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Money Talks: What if I want to stay in my home as I age?

Part of the “American dream” is owning a home and being mortgage-free when you retire, which is an admirable accomplishment for any family. However, there are many other factors for retired (or first- time) homeowners to consider, such as the “hidden costs” of homeownership. Much of our attention focuses on the mortgage payment of a home so let’s take a closer look at some other costs that will continue through retirement.


Property Taxes

New Jersey has the nation’s highest property taxes, which creates a significant carrying cost to homeowners in this state.1 Additionally, there is a history of this cost increasing as it has increased by 1.6% and 2.3% over the past two years, respectively.1 Estimated annual cost:  ~2.31% of home value.2


Regardless of the age of a home, it will require some type of repairs and improvements at some point because items, such as the oven, dishwasher, refrigerator, bathroom, roof, furnace, etc. will no longer function properly or just become outdated. Estimated annual cost: ~1% of home value.3


Homeowners are responsible for keeping their own property maintained. Examples include yard work (e.g., cutting the grass) and snow removal. Those that live in townhomes or condominiums will have to pay an association fee, which covers these services. Estimated annual cost: ~1% of home value.

Utility Bills

These costs include gas, electric, and water bills. During the winter (heating season) and summer (cooling season), the amounts are at their highest. Estimated annual cost: ~1% of home value.


In many situations, a family’s home is one of their largest assets, so it is prudent to maintain homeowner’s insurance regardless of mortgage status (Lenders generally require insurance in place when approving a loan). Estimated annual cost: ~0.35% of home value.4

The purpose of this article is to not discourage homeownership as it can be an asset (tangibly and intangibly) to any family. However, when deciding about homeownership (or remaining the owner of a home), it is important to understand the financial implications beyond the monthly mortgage payment.


1“New Jersey’s Highest-in-the-U.S. Property Taxes are Rising Again” By Elise Young. February 23, 2018 https://www.bloomberg.com/news/articles/2018-02-23/new-jersey-with-highest-property-taxes-sees-bills- rise-again

2 “N.J. had highest property taxes in nation in 2016 (again), study finds” By Jeff Goldman. April 6, 2017 http://www.nj.com/politics/index.ssf/2017/04/nj_still_has_highest_property_taxes_in_nation_stud.html 

3“The Huge, Hidden Costs of Owning a Home” By Liz Weston. April 25, 2016, https://www.nerdwallet.com/blog/mortgages/the-real-cost-of-your-house/

4“What is the Average Cost for Homeowners Insurance?” By Ashley Henshaw http://homeguides.sfgate.com/average-cost-homeowners-insurance-3020.html