What my paid-off home really costs me in retirement

When we talk about retirement, most of the focus is on investment accounts, Social Security, and how much income you’ll have. But there’s a quieter, less glamorous piece that can make or break your plan: what it actually costs to keep a roof over your head when the mortgage is gone.

Owning your home outright feels amazing. But it’s not the same as living there for free. I want to walk you through what my own home has really cost me in retirement so you can get a clearer picture of what to expect and how to budget for it.

My home and why this matters

My house is about 1,400 square feet. It was built at the end of 2013, and I bought it at the end of 2016, so it was roughly three years old when I moved in. As I’m writing this, the home is approaching 13 years old.

I’ve paid off my mortgage, but I still have four big ongoing categories to plan for:

1) Property taxes
2) Homeowners insurance
3) Utilities (which I’d pay whether I owned or rented)
4) Maintenance, repairs, and upgrades

That last category is the sneaky one. It’s where people often underestimate costs, especially as a home ages. If you’re deciding between renting and owning in retirement, or you’re planning to stay in your current place for the long haul, this is where you really want to pay attention.

Property taxes in retirement

Even with no mortgage, property taxes are a permanent line item in my budget. For my 1,400-square-foot home, here’s what I’ve paid since retiring:

• First year of retirement: $2,800
• Second year of retirement: $2,740

The small drop was likely due to changes in local school district bonds and levies. Where I live in Washington state, I’ll be able to apply to freeze my property taxes once I hit a certain age (61) and stay under a specific income threshold. If I qualify, my property taxes should stay roughly flat going forward, which is a huge relief when you’re on a fixed income.

Every state is different, but if you’re retired or close to it, it’s worth checking whether your state or county offers any property tax exemptions, freezes, or deferrals for older adults or people with lower incomes.

Homeowners insurance costs

Next up is homeowners insurance. Even without a mortgage lender requiring it, I wouldn’t go without it. Here’s what I’ve paid with my current insurer:

• Year 1 of retirement: $777
• Year 2 of retirement: $972
• Year 3 of retirement (upcoming bill): $998

That jump from $777 to $972 was noticeable. The next increase is much smaller, but it’s a good reminder that insurance costs tend to creep up over time, even if you never file a claim.

In retirement planning, it’s easy to assume insurance will be a stable, predictable cost. In reality, premiums can change based on inflation, construction costs, weather risk in your area, and your insurer’s overall claims experience. I assume my homeowners insurance will keep inching up and build that into my long-term budget.

The ongoing maintenance I budget for every year

Maintenance is where owning vs. renting really starts to diverge. If I were renting a house, I’d still pay for utilities and water, but I wouldn’t be responsible for most repairs or upkeep. As an owner, those are all on me.

Here are some of the recurring maintenance costs I’ve had since retiring.

Backflow prevention test

My city requires an annual backflow prevention assembly test. This is a safety inspection to make sure contaminated water can’t flow backward into the public water system.

• Year 1 of retirement: $103
• Year 2 of retirement: $125

It’s not a huge bill, but it’s a reliable one. I treat it like any other annual subscription and plan for it.

Annual HVAC plan

I also pay for an annual plan with a local HVAC company. The plan includes:

• Two tune-ups per year
• 15% off parts and repairs
• No overtime fees
• A 1-year guarantee on any repairs they do

The plan has been $183 per year for several years now. For me, it’s worth it. Part of my HVAC system is in the attic above my garage, and I like having professionals up there regularly to catch little issues before they turn into big, expensive ones.

Repairs they’ve caught so far

Because of those inspections, I’ve had a couple of repairs done:

• Year 1 of retirement: A leaking P-trap in the attic (dripping onto the garage ceiling) – $140
• Year 2 of retirement: A worn contactor (a heavy-duty electrical switch) that was starting to deteriorate – $240

Neither repair was catastrophic, but both could have become bigger problems if ignored. This is the kind of thing renters typically call the landlord about. As an owner, I call the HVAC company and pull out my wallet.

A lesson from my noisy furnace

One winter, my return air vent started making a terrible noise. It sounded like the system was struggling to breathe. I called the HVAC company, and the technician pulled out my furnace filter, which was coated in thick white powder.

He asked, “Have you been running a humidifier with tap water?” I had. That was the problem. Minerals in tap water had turned into fine white dust, which spread around the house and got sucked into the return vent.

All I needed was a new filter. The noise stopped, and they didn’t even charge me for the visit. But it was a good reminder that small, everyday habits can turn into maintenance issues.

Sprinkler system blowouts

Because I live in a place where pipes can freeze, I also pay to have my sprinklers blown out every fall.

• Sprinkler blowout: $45 each year

Again, not a huge cost, but it’s a recurring one. Skipping it could lead to broken pipes and a much bigger bill later.

Repairs and upgrades I’ve done as a homeowner

Over the years, I’ve done a mix of necessary replacements and upgrades. Some of these happened before I retired, but they’re helpful examples of what to expect over a decade or two of homeownership.

In my first eight years in the house, I replaced:

• Garbage disposal
• Kitchen faucet
• Both shower heads
• A cartridge in my shower handle
• All smoke detectors
• Washing machine

Outside, I:

• Built a retaining wall
• Added fence gates
• Replaced several sprinkler heads

None of this is unusual for a home that’s 10+ years old. But if you’re used to renting, it can be a shock how often something needs attention.

Recent projects since retiring

Since retiring, I’ve had a few bigger projects and some smaller fixes.

French drain to manage yard flooding

Because of drainage issues and water from a neighbor’s sprinklers, one side of my yard kept flooding. I decided to install a French drain to move water away from the house.

