If you’re coming up on retirement, you have some decisions to make if you’re planning to buy a home. If you’re already retired, you have a few other decisions to make, as well. As a retiree you may be on a fixed income, but there are plenty of stress-free budget planning options if you want to save for and buy a home. When you consider budget planning for buying a home in your retirement years, here are a few different issues you’ll want to think through. That way you have the best chance of planning your budget and getting the home you really want to enjoy in retirement.
1). Will your Social Security be enough?
Depending on how long you’ve worked and your level of income throughout the years, the Social Security payments you receive after you retire may not be enough to let you buy your own home or move up from the home you currently have. That’s an important consideration while you’re still working, but if you’ve already retired or are very close to retirement age, there isn’t a lot you can do in order to make your Social Security rise. In those instances, you can explore options for lower-priced homes or programs that may help you buy what you’re looking for.
2). How is that IRA doing?
One of the ways you can have more money in retirement is through an IRA. If you’re still working and haven’t started one yet, it may be time to consider it. Even if you only save for a few years before you retire, you can certainly have some extra cash. That can help you put a bigger down payment on your home, and get a house that really works for you. If your IRA isn’t performing the way you expect, or you haven’t been maxing it out every year, making some changes can mean a better retirement house to meet your needs.
3). Is your 401k growing?
Planning a budget for buying a house can be different when you’re retired, but that doesn’t mean it has to be difficult. If you have a 401k, the money that you have saved over your working years can really be made to work for you in retirement. Talking with your financial planner is an excellent way to be sure you have a 401k that is doing well, and that will help you focus on using all or part of that saved money to purchase a home once you retire.
4). Are you still putting money in your change jar?
Large savings plans like the 401k or IRA aren’t the only things you want to consider when it comes to having a stress-free budget for buying a home in retirement. There are plenty of small ways that can be used, as well. Saving up change is an easy way to have some extra money for a home, and can help you with a down payment so you can avoid PMI (private mortgage insurance) and other expenses that can come along with a small down payment. Overall, the little things really do add up and become the big things when you’re buying a home in retirement.
5). How big of a house do you really need?
As you plan for the great house you’ll have in retirement, you want to carefully consider what you really need. You may not find it necessary to have a great big house, since many people downsize when they retire. If the kids are out of the house and things are quieter, downsizing and buying a smaller house can be an excellent way to make your new home affordable and still help you really enjoy your retirement years. That can also reduce a lot of stress, which makes things easier for you in all kinds of ways.
6). Will your company provide you with a pension?
If you’re ready to buy a home that fits your budget, you should consider some of the small ways to save big. Also take into account a pension, if you have one. Not every company still offers one, but there are some companies that provide pensions to their retirees. When you retire from one of these companies, you’ll get money every month that you can use as income and save for a down payment. If you have that coupled with Social Security, you could easily have enough income to purchase a house that you’ll really love for your retirement years, and that’s never a bad thing. Just be clear on whether your company offers a pension, because a lot of companies today no longer do so.
7). Have you talked to your lender lately?
You don’t have to have a big income to have a great budget, with some stress-free planning suggestions. You will also want to make sure you talk to your lender, because they can give you good ideas about how to be ready for your home in retirement, and the kinds of things you might need to do or change before you actually buy. You want to be able to qualify for the home you love, and you need to know early on if that’s not going to be possible. The sooner you work with your lender and find out where you stand financially, the better off you’ll be when it comes to buying your retirement home.
2 Point Highlight
As a retiree you may be on a fixed income, but there are plenty of stress-free budget planning options if you want to save for and buy a home.
You don’t have to have a big income to have a great budget, with some stress-free planning suggestions.
