Wes Moss answers an important questions that many homeowners who are retired or nearing retirement face. Should they remodel their homes and will they recoup the cost? In a recent USA Today article, Moss says this issue is “a pretty common conundrum.”
According to a recent Merrill Lynch-Age Wave survey of more than 3,600 respondents, the most common renovations done by retirees are creating a home office, improving the curb appeal of their home and upgrading their kitchen and bathrooms,. Most respondents were over age 50 and 1,668 were already retired.
Moss says, “I would say that for 75% of the couples I meet with, at least one spouse places a high level of importance on updating the home and very often it’s the kitchen because that’s where they spend a lot of time, and the other one says, ‘It’s just the kitchen. What’s the big deal?'”
One thing to be careful about– these renovations can be expensive. For example:
• Major kitchen remodel costs $56,768. The average cost recouped: $38,485 or 67.8%.
• Bathroom remodel, $16,724. Recouped: $11,707, 70%.
• Vinyl siding replacement, $12,013. Recouped: $9,694, 80.7%.29,066. Recouped: $14,155, 48.7%.
• Roofing replacement, $19,528. Recouped: $13,975, 71.6%.
• Vinyl window replacement, $11,198. Recouped: 8,163, 72.9%.
Cost have to be weighed into your financial plan. Moss advises his clients to do any home remodeling a year or two before they retire. Home renovations “hurt your pocketbook, and it’s psychologically pretty challenging because it’s money going out the door. It’s hard even when you’re working, and it’s even worse when you’re retired and not working.”
He recommends that people think about how long they plan to live in the home. If they think they’ll be there for three to five years, it may not be worth it to them to renovate, but if they think they are going to live there for five years or longer and they can afford to do the updating or remodeling, then it “may be money really well spent” because they’ll get both the use and enjoyment out of the improvements.
And if it’s something you really want to do but don’t feel like you can afford it, then consider working a little longer before retiring or getting a part-time job in retirement to pay for it, Moss says.
Read the full article in USA Today.