the cornerstone of a successful retirement, but it doesn't start and end at financial planning--there's an intricate web of lifestyle considerations including one very big one: where and how you choose to live. Chances are a lot of the money you earned is already tied up in housing if you own your home and, if you don't, your mortgage or rent will continue to be one of your biggest expenses. This brings your home to the top of your retirement to do list. Here are some of your housing options for retirement:
Follow your heart: retirements should be long, happy, and healthy and accommodation has a major role to play. The housing options for retirement are only limited by your imagination--or budget, health and desires--but the main thing to consider is does it work for you?
Age in place: the desire to age in your current home is the highest amongst those who own their own homes outright. The benefits are obvious--a secure, familiar environment with the local community you know and love. But while you too may want to age in your current home, you'll need to weigh out whether or not it's financially feasible and if it's the family home, is its size and layout manageable as you age?
Retirement communities: retirement communities are one of the most popular ways to retire. Benefits include integrated levels of independent living and care, a built in community of other retirees and relevant support and services. Typically you'll buy your retirement living accommodations which may be a condo or villa unit--but you might not own it in the same way with the same freedom you'd own a normal house for if its community title, loans or licence, shares in a unity, or other variations of ownership, so it is important to do your research. It is also different to a normal purchase in that you'll usually have ongoing fees and charges--often even once you've left the retirement community. All retirement communities have their own contracts and it is important to pay attention to the fine print.
Upsize or downsize?: many Canadians choose to move houses at or around retirement. Typically, these empty nesters are looking to downsize and minimize maintenance. But they're also often looking to liquidate the cash they have tied up in the family home, so downsizing needs to be a carefully considered financial decision. Maybe you'll need to move away from the area you know and love to do this, but maybe not. Some downsizers rebuild a couple of condos or townhouses on the site or the old family home, some move to a favourite holiday destination, and some shift from a house to a condo unit or townhouse to remain close to family and friends. But not every Baby Boomer wants to downsize. Upsizing is usually associated with younger age groups, but a smaller number of Baby Boomers say that they would move into retirement in order to upsize. And why not? Retirees who want to upsize may be 'professional grandparents' who would like to be the centre of the extended family. But buyers beware, more house is more work, and make sure you consider things like stairs that can present a problem as you age.
Retire overseas: while the idea of retiring overseas has been popular in the UK and Europe for many years, changes in the Canadian dollar and reasonably priced airfares have now made renting in luxury on the pension a reality for some Canadians. Destinations like Bali and Thailand are growing in popularity with retirees. With great climates, awesome food and culture, affordable healthcare and low cost of living, it's hard not to join them in paradise. But before you do there are important things to consider. What happens if you don't like it? Could you afford to move back to where you lived before if it didn't work out? What are the healthcare and aged care support services like in a new country should you need them? What if the exchange rates change? How will you deal with being a long way from family and friends? Are there rules and restrictions about citizens from other countries owning property, doing business, etc.?
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