This fall, flights to Europe are cheaper than in summer. Here is the Palazzo Comunale in Tuscany, Italy.
Alamy Stock Photo
How Smart Retirees Turn a Second Home Into a Financial Asset
Article written by Kathryn Pomroy Kiplinger
Buying a second home in retirement, especially if your savings are ample, can be a strategic financial choice. But it requires meticulous planning.
Buying a second home in retirement can be a great way to generate income. But it’s not without risks and downsides.
Brett Johnson, owner & licensed real estate agent at New Era Home Buyers, has clients who purchased second homes in highly sought-after areas of the country. Within a few years, in addition to gaining equity, the homes were paying for themselves through rentals. He also has clients who cover their mortgage, HOA and management fees with rental income, and still make a little extra on the side.
“The key is to treat it like a business, price it right and know the local regulations,” Johnson said.
The average mortgage rate for a second home, according to recent July 2026 data from Curinos (and reported by Experian), is 7.45%. Rates for second homes typically run 0.25% to 0.50% higher than primary home loans. This can create cash-flow challenges for many buyers and you’ll usually face stricter eligibility requirements, which may include larger down payments, often exceeding the standard 20%.
Additionally, many popular vacation destinations where buying a second home is highly desirable have introduced short-term rental restrictions, limiting options for owners who want to rent their property when they’re not there, according to Agents Gather.
As of early August 2026, U.S. mortgage rates are hovering in the mid-to-high 6% range(currently 6.67%). This marks a slight improvement from higher percentages in 2025, when they were often in the low 7% range. Forecasts from sources such as Fannie Mae and the Mortgage Bankers Association suggest that second-home mortgage rates will likely hover in the mid-6% to low-7% range for the foreseeable future.
If you have ample financial resources and you’re ready to swing for the fences, check out these steps (and the pros and cons) to buying a second home in retirement.
Steps to buying a second home in retirement
(Image credit: Getty Images)
Before deciding to buy a second home, ask yourself how it fits into your retirement plans and whether you have sufficient savings to cover the purchase without jeopardizing your long-term goals.
- Avoid risking retirement funds: Withdrawing from your 401(k) or IRA before age 59-1/2 incurs a 10% penalty, plus taxes. And even after 59-1/2, large withdrawals may push you into a higher tax bracket.
- Vacation home, primary residence, or investment: Decide if the home is for personal use, rental income, or eventually, your primary residence. According to the 2026 National Association of Realtors (NAR) Home Buyers and Sellers Generational Trends Report (pdf), vacation home ownership remains more common among older buyers (60+), with about 6% of all recent primary residence purchasers reporting one or more vacation homes in addition to their main property. This may be driven by greater financial stability, equity from primary homes and life-stage priorities like retirement or family getaways.
- Lifestyle fit: When considering a second home purchase, choose a location that fits your lifestyle. Consider accessibility, such as a single-story home for aging in place, and the home’s proximity to quality healthcare or amenities.
- Explore financing options: If you have substantial savings, paying in cash avoids mortgage interest. Second-home mortgage rates for vacation or personal-use properties are typically about 0.25% to 0.50% higher than those for primary residences due to added lender risk. Right now the average second home mortgage rate is 7.45%. Paying in cash helps preserve cash flow for other expenses.
- Research the market: Second-home demand has cooled since 2020 due to high interest rates, with 23% of listings seeing price cuts as of 2025. However, the market is showing resilience into 2026. It’s best to research local markets for price trends and rental potential if you plan to generate income.
- Consider all costs: Beyond the purchase price, set a budget for ongoing expenses — maintenance, utilities, taxes, and insurance (especially in high-risk areas like hurricane-prone Florida). Underestimating inflation or taxes can strain your finances.
Pros and cons of a second home purchase
The decision to purchase a second home comes with several key considerations, including financial commitments and market risks.
