Choosing a home and place to spend your retirement years can be very exciting, but for some it can also be a challenging process – especially without proper financial planning. This article from MarketWatch collects advice from financial and retirement advisers to highlight some of the biggest mistakes people make when searching for and purchasing their retirement home.
Buying that dream retirement home after all those years of dreaming is one of the biggest – and potentially one of the most difficult – decisions you can make. There’s a lot to consider. And you have to do it correctly.
“So many people I meet haven’t talked about it,” said Jim Heafner, president of Heafner Financial Solutions in Charlotte, N.C. “There has been no conversation or planning. They have been married 30 or 40 years. He thinks they are going to the mountains, she thinks they are going to the beach.
“Preplanning is really important,” he said. “These are hard conversations that you think people will talk about, but with busy lives they just don’t.”
Rodney Harrell, director of livable communities at the AARP Public Policy Institute in Washington, D.C., says children and grandchildren can be big factors. “It may be of crucial importance [to me] to live near my grandchildren; or to you, it may be nice but not necessary. You have to take into account your own preferences. It isn’t a one-size-fits-all home solution. Every reason to pick a home is a valid. The trick is to pick the best things on the list that meet your needs.”
One of the biggest mistakes is not having a plan.
“I had a couple in today,” said Heafner. “They will sell their place in five years and move to Hilton Head, S.C. My concern is, have they really tested out the location? For some people it’s more of the same. They just play more golf. For others it’s a whole change in lifestyle. Maybe it’s Florida or Arizona. They haven’t tested it out, haven’t talked to neighbors. I find some who bought that dream home and they can’t stand it there.
“Do your research and due diligence,” he said. “Spend time and vacation there. I hear people all the time say they will sell their home and buy an RV. Have you even tried an RV? You should rent one. Maybe you don’t like campfires. I find it unusual that people will send on thousands on an RV and haven’t tried it.”
