Q: My husband and I have rented a house for many years and our landlord just died. He always said he wanted us to have the house for a good price, but there was nothing in the will. We would like to purchase it, and the heirs have said they will give us a first right of refusal. However, we’re not sure we have enough money, so we’ve been looking at other rentals and now realize we’ve been getting a great deal for many years! How do we figure out whether buying or renting is a better option? We are in our early 60s.

A: Let’s assume for a moment that the house’s inheritors offer you a sales price that you can afford. (Unless the landlord’s wishes were expressed in his will, there is no way to enforce them.) Which option would be preferable for your current circumstances?

Home ownership entails much more than the down payment and monthly mortgage: you will have maintenance and landscaping costs, property taxes, insurance, and possibly other fees such as homeowners association, road fund, and so forth. Are these costs and responsibilities you want to take on right now? Many seniors are happy to relinquish “the joys of home ownership” in favor of calling someone else to fix the leaky roof, repaint the house, or weed the garden. Unless you are adamant about taking this on, I would count your blessings that you had below-market rent for so long, and be prepared to pay more or downsize your rental.

If you are determined to try to buy, then you need to prepare a budget including those costs I mentioned above. You can find some estimating help from this Wall Street Journal article (http://www.myspendingplan.com/articles/viewarticle.aspx?id=10). If this looks feasible, visit a mortgage broker in your area to find out what size of a loan you can qualify for. Your banker will likely want to use your projected retirement income rather than your current income, so be prepared with that information as well. After all that figuring you should have a good idea whether you can make your long-time rental your very own space.

Q: My wife and I, both age 64, are interested in getting the most out of our Social Security options. I retired a few years ago and my wife, the main breadwinner, intends to retire at age 70. I’ve called our local Social Security office a couple of times and even been there once, but I always get different answers. They seem to know how to assign the best benefit now, but not what’s best in the long run.

A: You’re right that the Social Security office is geared towards the best current benefit. To maximize your Social Security over your lifetimes, you’ll need to determine a plan and then make an appointment to meet with a higher level employee who can implement the more intricate plans.

The best scenario for you depends on the circumstances, so I will make a few assumptions and answer accordingly.

I will assume both of you always worked at jobs that paid into Social Security, so your Social Security statement is likely accurate. If either of you ever was employed by the government, you may be subject to WEP (Windfall Elimination Provision) or GPO (Government Pension Offset).

I will also assume your benefit is less than, but not much less than, your wife’s benefit.

Given those assumptions, the most economically optimal choice for you may be:

• You claims benefits at your Full Retirement Age (FRA) of 66 and your wife claims her (half) spousal benefit until she reaches age 70.
• Upon her retirement at age 70, you “switch”:

• She disclaims her spousal benefits and instead claims her own higher benefit, augmented by 8% per year for waiting.
• You disclaim you own benefit and instead claim your spousal benefit. This will be half of her FRA amount, not half of her augmented amount.
• No matter who dies first, the survivor would receive the higher benefit (your wife’s).

Before implementing this plan, you would want to check whether you might want to just claim your spousal benefit beginning at her FRA, and stick with that. If your benefit plus your wife’s spousal benefit is less than your spousal benefit, you’re better off depending solely on her benefits.

Finally, this analysis assumes that you are spending the proceeds for living expenses. If you don’t need the money and will be investing it to pass into your estate, then a different calculation would be needed, including assumptions about your expected rate of return. At this point, you may want to see a fee-only financial advisor!

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