Pros of buying a second home in retirement
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Peace of mind: A second home can provide personal joy, potential rental income, or serve as your future primary residence. Jacob Naig, a real estate investor, licensed agent and contractor with Zillow, says that peace of mind is a preferred reason for buying a second home. “Some of my customers say, ‘I wanted one more house that could feel like a home for us, not the kids, not work, just for us.”
Financial leverage: “With equity built up in a primary residence, many retirees utilize that financial runway to buy a smaller second property outright — frequently in cash, sparing mortgage headaches, Naig adds. “Some use their second home as a soft landing for relocating completely at a later date.
Personal retreat: A second home can provide retirees with a dedicated space for vacations or seasonal escapes, eliminating the need to book accommodations.
Long-term investment: The money you have locked up in a second home can appreciate over time and serve as a valuable asset for your financial portfolio. For example, U.S. home values have historically appreciated at an average rate of about 4% to 5% per year. In the past five years, however, appreciation has been stronger, often in the 6% to 7% range. This is driven by lower mortgage rates, higher demand and limited housing supply, according to NCH Stats. This may indicate stronger growth potential for homes, including second homes.
Tax advantages: Renting out the property for more than 14 days each year may allow tax deductions for expenses such as utilities, maintenance and home improvements. Additionally, establishing a permanent residence in a place with lower state taxes can reduce your overall tax burden in retirement.
Cons of buying a second home in retirement
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Ongoing costs: Andrew Reichek, Real Estate Broker and CEO at Bode Builders, says that although there are obvious benefits to buying a second home, there are clear negatives too, such as ongoing costs after buying. “One of my clients bought a lake house in retirement and realized that keeping up with the maintenance was too much work, particularly living off-site. They ended up contracting a local property management agency, which relieved the pressure but contributed to their total expenses.”
Liquidity risks: Reichek also points out that most retirees maintain a fixed or retirement income, and tying up capital in another property can affect financial mobility, particularly in fluctuating markets or when unexpected medical costs arise.
Opportunity costs: Owning a second home can divert funds from other investment opportunities. For instance, if you invest $500,000 (the cost of your second home) in an S&P 500 index fund at a 7% annual return instead, it could grow to $983,576 in 10 years, or $1,938,838 in 20 years, according to the FHFA House Price Index.
On the other hand, a $500,000 home appreciating at 5% annually would reach $814,447 in 10 years or $1,326,650 in 20 years, making stock market investments more lucrative (yet, often more risky) for retirement security, according to Vanguard.
Tread carefully before buying a second home in retirement
(Image credit: Getty Images)
Naig offers this final word of advice: “Buying a second home can be both a sound investment for retirees or an unexpected headache, depending on how the decision was made and for whom it was made.”
Before deciding to buy a second home in retirement, assess your financial stability, lifestyle goals and risk tolerance to ensure the decision enhances, rather than jeopardizes, your retirement security.
Underspending in Retirement: Why You Should Take That Trip
Article written by Rachel Hartman, U.S. News
Many retirees find that after saving for decades, it’s difficult to draw from their nest egg. Even when their financial plan shows they can comfortably afford to take a trip, carry out a home renovation or travel to spend time with family, there may be reluctance.
“Underspending is a quiet but widespread crisis, and it carries a real irony,” said Ronnie Cox, investment director at Human Interest Advisors in San Francisco in an email. “People spend their whole lives sacrificing to build freedom, then let fear stop them from enjoying it.”
In many cases, retirees can achieve a balance between protecting a nest egg and enjoying the retirement years.
Why Underspending in Retirement Happens
For many retirees, the biggest hurdle is psychological rather than financial.
“Something I’ve observed over the years is that the habits that help people build wealth are usually the same habits that make retirement emotionally challenging,” said Rebekah J. Fero, certified financial planner and founder of Fero Financial in Port Charlotte, Florida, in an email.
Many retirees have spent decades living below their means, making thoughtful financial decisions, and consistently saving for the future. By retirement, those behaviors have become second nature. “Then retirement gets here, and suddenly they’re expected to switch form saving to spending,” Fero said.
