One of the most significant and often underestimated decisions in retirement is where you choose to live. While it’s commonly framed as a lifestyle choice, the reality is that this decision carries long-term financial consequences that can shape the sustainability of your retirement plan.
For many, the idea of aging in place is deeply appealing. There’s comfort in familiarity – the home you know, the neighborhood you’re connected to, and the routines you’ve built over decades. Emotional ties to a home are powerful, and for good reason.
But retirement introduces a new lens: your home is no longer just a place to live. It’s also one of your largest financial assets.
Let’s start with the cost side of staying put.
Even if your mortgage is fully paid off, that doesn’t mean your housing costs disappear. In Illinois, property taxes alone can range from $6,000 to $10,000 annually depending on location. On top of that, ongoing maintenance costs typically average 1–3% of a home’s value each year. For a $400,000 home, that’s an additional $4,000 to $12,000 annually just to maintain the property.
These aren’t one-time expenses. They’re recurring, and they often increase over time.
Then there’s the question of adaptability. Most homes aren’t designed for aging. As mobility changes, modifications may become necessary – things like stair lifts, walk-in showers, widened doorways, or first-floor living conversions. These updates can range from $10,000 to $30,000 or more, depending on the scope of the work.
Individually, these costs may seem manageable. But over a 20–30 year retirement, they can add up in ways that quietly strain a financial plan.
Now let’s consider the alternative: downsizing or relocating. Selling your home and moving into a less expensive property could free up equity. It wouldn’t just be a number on paper. It can be capital that can be repositioned to support your retirement.
Downsizing can also reduce ongoing expenses, such as lower property taxes, reduced maintenance, and potentially lower utility costs depending on the home. However, starting fresh isn’t without trade-offs.
The transaction itself comes with costs. Realtor commissions, closing costs, and moving expenses can easily total tens of thousands of dollars. If you’re relocating to a different state or city, you may also face a higher cost of living, which can offset some of the financial benefits.
There are also non-financial considerations that carry financial consequences.
Healthcare access is one of the most important. Living closer to major medical centers, specialists, or high-quality healthcare systems can reduce both logistical stress and long-term costs. As healthcare needs increase with age, proximity and access become increasingly valuable.
Social connections matter as well. Moving away from an established network can create emotional challenges and it can also lead to increased spending if you’re traveling frequently to maintain those relationships or seeking new ways to stay engaged.
What becomes clear is that this decision isn’t simply about staying or moving. It’s about aligning your living situation with both your financial reality and your long-term needs. The mistake many people make is treating this as a one-time, permanent decision.
In reality, the best approach is to evaluate multiple scenarios. What does staying look like financially over 10, 20, or 30 years? How does downsizing impact your income, expenses, and investment strategy? What happens if healthcare needs change sooner than expected?
These are not questions with one “right” answer. They are questions that deserve thoughtful analysis and should be revisited over time. What feels right at 62 may look very different at 72 or 82. Flexibility, not permanence, is often the key to making a decision that holds up over the long term.
Retirement isn’t just about having enough. It’s about making choices that allow your resources to support the life you want to live.
A Call to Action for Those Approaching Retirement
If you are nearing retirement, one of the most valuable steps you can take right now isn’t choosing where to live. It’s understanding how that decision fits into your overall financial plan.
At Purposeful Wealth Advisors® we help individuals and couples evaluate major retirement decisions like housing by modeling real scenarios, uncovering potential hidden costs, and showing how each option may impact long-term income, taxes, and portfolio sustainability.
Whether you’re considering staying in your current home, downsizing, or relocating entirely, the goal isn’t to guess. The goal is to make a decision with clarity and confidence.
This is your opportunity to see how your choices today shape your financial future—before those decisions become difficult or irreversible.
Schedule a pre-retirement planning conversation to learn how you may be able to align your home, your finances, and your retirement lifestyle.
The retirement you’re working toward deserves decisions that are not just emotional—but financially sound.
Purposeful Wealth Advisors® is a trade name of Keating Financial Advisory Services, Inc. (KFAS), a Registered Investment Advisor. Investment advisory services are offered through KFAS pursuant to a written agreement. This material is for informational purposes only and should not be construed as personalized investment, tax, or legal advice. Individual circumstances vary, and no guarantee of outcomes is provided.
