Housing will always be one of the biggest pieces of the financial plan, but we’re getting a lot of questions from retirees about what to do with their home now that they’ve retired. There are four main options that most people choose from so let’s explore those today and discuss the pros and cons of each decision.

The first, and easiest, option is to stay where you are. You have a house you love in a location you enjoy so it makes a lot of sense to continue living there. It’s also likely that you’ve paid of most or all of that mortgage which makes it a great decision financially. That house probably has a lot of emotional attachment with it and that makes it hard to leave.

The primary con for most people thinking about staying in their current home is that it’s too much to take care of. They don’t usually need as much house anymore with no children around and the upkeep becomes more trouble than it’s worth. The key is determining how important staying in that house is for you because the emotional investment often outweighs the financial for people.

If you decide not to stay in your current house, then the chances are you’re thinking about downsizing. That’s the next common decision that people contemplate. There are plenty of good reasons you might want to downsize, but saving money isn’t always the result of choosing this option. Moving is expensive and you might end up paying more money for less house. So that can’t be the primary factor. We tell people they need to think about what they want retirement to look like and if a smaller house or one level or a smaller yard is going to make you happy and comfortable, then maybe it’s the path you want to take.

The third choice for many retirees is whether they want to move into a retirement community. This could be a great choice for people, especially if they won’t have someone to care for them later in life. That can become a significant burden and challenge and you have to consider that possibility. Plus, these places can be very active and provide a wonderful lifestyle. But on the other hand, these communities can come with an astronomical cost. Let’s make sure we understand the fine details so no financial issues arise down the road.

The final option many people consider is whether to become a renter. It might sound counterintuitive to the advice you’ve always gotten about owning a home, but renting can make a lot of sense in retirement. The biggest is that you know exactly what you have to pay each month. You don’t have account for repairs and upkeep, which can become costly. That’s a big pro for a lot of people.

But renting doesn’t have to be forever either. Maybe you want to sell your home and wait for the market to cool down or rates to drop some before you buy another property. That’s also something worth considering.

The bottomline is good planning is takes all of this stuff into account. A good plan should be addressing housing in retirement, and that’s part of the conversation we have when you come in for your complimentary Money Map review.

Here are some of the things we discuss in this episode:

0:55 – What you need to weigh when staying in your current home

3:04 – Should you downsize?

6:31 – Pros and cons of retirement communities

8:23 – Does it make sense to become a renter?