Want To Retire To A 55+ Community? Consider These 2 Financial Factors First
Active adult communities that are restricted to those 55 or older can be a great choice for retiring adults. You get a place to live, plus a ready-made community and access to amenities that you would otherwise have to pay extra for. However, making the move to a 55+ community is a big decision that will have a significant impact on your finances, and there are some important things that you should consider when you're choosing the location and community that's right for you. Take a look at some important financial factors to consider when moving to a 55+ community.
Calculate Taxes and Cost of Living
If you're moving to a new state, you need to consider not just the impact the purchase of the home will have on your finances, but also the change to your tax situation and cost of living and how those things will impact your finances.
Some states that are popular with retirees, like Florida, have no state income tax. That could be a financial benefit for you. However, Florida also has property taxes that are higher than the national average and relies heavily on sales tax for state revenue, which could make life there more expensive than you think. Research state income tax rates, property taxes, and even sales tax rates in several states that are attractive to you, and see what kind of impact those factors have on your finances. You may not necessarily end up choosing the state that's cheapest to live in, but at least you'll be able to weigh that information when making your decision.
Research the Community Financials
When you're considering individual 55+ communities, you want to consider not just your finances, but the community finances as well. You probably know that most adult communities require buyers to purchase a membership along with their home, the same way you would buy into an ordinary homeowners' association. Before you make this investment, it's important to know whether the community is in good financial shape.
An adult community that isn't in good financial shape may have to raise membership rates more frequently and by higher amounts, or it could be more likely to hit residents with special assessments for improvements or repairs that the community doesn't have the money for. If you're on a fixed income, frequent increases in membership fees can hurt your wallet. Make sure to review the community's financial records. Check the local county clerks' offices to see if there have been unusual numbers of liens or foreclosures in the community. Review the minutes from recent community board meetings to see if there are red flags for financial problems. This can help you choose a home in a community that has a solid financial foundation.
Ask your real estate agent to help you collect the information you need to make a smart financial decision. Working with a real estate agent who has experience with 55+ communities and understands the needs of retirees can help you find a home that you love, and that is also a financially sound buy.
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