HERE ARE THE BENEFITS OF SELLING YOUR HOME IN RETIREMENT
After years of devoting time and energy to their work, many people welcome retirement as a new chapter in their life, allowing them the time and opportunity to travel, spend more time with family and friends, and devote more time to their passions and hobbies.
Despite not being in the workforce anymore, many people still wish to maintain their current lifestyles. Selling your home is a great way to increase retirement income and ensure you can continue living your life as you please. In fact, home equity for the average American is almost double the value of their retirement savings. Keep reading to learn more about making home sales a part of your retirement planning.
Monetary and financial benefits:
There are several benefits that can come with selling your house in order to increase your retirement funds.
Create more freedom for your monthly spending budget
One of the most common practices when it comes to retirement budgeting is to keep your withdrawal below 4% a year. By selling your home, you can use some of your earnings to increase this 4% number, giving you more flexibility in how you spend your money.
Decrease your property costs
Another way to use your home sale proceeds is to buy a new home with lower monthly costs and less maintenance. Smaller homes tend to have reduced utility costs and property taxes, so the money that would have been covering these costs can be put toward things like traveling and home projects instead.
Go into retirement debt-free
Choosing to purchase a less expensive retirement home means that you can essentially eliminate making large mortgage payments. Dealing with a mortgage debt while in retirement can be a heavy burden, especially if your assets are lower due to a declining market climate. Even if you may not have debt in the form of a mortgage, you can use the money saved from downsizing to pay off any outstanding credit card debt, student loans, etc. Starting this new chapter debt-free is a great start to a happy retirement.
Secure an asset for your family
When preparing for retirement, an essential factor to consider is how your family will be affected once you pass away. By selling your current home and paying cash for a lower-maintenance home property, you’re eliminating the potential burden of making mortgage payments for your loved ones.
Lifestyle considerations:
No matter what your retirement dreams entail, having extra cash can help you reach those dreams faster than anticipated. Depending on your lifestyle needs, moving in retirement can be the perfect opportunity to seek out a more convenient living situation.
For many, priorities shift when it comes to choosing a new home: How close is the nearest hospital? Does the house require consistent repairs or maintenance? Is it worth considering a one-story home to eliminate the use of stairs? These priorities shift to the forefront of your mind when transitioning into retirement.
Start your new life in a new state
For many, moving out of state can mean a new adventure, lower taxes and costs of living, and being closer to family. If you choose to move to a state with lower property taxes, you have the potential to save thousands of dollars per year. For example, a home taxed in Illinois at about 1.7% is taxed at only 0.55% in New Mexico.
If you’re considering a change of pace in a new state, USA Today published an overview in 2019 of some of the best places to retire based on county.
Moving to a retirement community
Joining an age-restricted community can be an excellent option for those who want to live in a place that expands their social circle while also providing the support that they need as they age. Many of these communities include numerous perks and facilities, including swimming pools, exercise classes, group activities, and close vicinity to health care facilities.
Consider renting in retirement
Renting in retirement can take a massive weight of responsibility off of your shoulders. Since leases tend to be relatively low commitment, you are given the freedom to switch locations and homes whenever you want a change. Not only do you gain travel flexibility, but you also no longer need to worry about maintenance. Any issues that may arise, like leaking pipes or a broken air conditioner, are the responsibility of your landlord.
Start planning
Planning for retirement, especially when it includes selling your home, requires careful planning. The earlier you start putting plans together, the more you’ll get from your retirement when it comes time to sell. Selling your home for cash before retirement can be a great place to start when starting this new chapter.
At Midwest Cash Offer, we make guaranteed cash offers for your home. Fill out a Cash Offer Form today to get started on your free home estimate. We offer competitive estimates, and in as little as three days you can have your house sold and get your payment in cash. No hidden fees, no closing costs, just fast cash home offers. Learn more about cash offers for houses here.
