A Dangerous Thing at That Age

Suzanne and her husband are considering moving into a retirement community, but they will need a mortgage in order to do so. Dave encourages Suzanne to search for other options that don't include debt.

QUESTION: Suzanne in Connecticut and her husband are considering moving into a retirement community, but they will need a mortgage in order to do so. Financially, they can afford it and have secure income. They’re 65 years old with $15,000 in savings. They receive about $100,000 a year in retirement funds. Dave encourages Suzanne to search for other options that don’t include debt.

ANSWER: I think your husband has some money saved that you don’t realize is there. If so, I would use some of that saved money to pay cash for that house. I don’t want you to go into debt at age 65. I would not do a home mortgage.

I would trade houses and get a different house that’s the same price range with no problems—that is not in that particular retirement community that you’re looking at—or I would use some of the savings in your nest egg, which I think he has. If he only has disability and retirement income and he dies, what’s going to happen to you? You’re not going to have $10,000 a month coming in. I can’t bear to have a mortgage at that age. I would have to do it some other way if I were in your shoes.