Retirement – Rent or Buy?

Upon retirement I’ll be receiving approximately 70k per year (401k, pension plan, social security), before taxes. I’ll have about 65k in a savings account as well. I’m currently paying 1k a month rent. I’d love to move to Florida and either rent or buy a small house. My research has shown that I would need about 1200 a month to rent so I’m wondering if it would be wiser to buy a house (100k) and take 20k out of my savings as a down payment. FYI – I have no credit card debt and I’m healthy.

Terry Says:  I always see the advantages of buying over renting — especially since this will be your primary home,  you will likely get a homestead exemption on the real estate taxes and although your pension and social security are not taxable in Illinois,  there might be some tax advantages.  BUT, here are two things to consider.  A house could involve more costs — and you have little in extra savings if the roof leaks or you need a new air conditioner.  And second, what if you don’t like Florida — or the particular community you choose?  Maybe you should rent for the season (very cheap if you go in the off-season, and also very hot!).  Then you could figure out what area you want to live in before you make that commitment.  Whatever you do, leave yourself with some cash in savings.  But don’t hesitate to make the move, now while you can enjoy it.