As retirement approaches, many couples are faced with crucial decisions about their living arrangements. One such couple recently asked financial expert Suze Orman for advice on whether to buy a home or rent a luxury senior apartment.
The couple is in good financial health, with a combined monthly income of more than $9,000 from pensions and Social Security, savings of about $100,000, and $850,000 in an IRA, annuity and Roth account.
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Orman first emphasized the couple’s solid financial position, noting that they have no debt and can sell their current home for $450,000 to $500,000 without paying capital gains taxes. This financial freedom means that buying or renting isn’t strictly about money, but about lifestyle preferences and practical considerations.
She pointed to the physical demands of home maintenance as a major factor for retirees. “They are in their 70s and are not sure if they can handle the challenge of daily household maintenance at their age,” she said. KT KT echoed these concerns, stressing that such tasks become increasingly difficult as people age.
“After 70, you start to feel it,” KT noted, emphasizing the importance of considering your physical capabilities when determining your living situation.
The couple is torn between the husband’s preference for buying a home and the wife’s preference for a luxury senior apartment. The wife enjoys socializing and traveling, and takes advantage of the amenities and services such communities offer.
Suze Orman made a compelling case for the woman’s choice, focusing on the benefits of senior living communities. “You have a community around you,” she said, recounting the positive experiences of both her mother and KT’s mother in similar settings. These communities offer a variety of activities and social opportunities, such as happy hours, educational classes, movies, swimming and golf.
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Orman stressed the importance of moving to a senior living community while both partners are healthy. “In most cases, you can’t move in if one of you is seriously ill,” she advised, urging the couple to make the move as soon as possible. She also noted that women have a longer life expectancy, which could leave the wife running the household alone if her husband dies first.
Orman humorously cautioned, “This part of the answer your husband probably shouldn’t hear,” referring to the predominantly female population in senior communities and the social benefits for the few men who live there.
Financial experts often advise evaluating the costs and benefits of both options for seniors with existing homes like this couple. Selling a home can free up equity that can be used to fund other retirement needs or investments, while renting can simplify life by eliminating the need for ongoing maintenance and large, unexpected expenses.
While buying a home can offer stability and potential capital growth, renting can provide a more carefree lifestyle, which is especially valuable in later life.
Financially, the couple can afford either option. However, Orman leaned toward the wife’s preference for a senior community, emphasizing the convenience and reduced responsibilities. She advised the husband to “listen to your wife, because in the long run, you’ll be so glad you did.”
As you explore your retirement plan options, remember that the right choice depends on your individual needs and priorities. Consider factors such as home maintenance, social involvement, and desired lifestyle when making this important decision. Consulting with a financial advisor can provide valuable guidance and ensure you make the best choice for your golden years.
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This article Retired Couple Earns Over $9,000 a Month on $1 Million in Savings, Can’t Agree on Buying or Renting – Suze Orman Says ‘Listen to Your Wife’ originally appeared on Benzinga.com
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