Strategies For Managing Home Expenses In Retirement

Without careful planning, retirees can find that their mortgage payment leaves them with little extra

Strategies For Managing Home Expenses In Retirement
May 16, 2016

One of the largest expenses that retirees have to budget for is the cost of their home. Those who still have to make mortgage payments may find that almost half of their income goes to make that payment. A 2014 study by the Employee Benefit Research Institute shows that home expenses made up 43 percent of the expenses for those who were over 75. For those who find themselves with little income after paying their mortgage bill, there are some options:

Refinance

Refinancing to take advantage of better interest rates can lower a homeowner’s monthly payment, but it may also put them in debt for longer periods of time. Those who are close to paying off their home may not want to add years of payments that a refinance would bring with it.



Downsize

Retirees often find that they do not want to spend as much time and energy in their home’s upkeep or that they do not need as much space as they once did. Downsizing to a smaller home or apartment can save a large amount of money not just in monthly payments but in property taxes and utility bills.

Relocate

Some retirees choose to relocate to a different city or state when they retire, and doing so can also bring some financial relief. Some areas have much lower property taxes and costs of living. Relocating to one of these areas can greatly impact a person’s monthly expenses.

Let the free MoneyTips Retirement Planner help you calculate when you can retire without jeopardizing your lifestyle.


Photo ©iStock.com/stevecoleimages

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Steffanie | 05.16.16 @ 14:53
We are about to enter this time of life with my Dad. These tips will be really helpful. I am not looking forward to helping him downsize.
Jonathan | 05.16.16 @ 14:53
As much in as many places you can!
Erin | 05.16.16 @ 14:53
I can see us trying all of these strategies when we retire. I'm not sure if we'll stay or we'll move, but I know I do not want to be spending a lot of money on housing each month.
Heather | 05.16.16 @ 14:53
These are some good tips. I am hopeful that by the time we retire our house would be paid off so that would be one less expense.
Elaine | 05.16.16 @ 14:54
I was so happy to see my parents pay off their home right before they retired. It put my mind and theirs at ease.
Stokes | 05.16.16 @ 14:55
Great tips for people headed toward retirement.
Carla Truett | 05.16.16 @ 14:55
I'm afraid that we will be in this situation when we retire because our payments are so high. Great tips for us to think about.
trish | 05.16.16 @ 14:56
I see us using this ear strategies when it's our time. Will share this with my parents
Jane | 05.16.16 @ 14:57
Downsizing and relocating has been what new retirees in my family have done. It's good advice, and sometimes people move near other other family members, making the adjustment easier.
$commenter.renderDisplayableName() | 12.04.16 @ 10:31
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