Should You Sell Your House in Retirement?

When you envision your living situation in retirement, what does it look like? Perhaps you’ve always dreamt of downsizing and moving to the beach or a cabin in the woods. Or maybe you’d like to enjoy your home for a bit longer. 

When deciding which option is best for you, you’ll need to consider several factors.

Look Into Maintenance Costs

Ongoing maintenance costs are a significant factor when it comes to deciding to sell your home. It’s not just the financial burden, but the physical toll as well. Maintenance like snow blowing, mowing the lawn, raking leaves, and even cleaning can take a lot of work!

Maybe you purchased a larger home with several bedrooms for children and grandchildren. Not only is it challenging to keep those rooms clean, but you’ll also be paying higher property taxes on a larger home.

Can you afford physically and financially to keep up your house as you age?

Understand the State of the Market

One of the first questions you should ask yourself and your financial advisor is if selling is logical in the current market. Summer of 2021 was a record year for the housing market and, in turn, a great year to sell.

If you did decide to downsize, you need to know if you would be able to pay out of pocket for a home, or if you would overpay. A seller’s market isn’t necessarily a buyer’s market because competition is stiff, and prices are high.

Pick a Location with Your Ideal Lifestyle in Mind

Maybe you’ve always wanted to live on the beach, or perhaps your dream retirement is right where you are. When you’re deciding on where to live, think about what’s most important to you. 

For some, spending time with their family is a top priority, but for others, that European excursion is calling their name. If you only plan to be home half the year and travel often, then downsizing and selling may be right for you.

Reflect on what’s most important to you and make a plan to see that out.

Do the Costs Outweigh the Benefits?

Selling your home in retirement can give you a lot of flexibility. By selling your home, you’ll receive an influx of funds that you can use to live out your retirement dreams. Selling your home can also result in a capital gains tax break, meaning more cash in your savings accounts.

On the other hand, your home may be the place that makes you the happiest and most comfortable. Being surrounded by family and a strong community might be a good reason to stay. Plus, if you’ve already adjusted your home to help you age in place, then it may be a good idea to age in place.

As a fee-only financial planning firm, Wood Smith Advisors can help you create a financial plan to achieve your goals. Ready to learn more? Contact our team today! We’d love to hear from you and help you build a financial and lifestyle plan to see you through a fulfilling retirement.

Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs, and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.

"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.

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