• French drain project: $300

Could I have tried to get the neighbor to pay? Probably. But I chose to just handle it myself and move on. Sometimes peace of mind is worth more than winning the argument.

Replacing all my flooring

This was my big retirement project. I pulled out all the carpet and replaced it with luxury vinyl plank throughout the house.

• New flooring (DIY install): $5,000

If I’d hired professionals, it would have cost significantly more. Doing the work myself saved a lot of money, but it was still a major expense. The upside is that I absolutely love the result, and it should last for many years.

Small but necessary plumbing fixes

In the last year, I’ve done a few small maintenance items:

• Replaced the fill valves in both toilets: $20
• Replaced a toilet flapper: $10
• Replaced my dryer vent hose while moving appliances for the flooring project: $10

These are the kinds of things many homeowners learn to do themselves over time. They’re not expensive individually, but they’re part of the ongoing reality of owning.

What probably needs replacing in the next 5–20 years

Homes have life cycles. Different parts wear out on different timelines. Looking ahead helps me avoid being surprised by big expenses.

Based on typical replacement timelines for a home my age, here’s what I’m expecting in roughly the next five years:

• Dishwasher (it’s old and not working well): around $600
• Water heater: around $1,000 (I’ll probably have my son help with the install)
• Dryer: around $700
• Exterior house painting: possibly $5,000 or more
• Rain gutters for the front of the house: around $2,000

These are estimates, not quotes, but they give me a ballpark. I don’t treat these as “maybe someday” wishes. I treat them as almost inevitable costs of staying in this home.

The really big-ticket items down the road

If I’m still in this house 20 years from now, I’ll almost certainly need to replace:

• The roof
• The HVAC system

For a small home like mine, rough estimates look like this:

• New roof: $10,000–$14,000
• New HVAC system: $10,000–$15,000

Those are big numbers, and they’re exactly why I keep a larger-than-average cash buffer. I don’t want a failing roof or HVAC system to force me into debt or into selling my home on someone else’s timeline.

If you’re curious how cash fits into the bigger retirement picture, I’ve written more about that in how much cash you should really keep in retirement.

What my home has really cost me so far in retirement

Let’s pull all of this together into actual numbers.

Looking only at the last two years of retirement, and focusing on property taxes, homeowners insurance, and maintenance (not utilities), my home has cost me:

• About $6,850 per year on average
• Which works out to roughly $570 per month

That’s with no mortgage. The longer I stay in this home and the older it gets, the more those numbers are likely to creep up, especially as bigger items start to need replacing.

Building future home costs into my retirement budget

If I add up the estimated costs of things I’m likely to replace over the next 20 years (dishwasher, water heater, dryer, exterior paint, gutters, roof, HVAC, and so on), I get roughly:

• Around $30,000 over 20 years
• Which averages to about $1,500 per year

Then I add in my current property taxes and homeowners insurance, which are about $3,700 per year combined.

So I’m looking at something like:

• $1,500 (future repairs and replacements)
+ $3,700 (taxes and insurance)
= $5,200 per year
≈ $433 per month

But because there’s always something unexpected with a house, I give myself extra room. I personally budget:

• $500 per month for homeownership and maintenance costs going forward

This isn’t a perfect number, but it’s a realistic one. It lets me set aside money every month into a dedicated “home” sinking fund so that when a $2,000 or $8,000 bill shows up, it doesn’t feel like a crisis.

Why I still choose to own in retirement

With all of these costs, why do I still choose to own instead of rent? For me, it’s about stability and control:

• I don’t worry about a landlord selling the property or raising rent sharply.
• I can make the changes I want, like new flooring or yard projects.
• I like knowing that once the big items are replaced, they’ll (hopefully) last many years.

But I’m also very aware that owning isn’t automatically cheaper than renting. It’s just a different mix of costs and trade-offs. If you’re weighing the decision, especially with early retirement in mind, it can be helpful to zoom out and look at the whole picture, not just the mortgage. I talk more about that kind of trade-off thinking in why I stopped maxing my 401(k) to retire earlier.

How to plan for your own home costs in retirement

If you’re trying to figure out what homeownership might cost you in retirement, here’s a simple way to get started:

1) List your known annual costs. Property taxes, homeowners insurance, HOA dues (if any), and any required inspections or fees in your area.

2) Look at your last 3–5 years of home spending. Go through bank and credit card statements and pull out anything related to repairs, maintenance, and upgrades you wouldn’t have paid as a renter.

3) Estimate upcoming big-ticket items. Think roof, HVAC, water heater, major appliances, exterior paint, gutters, and so on. Get rough price ranges and divide by how many years you think you have before they’ll need replacing. That gives you an annual “reserve” number.

4) Turn it into a monthly number. Add your annual taxes, insurance, average maintenance, and your big-ticket reserve, then divide by 12. That’s a realistic monthly cost of owning your home in retirement, even without a mortgage.

5) Build a sinking fund. Set up a dedicated savings bucket just for home costs and move that monthly amount into it. When something breaks (and it will), you’ll already have money waiting for it.

The bottom line

Owning a home in retirement can be wonderful, but it isn’t free just because the mortgage is gone. Between property taxes, insurance, routine maintenance, and the occasional big-ticket replacement, my paid-off home still costs me thousands of dollars a year.

I knew this going in, and I still choose to own. The key is not to be surprised by these costs. If you plan to own your home in retirement, treat housing as an active part of your financial plan, not a box you checked once the mortgage was paid off.

Run your own numbers, be honest about what your house will need over the next 10–20 years, and give yourself enough cushion so that when the roof or water heater finally gives out, your retirement plans don’t have to.