This pattern of underspending can happen regardless of nest egg size. “Whether they’ve got $1 million or $20 million in their 401(k), most people are hesitant to spend their own money at first,” said Adam Spiegelman, certified financial planner and founder of Spiegelman Wealth Management in Alamo, California, in an email. “There’s a real psychological shift involved in going from getting a paycheck every couple weeks to relying on savings you spent decades accumulating.”
Finding the Right Balance
While retirees shouldn’t overspend, they also don’t want to become so cautious that they miss out on experiences they’ve been looking forward to enjoying for decades. “A balance comes from having a plan that gives you confidence,” Fero said. She recommends understanding where retirement income will come from, how taxes fit into the picture and how each investment supports your long-term goals.
Having a retirement spending plan can also make it easier to budget for living expenses and experiences. For instance, if travel has always been meaningful to you, consider building an annual vacation fund into your retirement budget. If spending time with family is important, you can account for holiday gatherings or regular reunions.
“On the flip side, overspending is its own real risk, especially somewhere like the Bay Area, where I’ve seen clients with multimillion-dollar properties watch their liquid assets run down,” Spiegelman said. “Selling the primary residence to fund retirement means relocating plus a major tax hit. Either direction, underspending or overspending, comes back to the same fix.” You’ll want to plan, revisit the plan often and build in enough flexibility to adjust as life goes on.
Give Yourself Permission to Spend
In some cases, it can be helpful to talk through your spending plans so that you can develop a healthy financial mindset. “I’ve had clients tell me at review meetings, after years of saving, that they finally upgraded to first class, bought the car or took the whole family on vacation, and I’m genuinely thrilled for them,” Spiegelman said. “Some literally ask me for ‘permission’ to spend their own money.”
Feeling comfortable about spending can become easier when retirees regularly revisit their financial plan. Evaluating investment performance, expected expenses and long-term goals with a financial professional can help you see if spending is within the plan. You can make adjustments as you look ahead and get ready for family events or activities with friends.
“The key is to stop starting with a withdrawal formula and start with the design of the income itself,” Cox said. “You help remove the anxiety by building a predictable income floor.” This can help you see that a certain amount will cover your regular expenses every month.
How to Add a Pet Trust to Your Estate Plan
Written By Adam Frank, Kiplinger
Adding a pet trust to your estate plan can ensure your pets are properly looked after when you’re no longer able to care for them. This is how to go about it.
Many people spend a lot of time thinking about their estate plans and ensuring that family members who depend on them will be cared for after they’re gone.
But even the most carefully crafted estate plans can overlook those most cherished loved ones — the family pets.
It’s important to consider how your pets will be taken care of if you can no longer provide for them. Whether your faithful companions are dogs, cats or even tortoises, here’s what you should know about pet trusts.
What are pet trusts?
A pet trust is a legal arrangement where you can put aside funds and instructions for the care of your pets after your death or incapacity. This ensures that your wishes regarding your pet’s care, such as their diet or medical needs, will be honored after you’re gone.
A pet trust also designates someone to manage the trust’s assets that are specifically dedicated to caring for your pet.
What are the benefits of a pet trust?
Pet trusts can provide peace of mind knowing that your pets will be cared for consistently and in the way you want after you’re gone. These trusts can be tailored to fit your pet’s specific needs, which may not be possible if you’re using general estate planning tools.
Above all, a pet trust is legally enforceable, which can offer extra protection against potential conflicts or mishandling.
Three things to include in your pet trust
1. Appoint a trustee and caregiver. Choose a trustee to manage the trust’s assets and make certain they are used in the way you have outlined. Also decide who you want to care for your pet on a daily basis. These roles come with a lot of responsibility, so select people you can rely on to carry out your wishes.
The trustee and caregiver can be the same person. If not, be conscious of potential conflicts between the two. Being as specific as possible in your trust can help reduce potential disagreements.
