Buying a home while receiving Social Security benefits requires careful financial planning to ensure eligibility, tax efficiency, and long-term stability. Key strategies include maximizing benefits through full retirement age, exploring reverse mortgages for equity conversion, and leveraging tax deductions for mortgage interest and property taxes. Additionally, homeowners must consider potential reductions in benefits if income exceeds thresholds or if they claim early.

Social Security benefits are calculated based on earnings history and the number of years worked, with full retirement age (FRA) ranging from 66 to 67 for current retirees. Claiming before FRA reduces monthly payments, while waiting beyond FRA increases them. For example, a person born in 1960 can claim at 62, 66, or 67, with monthly benefits ranging from $839 to $1,360 in 2023 (Social Security Administration, 2023). Homeownership impacts benefit calculations if combined with other income. For instance, up to 85% of Social Security benefits may be subject to taxation if total income exceeds $25,000 for single filers or $32,500 for joint filers (Internal Revenue Service, 2023).

Reverse mortgages, which allow homeowners to convert home equity into cash, are a popular tool for supplementing benefits. However, these products carry risks, including loan balances exceeding home value and loss of ownership. In 2022, reverse mortgage originations reached $14.6 billion, a 15% increase from 2021 (National Reverse Mortgage Lenders Association, 2023). Homeowners should also prioritize mortgage affordability to avoid overextending cash flow. The 28/36 rule suggests mortgage payments (including taxes and insurance) should not exceed 28% of gross income, with total debt below 36% (Federal Housing Finance Agency, 2023).

Homeownership offers tax advantages, such as deducting mortgage interest and property taxes, which can offset Social Security taxes. However, high-income homeowners may face phase-outs. For example, in 2023, single filers with adjusted gross income (AGI) over $750,000 lose the deduction entirely (IRS, 2023). Additionally, homeowners must budget for maintenance costs, which average $9,000 annually for properties worth $300,000 to $500,000 (HomeAdvisor, 2023).

In summary, aligning homeownership with Social Security benefits demands balancing income, taxes, and debt management. Proactive planning with financial advisors and understanding eligibility criteria is essential to avoid penalties and ensure sustainable retirement outcomes.