Retirement is an enormous milestone, opening up plenty of free time to pursue your interests and dreams. As you get ready to clock out of work for the last time, you'll also have to consider your living situation.

Some people are content to continue living in their current home as they age. Others want to move to another community, downsize into a smaller property, or even get a more upscale home. If you plan to relocate after retirement, you may have to consider how to buy another home after you've stopped working.

Dan Rafter, writing for the mortgage resource site HSH, says the Equal Credit Opportunity Act bars lenders from turning down a home loan because of the borrower's age. However, you'll also have to consider your financial means and personal health when deciding whether to commit to a new mortgage.

In many ways, considering a mortgage at retirement age is the same as preparing for this commitment at any other age. You'll want to make sure that you can afford the monthly payment and that you'll be comfortable paying this amount for the life of the loan. Your budget should include funds for other costs associated with homeownership, including property taxes, maintenance, and homeowner's insurance.

You'll likely have a diverse set of funds to draw on after retirement. Jane Bryant Quint, writing for the retirement organization AARP, says the homeownership rate among people over the age of 65 is 80 percent for single adults and 90 percent for married couples. Retirees who own a home are also more likely to have built up a good deal of equity through regular payments, allowing them to realize a higher profit when they sell a home.

Though retirees will no longer draw a steady paycheck, they are able to draw on other sources of income. Rafter says these include Social Security payments, retirement accounts, and any income from investment properties.

It might be possible to purchase a new home outright using the profits from the sale of your former residence. Buying with cash will eliminate the need for a monthly payment, though you'll still have to budget for ongoing expenses. You should also be sure that you have enough money in your other funds to get by. Susan B. Garland, writing for the financial site Kiplinger, says you may also want to take out a loan for some of the purchase price so you can invest more of your savings elsewhere.

You should also consider how long you expect to live in the property and whether you consider it another investment. Eric Petroff, writing for the financial site Investopedia, says there are certain risks to buying a home for its investment potential rather than its living qualities. The home's value might drop before you are ready to sell, or you might be forced to sell early if your health needs change.

Garland says a good benchmark is to decide whether you'll be in the house for a decade or more. A comparison of the costs of buying a $230,000 home with a 30-year mortgage or renting a house for $1,250 a month found that the buyer had more assets than the renter after 11 years.

Quint says renting a home allows you to check out a community before moving there, and it also means you won't have to worry about maintenance. It can also be a good option for people who anticipate that they will move every few years. However, you'll also have less ability to manage your own home by making renovations, keeping pets, or other actions.

Rafter says a 30-year mortgage is less feasible for retirees. A person who retires at age 68 and takes out a mortgage with this term will be responsible for a payment each month until they are 98 years old. Going with a shorter term, such as a 15-year mortgage, is more manageable.

When choosing a home, you should anticipate your future needs. Even if you are in good health now, you may need more accessibility a few years down the road. Ideally, the home will features such as a no-step entry and have all essential rooms on a single floor.