There’s been a surge of homelessness of the elderly in many cities across America. This recent article (click here) shows a 22% rise in the elderly not having a home to live in, catching many Los Angeles officials off guard. “While some homeless people are aging in place, L.A.’s spiraling housing costs increasingly are driving people into homelessness for the first time at advanced ages. A fall, a job loss or a medical crisis pushes them over the edge.”
Brandi Orton, a government relations director for St. Barnabas Senior Services and managing director of the Los Angeles Aging Advocacy Coalition states: “Three to five people a month are falling into homelessness late in life.” This is the statistic for LA but I am certain this is happening all over America at either a faster or slower rate than LA.
That is why, it is imperative, that the number one thing a person should do when preparing for retirement is to secure a guaranteed place to live out the rest of their lives. For me, IMHO, I have always advocated owning your own home, debt free, in retirement. I am totally against renting because you are always at the whim of a landlord. There is NO security in renting. You can be thrown out on the street at any time. And what happens if, God forbid, you can’t make your monthly rent? Or come up with a security deposit, first and last month’s rent for your next rental?
Granted yes, owning your own home means additional expenses such as maintenance, insurance and taxes. That’s an additional cost I’m more than willing to pay because I’m guaranteed that I will always have a roof over my head. If for some reason, I can no longer afford my property taxes or maintenance costs, I can always sell because I have built up equity in my home. I can always downsize. I can also take out a reverse mortgage BUT I do not advise this unless absolutely necessary.
The secret to a successful retirement while owning your own home is to pay off your mortgage and be as totally debt free as possible. Retirement and debt don’t mix. I always advised that a person should buy a house no later than age 35, take out a 30 year mortgage, never, ever borrow out your equity, stay in the home and pay the mortgage off by the time you are 65. Of course there are other ways to do this (like a 15 year mortgage) but the bottom line is this: just do it!
I have a great fear of being homeless in my old age. I have a more recent fear that my property taxes are going to be raised to a point I can no longer afford (my town in in the process of doing property re-evaluations again! the last time was 2010). I have a fear that the day will come when DH and I can no longer keep up nor have the resources to keep up our maintenance schedule. No worries. When the time comes, we can sell and downsize to a newer home. But we will always own our own home. Or have enough financial resources to afford assisted living.
Critics say that many homeless people have done it to themselves by making bad decisions. I agree. Not having a paid off home, borrowing out your equity to redo a frivolous kitchen remodel, having a sex-change operation at the age of 67 (read the article) can be some of the bad decisions people make. Be cautious. Be careful. Think things through. Plan for the ‘what-ifs”. Don’t be so smug thinking bad things can never happen to YOU because they can! And sometimes they will! Make owning a place to always live in a priority as you near retirement. Never take your home for granted and protect your home with your life.
Live well my friend, and prosper. Live well and prosper.