Managing your financial life is not just about money.

Maintaining Property in Retirement

This is the fifth article in the series. In this piece I will answer questions 7 and 8 of 32 very important questions people need to answer before retiring.

  1. If I am living in my retirement home, how much do I have to spend to get it ready for retirement?

If you are going to be living in your existing home forever, then you want it to be just right. That will cost money, and probably more than you are thinking. Updating kitchens and bathrooms come to mind. A first floor bedroom is probably a good idea.  The yard, the driveway, the roof, whatever …. please get this all done before retiring.

Hopefully you can do all of this with money you have saved in advance for these things, or out of your cash flow before retiring. I hope that you don’t have to borrow any money to do this, or take from retirement savings.  When we craft a retirement plan for our clients, we find that the dollars involved can be significant.  Come up with a plan.  Get bids and estimates that you can use in planning, even if you aren’t ready to begin these improvements.  You need to build these costs into your retirement planning.  Not doing so could be a bad thing!

Also think about on-going and future maintenance costs.  At some point in the future you might have to pay someone to cut your lawn, do landscaping or plow the driveway.  Factor these things into your retirement planning.


8. What will I do with my other property?

If that property is a vacation home, is the plan to make it your retirement home and sell your primary residence?  Or, do you plan to own your two existing homes in retirement? Then again, you might want to hang on to one of these homes and replace the other with a smaller and less expensive one to make your retirement numbers work.  Any of these possibilities involve some serious number crunching with good data to arrive at a good decision.  If you are buying or selling a property, get them appraised by a real appraiser or three real estate agents.  Do not guess at their value. You also need a very good handle on what expenses are for each property.  Hopefully you have been tracking expenses for each property.  Don’t forget to factor in any expenses necessary to remodel or update the properties.

If your other property is an income producing business property, do you hang on to it and use the income for your retirement?  The answer to that question depends upon how much income is being produced, the balance of the mortgage left on the property, and what condition the property is in. If you have no mortgage, good renters and a property that is in great shape, the answer is to probably hang onto the property unless you are tired of being a landlord.  Perhaps you have always planned to sell the property, get out of the landlord business and take what is left of the sales proceeds after taxes and invest it for income.  If so, get a good number for its value from an appraiser or three real estate agents, think about the cost of the improvements necessary to get the property in shape for sale, and please check with your accountant as to what is the depreciated value of your property before you sell it.  You don’t want taxes duet be a surprise. Also, do some serious thinking about how much monthly retirement income you can get from the net sales proceeds.  If you are not knowledgeable about investments, get some help.

If the property that you own is a lot of land, then are you building your retirement home on it?  Or are you selling it and investing the proceeds for retirement income or paying off what is left on the mortgage of your primary residence?  If you are building, get some detailed bids on construction and add 25%.  If you are selling, get the property appraised by a professional.

In all of the scenarios above, unless you are really good at math, work with a Certified Financial Planner Practitioner who is a fiduciary to crunch those retirement scenario numbers.  Also, think about whether or not you wish to leave any of your property to your children.  In your retirement scenario, will you use the equity in the property for retirement if necessary … or not.  You might have to make a choice between your retirement lifestyle and your children.

If you have a question for me, I can be reached at  If you missed any of the previous articles in this series, they can be found on my website.

The next article in this series answers the following questions: 9. Do I plan to use equity in my home for retirement? 10. If I needed to use that home equity in retirement, would I?

Michael J. McNamara Ph.D., CFP®


*Any financial advice in this article is intended to be generic in nature. Readers should consult with their own financial advisors before implementing any advice or suggestions above.

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