Retirement – Should I move and should I rent?

BY: ANDREW STEWART 

In my last article, I spoke about information regarding parental leave for men, fathers and soon to be fathers and also the need to further the conversation about male depression. Now let’s have a discussion about retirement and home ownership. Maybe you’re thinking about moving or if renting instead of owning a property in your retirement years is better? Let’s talk about a few points you may not have considered yet.

Sunny skies and warm breezes sound great, but in reality, you might be better off retiring closer to home. Retirement is supposed to be a time when people think about moving to places like Jamaica and Florida to sip drinks on the beach, but in reality, a huge percentage of Canadians are happy to remain right where they are. One AARP surveyed people 60 and older about reasons for staying close to home and the results include:

• Liking their current home as is: 85%
• Wanting to remain close to family and friends: 66%
• Avoiding the hassle of moving: 50%

Which brings me to an article I read in loopjamaica.com about the President of the Jamaica Association for the Resettlement of Returning Residents, Percival LaTouche, urging Jamaicans overseas not to return home. LaTouche made the comments after the news about 44-year-old Karen Cleary, whose body was found buried in a shallow grave on her property in Boscobel, St Mary. Karen was building her dream home in Jamaica.

Few of us like to think about the reality, but life does not go on forever. As we age, mortality grows ever closer. If you suddenly lose a spouse after moving across the country, you might end up feeling isolated and depressed. This is especially true if such a sad turn of events occurs soon after you have relocated.

As we age, opportunities to meet people and socialize can dwindle. Perhaps that’s because we are no longer working, or health problems prevent us from getting out and about. Or maybe we just don’t have the energy to make a bunch of new friends. Remaining in your community gives you access to people who have known you for years, perhaps even a lifetime. It’s even better if you have family members nearby. Having supportive loved ones close at hand can be crucial as you age and rely on to help more than ever before.

Renting could be a great option for retirement. Owning a home is a great way to build wealth over time, but homeownership carries many financial responsibilities. In addition to paying off a mortgage, you have to maintain homeowner insurance, pay property taxes and budget for ongoing maintenance. Renting relieves you of those burdens. Your only concern is paying the monthly rent. A home you purchased when you were younger and working may no longer meet your needs in retirement. Perhaps it’s larger than necessary if your children have grown. Selling it can give you income to fully enjoy your life in retirement. You also will gain the freedom to live where you like.

I know my dad is worried about selling his home, that it would leave less wealth to pass on to his children. A life insurance policy could solve that worry and there are strategies that you could access the equity in your home to fund the policy and receive tax deductions at the same time.

When you rent, you can choose a place that suits your current needs. If you want to reduce your dependence on driving, moving to a rental that’s close to public transportation and shopping you can walk to makes sense. If you need help with day-to-day activities, such as dressing or cooking, one solution is to rent a unit in an assisted-living community. When you own a home, you aren’t free to move anytime you’d like. Selling a dwelling is a major effort. Perhaps improvements will be needed to raise your home’s market value. If the economy is suffering, you may need to postpone the sale in order to sell your home for its full value.

Living closer to children and grandchildren is a big deal for my mother. She has a strong desire to see her children more often and to play a greater role in her grandchildren’s lives. If your children live in different communities, you can divide your time among them, changing new rental homes when it suits you.

In the end, it will always be a personal choice, just try and do what makes you happy!