2. Outline specific care instructions. Include detailed instructions about how your pet will be cared for and where they will live. Think about your pet’s food preferences and dietary restrictions, medical needs, exercise schedule, veterinary provider and living environment.
Will your (and your pet’s) current home be sold as part of your estate administration? If not, do you want your pet to be cared for there?
In addition to making sure the home itself is taken care of, also consider potential expenses that the caregiver may incur when moving in or living there — and whether they’d be willing to do so.
Don’t forget to specify how long the trust is in effect for, whether that is for your pet’s lifetime or just a certain period.
3. Designate funds for the trust. Outlining how the trust will be funded is important so that your pet’s care is financially covered. The money you allocate should be enough for food costs, veterinary care, grooming and any expenses that may come up over your pet’s lifetime, including funeral arrangements and burial or cremation services.
A financial adviser can help you plan for these costs and incorporate them into your long-term plan.
Also think about how these funds will be managed and whether they will be invested to care for your pet’s needs over time.
How can you set up a pet trust?
Start with consulting an estate planning attorney who is familiar with pet trusts and state laws governing them. Work with your attorney to draft a pet trust that clearly outlines your specific wishes, appoints trustees and caregivers and allocates funds.
Importantly, an estate planning attorney can help ensure your pet trust is legally binding and can withstand any potential arguments.
Review your pet trust periodically and update it as needed to account for the latest laws or regulations or any life changes, like getting a new pet. Make sure to communicate your plans to your chosen trustees and caregivers, and give them copies of the trust document.
Pet owners often consider their pets as family members who deserve the same care and consideration as human loved ones. For many people, setting up a pet trust can bring them peace of mind and security for their furry friends.
Plan Your Fall Vacation Now
Article written by Elaine Gulsac, AARP
Pros offer advice on how to get the best deals and where to go this autumn.
As the season of pool parties and barbecues winds down, the keenest bargain-seeking travelers are thinking about pumpkins and fall foliage, knowing that now is the time to plan autumn vacations.
Travel professionals say the ideal booking window for domestic flights in advance of a spike in fares is 30 to 60 days before departure. International trips stretch those windows.
Fall travel in 2026 is likely to cost more than seasonal norms as the conflict with Iran is driving up oil prices. Airfare booking app Hopper puts the current average for a round-trip domestic ticket at $319, similar to summer fares.
Despite tte higher costs of transportation, travel interest remains high. An AARP survey found that nearly two-thirds of respondents 50-plus plan to travel this year. Wherever you’re bound this fall, here’s what to expect in the season ahead and where to consider going.
Travel is booming, growing more than 4 percent globally last year, which surpassed worldwide economic growth by nearly 50 percent, according to the World Travel & Tourism Council.
Timing is everything
Travel surges, which beget higher prices, tend to mirror school calendars, making back-to-school season a relatively quiet and affordable time for those who can get away.
“Fall is the second-best time of year to travel,” says Hayley Berg, lead economist at Hopper, noting that the cheapest time of year in terms of airfare and hotel prices is January. Despite the high fares expected this fall, “there are fewer crowds, and airports aren’t as busy, so that helps reduce travel disruptions.”
It’s a particularly good time to go to Europe, according to Hopper, which found fall flights were down 22 percent on average, compared with summer airfare. The average was $750 in September and October. Cheaper costs and fewer hassles often come with decent weather in the fall.
Extending summer into fall is a good travel hack, says Tim Hentschel, cofounder and CEO of the online booking site HotelPlanner, noting that fall is “a lot cheaper and less crowded.”
Fall travel inspiration
Foliage trips
Fall’s perennial draw, foliage fever, brings road trips to mind. Or for something less DIY, “a cruise in New England or Canada is a great way to see fall color,” Frenette says.
