I am a 74-year-old widower in a five-bedroom house who only make monthly payments and have no retirement savings. Should I sell or rent my home?

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I am a 74-year-old widower wandering around the five-room house that was home to my late wife and our two now-grown children since 1995. Just three years after our mortgage, my wife was diagnosed with terminal breast cancer. . She struggled for 12 years with a debilitating illness, during which she was forced to retire. Taking care of her, I was summarily fired from my job. There was a lawsuit for which I received a small settlement that went towards medical and living expenses.

Fortunately, we had solid health insurance that helped my wife get through her last years of endless surgeries, chemotherapy, and procedures. However, our retirement funds were taken advantage of and more or less decimated. She passed away in 2010. The bottom line for me as a surviving spouse is this: I still own our home with a monthly payment of $ 1,650. I have three sources of income: my wife’s beneficiary pension of $ 2,350 per month, my own pension of $ 850 per month, and Social Security of $ 1,550 per month. With cuts in my living expenses, I can balance income and exit pretty well, but without any retirement savings to lean on. The outlook is not entirely bleak. I am still fortunate to have Lifetime Certified Retiree Health Care for me. My house recovered from the housing collapse and there is perhaps $ 200,000 in principal over the mortgage balance. I can’t refinance to access that principal without doubling (or more) my current mortgage payment. To sum it up, I am “in” month to month with my covered health care in perpetuity. Should I move out and rent the house, living in a rental house or apartment? In today’s rental market, real estate agents have assured me that I could rent my home to others for $ 3,500 to $ 4,000 per month. With local apartment rates in the $ 1,500-1,700 range, I could create a new income stream by renting my home, allowing me to build a strong emergency fund. Possibly even enough to start a small mutual fund for the next few years. Or should I just sell the house? That idea would make me deposit the $ 200,000 of capital. Then you could use some of the funds for a down payment on a smaller residence in a less expensive community. Thanks for your consideration. KT See: I am 64 years old, single, and thinking of retiring after battling cancer. I have 1.6 million dollars. Should I Retire? Dear KT, Thank you very much for writing. It sounds like you have a lot of options, but you will have to ask yourself some important questions first, financial advisers said. Too often, housing expenses are one of the biggest expenses for retirees, and choosing to stay in the same home you’ve lived in for decades rather than downsizing to another location could make or break a budget. But, as with most things related to money, the answer will be especially personal to you. Even beyond finances, we’ll get to that in a moment, ask yourself what do you really want from the next 5, 10, 15 years. You may already have the answer. After 26 years in that house, you may have an emotional bond with it, but do you really want to live in it or keep it to generate additional rental income? Would the back and forth of working with the tenants while still managing the house be worth more than selling it and moving elsewhere? Is there a reason you don’t want to give it up, maybe because of the history of that house? Deciding to rent it could bring you additional income, as you said, but it could also bring you headaches. “I don’t like the idea of ​​a 74-year-old man owning a five-bedroom house,” said Victoria Fillet-Konrad, financial adviser at Roosevelt Wealth Management. “He will be responsible for the repairs and maintenance and if he is unlucky he could get very bad tenants. Then there is the possibility that the house is empty for a period of time. “The vacancy could affect your cash flow and therefore your own comfort. You should also think about unexpected events. Take COVID-19, for example Many tenants were unable to pay their monthly payments during the crisis, which means that homeowners who were still required to pay the mortgage also suffered. Again, think about your own expenses: could your finances handle that kind of abrupt and downward blow? How long? “Renting a home can be a hassle with him on the hook for repairs and maintenance,” said Charles Sachs, planning director at Kaufman Rossin Wealth. Still, if you’re attached to the home and want to rent it out, you could consider offering just one or two rooms through Airbnb or after finding someone through family or friends. This arrangement is not for everyone, as the living situation is usually short-term and with a low cost. mbio in roommates, but it’s another avenue, Sachs said. The other option is to sell the house, as you mentioned. If you did that, you may want to consider a smaller, more manageable home or condo closer to family and friends. There are also retirement communities. Depending on where you bought your new home, you could have a small or no mortgage, as well as little or no maintenance costs. On the other hand, it may be a setting that doesn’t interest you. There was one more option he didn’t mention: a reverse mortgage, which he would have to consider carefully. Not all retirees would benefit from a reverse mortgage, but some financial advisers said it might work for their unique situation. Borrowers must be at least 62 years old to purchase a reverse mortgage, but the amount they can borrow against the home will also depend on the home’s equity and value. Homeowners do not have to pay the reverse mortgage, but there are additional fees and interest accrued on the loans. Still, this type of tool provides guaranteed income (in the form of a series of payments or a lump sum) that older Americans may find useful if they want to stay home. There’s a lot to think about with a reverse mortgage, so don’t take this option lightly. Here’s more on how reverse mortgages work from the US Department of Housing and Urban Development. See also: How Homeowners Can Use Reverse Mortgages for Retirement Income “Where someone lives is a very personal decision,” said Marla Mason, financial advisor for A&I Financial Services. “While finances are important factors in the decision-making process, key non-financial considerations must be included in the decision.” Ask yourself some more critical questions, he said, including: What do you want or need for a home? How convenient is your current location for your daily living requirements and services? What is the condition of the house? Can you do most of the repairs or do you need help? Have you thought about your own care needs in the future? Does your current home meet these needs, or would another location be better? How are your social interactions these days? And would you find more value elsewhere? “When you add the value of increased social contact, convenience and comfort along with reduced demands for personal maintenance to the financial equity provided by the sale, the sale and reduction can substantially exceed the opportunity cost of maintaining the home. Mason said. “The importance of the tangible and intangible aspects of this decision cannot be underestimated.” Questions about your own retirement savings or where to live in retirement? Email us at HelpMeRetire@marketwatch.com