Own Your Home? Here's How It Could Factor Into Retirement Plans

At Laffey Real Estate, our real estate agents have helped thousands of clients make the right real estate moves to support their retirement lifestyle. For many, that means downsizing to a smaller, more manageable home.

But if you already own your home, deciding what to do next is a little bit more complicated.

For decades, people have used their homes as a durable vessel to create financial value. About 75% of the average America's wealth is stored as equity value in the home. Selling a home may empower you with a substantial infusion of cash, but it is not the right move for everybody.

Current homeowners can generate income with their home or even access equity without selling. So, how do you know whether you should sell or stay? Keep these factors in mind as you plan your decision.

1. Relocating Can Help You Fund Your Retirement
   First and foremost, deciding to sell can help you fund your retirement. With the proceeds of your sale, you can avoid using funds that are generating returns in your retirement or investment accounts. The trade-off: You go back to paying rent, which represents thousands of dollars in expenses (and associated taxes) you could skip.
   
   
2. The Grass Isn't Always Greener After the Sale
   At your current home, you probably have a pretty good handle on your monthly expenses. Although you are responsible for home maintenance, you may go many months with just familiar costs like utilities and food. A new home means more volatility in these costs, especially because rent can rise dramatically each year.
   
   
3. Selling Isn't Your Only Option for Accessing Equity
   If you need to fund a sudden medical expense, your home's equity can be a great asset. But selling may take months, and your timeline is likely to be tighter. A reverse mortgage allows some older homeowners to use their equity value without going through the selling process. No payments are due while you live in the home.
   
   
4. You May Be Able to Use Your Home for Revenue
   You might decide to relocate for amenities or to be close to family while still keeping your home. If so, you are in good company. Older homeowners often use property management companies or real estate agents to help them maintain a home for rent – or even as a vacation rental on today's popular online platforms.
   
   
5. All in All, Home Ownership is Best for Taxes
   When most people think of owning a home, property taxes spring to mind. However, homes appreciate in value while tax assessments are often frozen in time. Likewise, tax incentives for homeowners are always popping up, often at the state and municipal levels. Compare that to rent: A big nothing you pay full taxes on.
   
   
6. Home Ownership Helps You Control Your Costs
   Not having to worry about home repairs may be a weight off your mind, but there's a flip side. As an owner, you can tackle costs head on and make changes that improve them. For example, a new smart thermostat might save hundreds a year. Most landlords will shrug their shoulders at the idea.
   
   
7. Consider the Value of a Home's Legacy
   There are emotional and family dimensions to selling, too. These can be powerful dynamics, especially as the selling process rolls on. If there are strong arguments on both sides, it's a wise idea to consider the long-term effects of staying. If you "had it your way," would you prefer to pass your home on to others?

Expert advice is just a call or click away with Laffey Real Estate. Contact us to find out more.