Cruise lines, including Holland America and Norwegian, station ships in New England and the St. Lawrence River in September and October, offering weeklong departures starting at about $117 a day. To enjoy the fall color for a bit longer, American Cruise Lines offers a 16-day New England Fall Foliage cruise that travels from Portland, Maine, to New York City.
Oktoberfests
You can combine leaf peeping with another seasonal event — Oktoberfest — without leaving the U.S. German-themed beer and harvest festivals are common around the country in September and October. Many popular events take place in communities with strong ties to German immigrants, such as Frankenmuth, Michigan; Leavenworth, Washington; and the seven rural villages known as the Amana Colonies in Iowa.
National parks
Visits to national parks start to drop off from summer highs in September, but to seek seclusion at popular parks such as Acadia in Maine and Zion in Utah, try November.
Wildlife viewing
Fall is also a great time to plan a birding trip, as many species transition from summer to winter habitats via migration hot spots from Cape May, New Jersey, to Monterey Bay, California.
Visitors to Point Pelee National Park in southern Ontario, one of Canada’s smallest national parks, can catch fall migrants, including kittiwakes returning from the Arctic, and take advantage of the favorable exchange rate for Canadian and U.S. dollars. (Currently, $1 equals about 1.39 Canadian dollars.)
For elk in North America, the fall mating season is heralded by bugling, a seasonal phenomenon in which male elk vocalize to attract mates or ward off competitors. Tours and events devoted to bugling can be found in the western parts of the U.S.
In the Rocky Mountains, Estes Park, Colorado, celebrates Elk Fest each fall with viewing and Native American storytelling, while to the southeast, the Wichita Mountains Wildlife Refuge in southwest Oklahoma has tours to see and hear the animals in September and October.
Florida
Florida is the most popular domestic destination for travelers 50-plus, according to AARP’s 2026 Travel Trends survey, and fall is a pleasant time to visit, with its cooler temperatures and fewer crowds. It’s also a great time to catch cultural events, such as the Shine St. Pete Mural Festival, which has produced nearly 200 murals in St. Petersburg, and the Miami Book Fair.
Popular solo fall vacations include trips to Costa Rica.
Alamy Stock Photo
International trips
Though most travel spending is domestic, people trying to make up for time lost during the pandemic — a phenomenon called revenge travel — have driven a surge abroad in recent years. Tour operators say demand remains strong.
“Mediterranean destinations are always popular for us in the fall, as participants prefer to head there when there are fewer crowds and more mild, though still sunny, weather,” says Kelsey Knoedler Perri, director of public relations for Road Scholar, a nonprofit tour company that curates learning adventures for those 50 and older.
In 2024, the company launched trips for solo travelers, offering opportunities to travel in small groups with those who have similar interests. Some of its popular fall destinations overlap with domestic solo trips in New Orleans (six days, from $2,649) and Chicago (six days, $2,649) and abroad in Costa Rica (nine days, from $2,849) and Italy (13 days, from $6,999).
Entertainment & Education
Looking for something to read?
This list consists of the top 7 retirement books of 2025.
Source: Morningstar.com
On the Bright Side
Updated Retirement Insights Disclosure: This document is for informational purposes only. All information is assumed to be correct but the accuracy has not been confirmed and therefore is not guaranteed to be correct. Information is obtained from third party sources that may or may not be verified. The information presented should not be used in making any investment decisions. It is not a recommendation to buy, sell, implement, or change any securities or investment strategy, function, or process. Any financial and/or investment decision should be made only after considerable research, consideration, and involvement with an experienced professional engaged for the specific purpose. All comments and discussion presented are purely based on opinion and assumptions, not fact. These assumptions may or may not be correct based on foreseen and unforeseen events. Past performance is not an indication of future performance. Any financial and/or investment decision may incur losses.
Investment Advisory Services offered through Trek Financial LLC, an investment adviser registered with the Securities Exchange Commission. Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed, and past performance is no guarantee of future results. For specific tax advice on any strategy, consult with a qualified tax professional before implementing any strategy discussed herein.
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