Should older couples buy or rent? Both can work well

We recently received a couple of questions dealing with couples who are in their 60s, 70s and 80s who are planning to move and wonder whether they should buy or rent their next home.

One of our correspondents wrote: “You gave advice to a 63and 64-year-old couple who were contemplating buying a house, but there wasn’t any mention of the future. They aren’t old, but if the wife is left alone, will she receive any part of his pension? Social Security? It would seem they need to consider future sources of retirement income after one of them dies.”

The next question went as follows: “My husband is 85 years old, and I am turning 80 next month. Our primary reason to move from our house to the Philadelphia area is that our adult children live there with their spouses and children, as well as our grandchildren. We are concerned about the real estate market stability in Philadelphia and its suburbs. We want your opinion as to whether, at our age, it is better to rent or buy an apartment.”

We put these two questions together to talk a bit about what people should think about when they are moving or looking for new homes but may be approaching retirement or are well into retirement years, even if they still work.

There is no magic formula. The decision is a very personal one. Here are some issues to think through carefully:

Do you have the money? Determine whether you have the financial resources to sell and buy a home. You also need to make sure you have the financial resources to cover expenses including repair costs and the costs of the move.

Once you determine you have the resources and you’re comfortable that you will continue to have the income and financial stability, you should find the right home that will suit your needs, lifestyle and pocketbook as you age. You can also figure out any tax benefits that you might receive as a homeowner vs. a renter and factor that into the decision.

Factor in your health. Homes require physical work, and houses require more than condos. You need to determine whether you are healthy enough to carry the responsibilities of owning a home. Whether a home is a single family or condominium, if you’re responsible for replacing water heaters, dishwashers, and all other items, you need to make sure you’re up to it.

If you are married, in a partnership or live with someone, the decision-making has to be joint, taking into account all of these issues for both of you. You may never be too old to buy a home, but there may be many instances when renting may be a better decision than owning.