Should I stay or should I go?

One of the key initial questions that must be answered by retirees is whether to stay in their existing house, or downsize to a smaller house or retirement community.

I have just returned from the 2010 Melbourne Retirement & Lifestyle Expo and without a doubt, the most common question people were asking me was if they should stay in their existing house or move into a retirement community. My answers to them varied, as it really depended on their own personal situation, but I will freely admit that I do not hesitate to recommend that people stay in their existing home if I think it is the best thing for them.

So lets work through some of the questions…

Should I stay in my existing home?

Financially, you are almost always going to be better off staying in your existing home. Buying and selling incurs fees and charges that can take many years of capital growth to off-set. Even if the yard is too large and you need to get Jim’s Mowing in to do the gardens once a month, or a cleaner in to help you with the vacuuming, it can still be worth it.

I think the only time you should consider moving is if:

• You are alone and/or lonely
• You fear for your safety or have security concerns about your house or neighbourhood
• You do not drive and/or do not have a car
• You are bored
• You have an older property and it is likely that you are going to have to spend some $$ in the future on major items like roofing, flooring, plumbing or wiring

If you answer “YES” to any of the above its time to move on to the next question!

* Note here that I have not recommended that you downsize to unlock the equity in your house. There are some arrangements now where you can use your equity and stay in your house which I will cover in another blog at a later date.

Should I move into a retirement community or just a smaller house?

Let me make one point clear up front – a retirement community is about lifestyle. If you are bored, lonely or alone, or fear for your safety, then I recommend you consider a retirement community because it will enrich your life from just about every perspective.

If you already enjoy a busy retirement with a big social network and lots of activity, then you could address all of your concerns simply by moving to a newer, smaller, more secure and  better-located home. You would also want to be in good health, or have access to an emergency alarm pendant so that you wont have a fall on end up on your floor for three days until someone finds you.

I hope this helps you with your own decision-making process.

Have I missed anything? Feel free to leave a comment if you have anything to add.