Selling Your Home in Retirement: Is it the Right Choice?
When you reach retirement age, you may have been thinking a lot about your finances. Very few people feel entirely confident that they have adequate retirement funds. You might feel that you have enough for day to day life over the next few decades. But even then, what happens if something doesn’t go according to plan? It can be difficult to plan ahead for illness and extra care needs. Many people consider selling their homes when they retire. By that time, they have likely paid off their mortgage and own the home outright. If you choose to sell your home, it could be used to downsize. You could start renting or move to a neighborhood that suits your future needs.
If you’re unsure about selling your home in retirement, use this guide to decide whether it’s right for you. You should give some serious thought to your options. Think about where you will live if you don’t stay in your current home.
Reasons to Sell
There are several reasons to sell your home in retirement that you might consider. First of all, your current home might now be too big for you. Perhaps you bought it as a home your family could grow in, but now all your children have left home. Although saying goodbye to a family home can be hard, it’s often a better option than staying. If the house is larger than you need, you could be paying more than you can afford. You have to take care of energy, property tax, and other expenses. Another reason to sell is to release the equity within your home. Whether you have already paid off your mortgage or not, selling your home will boost your funds. You can then use that money to buy another home. Or you could rent somewhere new, or even fund care, such as a home carer or nursing home.
One of the reasons you might want to sell your home is because you no longer want to stay in the area. You might still love your property, but perhaps it’s time to say goodbye to the neighborhood. A lot of people want to move closer to their children, or they want to live in a community with other retirees. There’s a danger of being isolated as you get older. You might feel you’re already part of your local community. But perhaps you want to move somewhere you can sure you will have others looking out for you.
Reasons to Reconsider Selling
Selling your home might not be the right choice for you. It’s important to look at it from all angles to make sure you’re making the best decision. For example, if you sell your home to fund your retirement, is it better than staying put? Will having the money from the sale benefit you more than not having to pay rent or buy another home? If you have lived in your current home for years, you might be part of the community. You know your neighbors, and they are kind enough to help you when you need it. Selling to move elsewhere could mean you end up living somewhere a little less friendly. It could be hard to get to know the neighbors, and you might wish you had stayed put. What’s more, you might simply love your current home. It’s your family home, and you don’t want to give it up.
Alternatives to Selling
If you decide not to sell, you have other options that could benefit you in retirement. One thing you could do is release the equity in your home. It’s one way you could keep the property but access the value in it at the same time. If the house is too big for your needs, you might even consider ways to use the parts of the house that are of no use to you. If you feel capable, you could rent out the rooms. It might even be possible to create a separate abode within your home. Another way to fill those rooms is to ask if any family want to live with you. Multi-generational living is becoming more popular. It can mean someone is there for you as you get older.
Buy or Rent?
If you do decide to sell, are you going to buy somewhere new or start renting? There are benefits and drawbacks to both options. If you decide to rent, you might be able to reduce your living costs. You also won’t have to take care of property maintenance, as they will be your landlord’s job. It’s also a more flexible option, which can be useful if you need to move again in the future. However, owning your home offers more security. It allows you to have an asset you can sell if you need extra funds later. You might find you have more choice of places to buy and better access to communities that appeal to you.
Choosing a New Home and Community
Whether you choose to rent or buy after selling your home, the next question is where you’re going to next. You have a number of options that could be suitable for you, depending on your needs. You might simply move to a smaller home in a quiet neighborhood. But you might also consider options such as active adult, 55+ or continuing care communities. If you are anticipating care needs in the future or have some currently, one of these neighborhoods could be an excellent idea. There are several benefits of a continuing care retirement community, for example.
It’s very important to remember that you are getting older. You might remain capable and relatively healthy until the very end. However, it’s difficult to predict if you will have various health complaints. Living in a retirement community can help to ensure that you have access to the facilities and care that you need. However, you need to choose the right type so that it’s suitable for you.
Making a decision about what to do with your home and where to live in retirement can be agonizing. Considering all your options carefully is essential to make the right choice.