According to a recent report by the Social Security Administration (SSA), housing expenses make the top of the list of the largest household costs for individuals aged 65-74 with an average of 33 percent, followed by transportation (16 percent), and out-of-pocket health care (12 percent).1 For this reason, many people getting ready to retire (and even those who are already there) are looking for options to help them control household expenses and keep more of their hard-earned retirement dollars.
The good news is that there are several ways that you can save money when it comes to housing in retirement, besides paying off your mortgage. As part of Protective Life's effort to provide helpful financial, retirement and life insurance information, we'd like to share our top three options.
We understand the pride of being a homeowner. But even if you own your home free and clear, maintaining a home can be expensive. And if you add up costs associated with weekly lawn care, plumbing and electrical repairs, having to replace/repair appliances or a new roof (and don't forget property taxes and insurance), it may be more cost effective to leave all that fun stuff behind and just rent.
Think about downsizing to a townhouse or condo association
If you want to sell your home, but being a renter just isn't your thing, then you may want to consider purchasing a townhouse or condo. In nearly every state, there are entire neighborhoods devoted to seniors and people age 50 and up. Many townhouse and condo associations provide a secure and/or gated environment for residents, and include community centers with activities, yard maintenance and handyman services. They also typically include things such as major appliances. By downsizing, you may be able to enjoy having your own place, but with a lot less expenses and additional social amenities to boot!
Consider taking on a boarder
If after years of paying down a mortgage you simply can't fathom the thought of moving into a rental home, you may want to rent out a spare bedroom. Not only can this help defray some of your monthly housing expenses, but retirees who live alone might find the additional company welcoming. Of course, you'll want to be very selective as to who you rent to. Some good choices may include college students who are away from home, or even an adult grandchild, niece or nephew.
Learn more about saving for retirement.