How to Massively Reduce Your Housing Costs Before Retirement

Entering retirement without a mortgage can help you manage costs.

A senior couple packing (or unpacking) boxes inside a house. The woman stands in front, arms crossed and smiling.
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She and her husband made their most recent move from Cincinnati, Ohio, to Hammock Beach, Fla., a planned community seven years ago, and are enjoying their new life.

She advises people to consider transportation, medical care, political and religious aspects, and universal design – which is a set of principles that make your home easy to access no matter what your age, size or abilities – in making a move. In addition, make sure the doctor you plan to see when you relocate will take Medicare if you are already 65 and receiving it.

According to NAR, as of November, the five most affordable metro areas were Toledo, Ohio, with a median single-family price of $87,500; Rockford, Ill., at $88,900; Decatur, Ill., $91,000; Ocala Fla., $103,600; and Topeka, Kan., with a median price of $106,900.

[See: 10 Saving Strategies That Can Backfire.]

Senior living may not appeal to people with an active lifestyle, who are still working or who don't want to live surrounded by only those 55 and older. If you've lost your spouse or prefer a social environment to a single-family home, senior housing can be an option. It can be a retirement community, independent living or, for those with health or mobility issues, assisted living. Fourteen percent of recent buyers past age 50 bought a home in senior-related housing either for themselves or for a friend or relative, the NAR report said.

Aging in Place. Don't want to move? If you're going to age in place, think about universal design, Cullinane says. Will you be able to climb the stairs as you age in your existing house? Can you afford the cost of installing an elevator? Unless you can pay down your mortgage, this option won't decrease your housing costs.

"Whether you decide to move or stay, find ways to make your home easy to access no matter what your age, size or abilities," Cullinane says. Think in terms of a first-floor master bedroom, which may mean moving your bedroom to the lower level of your current home.

Other features that are useful are non-skid flooring, curbless showers, task lighting in work areas and a bar in the shower. More elaborate features include lever or pedal-controlled handles for faucets, a ramp to the doorway if needed, covered carports and boarding spaces as well as well-lit hallways.

As you approach retirement, it's useful to begin thinking about your living expenses, especially the cost of housing as it tends to be the largest expense you'll have. If you're ready for adventure, you may just be a candidate for selling your home and buying in a less expensive market. It'll save you money, and might just inspire the kind of change you desire.