My husband and I are in our mid 50’s and both working but plan to retire in our mid 60’s. We own a home that we still owe a mortgage on. We have no credit card debt, excellent credit and enough savings for a down payment for another home and can manage another mortgage. We plan on retiring in a 55+ Active Adult Community in the southern states. Would it be in our best interest to purchase the retirement home now while homes are affordable and pay both mortgages until we are ready to sell or just pay down the one we have and start fresh when we do retire?
Terry Says: The thing most people don’t realize is that once they retire they won’t qualify for a new mortgage! That’s why I advise buying that retirement home while you still have an active earnings income. But doing that purchase 10 years in advance of your retirement decision is a bit of a stretch. You don’t know what your financial picture will be at retirement, what your needs will be, and where you really want to be in case you need a certain type of healthcare. If you can purchase the property and rent it out to cover the cost of your mortgage, this might be a good idea. Just be sure to recognize that a lot could change between now and when you retire.