Greetings! I trust that this will find you well and enjoying life.
As a retirement planner, I am seeing more and more clients downsize their homes and have a number of them considering moving to retirement communities. More late-stage baby boomers and retirees are seizing this window of opportunity to sell the family home and buy something smaller and more manageable for their golden years. Here are six key questions regarding retirement community life that can affect your decision, as you examine if this form of living is for you.
Will a retirement community home hold its value?
The Social Security Administration projects that by 2033, the number of older Americans will increase from 43.4 million today to 75.7 million. This indicates that the retiree and pre-retiree home market could likely be strong for the next ten to 15 years. However, if you’re a young pre-retiree considering a retirement community, there may be a smaller market for reselling when you pass away. Remember, the generation that followed baby boomers is much smaller, so there will likely be far less demand for senior-specific housing.
Will you be happy living among only people your age or older?
Bear in mind that if you move to a retirement community at a young age, it gives you time to adapt, make friends and take advantage of any active lifestyle amenities the community offers. However, you will also be among the youngest there and should consider how that will make you feel living among people who are much older than you. As you age in such a community you’ll eventually become one of the older ones. This isn’t such a bad thing, but bear in mind that if you live to a ripe old age you may well outlive many of your friends who live there. You may not feel the weight of that scenario if you remain in a neighborhood with a mix of old and young.
Are there rules regarding your children and grandchildren?
While a community with access to golf, tennis and swimming may sound like you’re living at a country club, it could be an exclusive club with rules. Ask if visiting children and grandchildren can also use those amenities and if there are restrictions related to how long they can stay with you.
How much have homeowner’s association (HOA) fees increased in the last 5,10 or 20 years?
Many age 55+ communities boast maintenance-free living, but just how much does it cost to have the grounds maintained and landscaped? Don’t just ask what HOA fees are today, ask how much they were five and ten years ago. If there are common buildings and infrastructure, find out when they were built or last updated and if there are any planned improvements in the future. If the community needs updates, you could see your fees increase significantly not long after you move in. In addition to the HOA fees, ask about the total out-of-pocket expenses, including any special assessments and fees. Do you have to pay extra to use amenities such as the golf course or tennis courts?
Is the community you’re considering in good financial shape?
Review its financial statements to see whether the association is financially solvent. See if the community is taking in the revenue it needs to pay for ongoing maintenance and repairs, plus any future upgrades.
Does the community offer access to onsite assisted living or 24-hour nursing care?
Many communities offer a variety of housing options to help you age in place, even if you eventually need full-time care. Compare the higher cost of moving into such a facility now versus staying where you are and spending more money later for full-time care if you need it.
Downsizing, maintenance-free living and moving into a community of age and economically
similar peers can be a good decision for some, but it’s not for everyone. Carefully consider your goals for housing, lifestyle, healthcare, finances and family before you make your decision. Be sure to give yourself ample time to research and analyze. I welcome the opportunity to have a discussion with you about it and to assist you in examining the financial issues surrounding this form of living for you. Don’t hesitate to call if you feel that I can help in any way with this or any other financial topic or issue.
Jeff Christian CFP, CRPC
Grab your courage with both hands.