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Shared housing can provide financial security for retirees

When Rika Mead retired, and divorced, two years ago, the idea of taking on a roommate wasn't high on her list of priorities.

Her Denver-area home isn't a duplex, and she admittedly was a bit rigid about keeping her belongings a certain way.

"I liked things the way I liked them," she said. "I didn't want to share my home with anyone." She briefly looked at homes for sale in a lower price range but said they were dark, very small or in neighborhoods where safety was a concern.

Her current home is large — 3,700 square feet over three floors — so a friend thought of Mead last summer when trying to help a couple of 21-year-olds find housing for the summer. Because it was a short-term situation, Mead agreed to rent out two extra bedrooms.

"We had a blast. It was so much fun, I decided to get over myself and start thinking about my space in a new way," Mead, 68, said.

Housing wealth accounts for a big chunk of retirees' net worth, but tapping that wealth can be fraught with as much emotional baggage as financial — one reason some financial advisers shy away from pushing the issue with clients.

"Most of the time, the money aspect of it is just a rationale that they use to justify what they're doing," Dan Moisand, a financial adviser, said. Other times, he added, downsizing isn't the windfall many retirees expect, particularly in markets where home price gains are modest.

Through a fledgling online introduction service targeted to women, roommates4boomers.com, Mead began corresponding in January with Deborah Halverson, 57, a nurse who recently relocated to Denver to be near family. The pair hit it off, and in June, Halverson moved in after completing an apartment lease. For now, at least, industry entrepreneurs say demand for elder shared housing is largely among single women.

The arrangement cut Halverson's housing costs by a little more than half, and it covers about half of Mead's monthly mortgage payment.

Rooms for rent typically generate about half the going rate of a one-bedroom apartment, said Bonnie Moore, founder of a competing website, goldengirlsnetwork.com. (Moore and Karen Venable, founder of roommates4boomers.com, strongly recommend clients check the backgrounds of any potential candidates before sharing personal information. They and several home sharers we spoke with also suggested detailed meetings about how expenses, such as cleaning services, food and alcohol, will be shared.)

Other retirees are leveraging the home-sharing concept in different ways.

Some retirees are offering reduced rents in exchange for tenant-provided handyman or other services.

Financial adviser Sheryl Garrett, founder of the Garrett Planning Network, remembers talking with a 62-year-old client about potentially downsizing her home and renting a smaller apartment.

"When we finally got to the bottom of it, we realized she wouldn't be saving much if she moved out and paid rent," Garrett said. "What she really needed was a live-in handyman, so she made a few upgrades in her basement and found a tenant who could pay a little rent and take over shoveling the walks, mowing the lawn and other jobs."

To find him, Garrett advised her client to contact her county aging department. Many of these departments screen potential candidates, but it is still important to check out anyone you are considering thoroughly. Another good source is the National Shared Housing Resource Center (nationalsharedhousing.org).

Bringing on the tenant bought her client time to stay where she really wanted to live, and it preserved her ability to pick up more home equity over time — an important asset in case she needed to sell in the future to pay for a nursing facility, Garrett said.

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