Retirement is quickly approaching, and with it, a number of queries on how to adjust to your new way of life. Your living situation and what to do with your home are two of the most frequent queries that soon-to-be retirees have.
Untapped equity, ongoing maintenance needs, staircases, sentimental items, and painfully apparent empty areas are probably all present in your home. It’s time to downsize, but how should you go about it? You could be thinking: When I retire, should I sell my house and rent instead?
Selling your home to rent when you retire is undoubtedly a significant life change that comes with both inherent hazards to your financial future and potential benefits. Keep reading for a number of questions you can ask yourself to decide if now is the time to sell. If you decide it is, contact Berkshire Hathaway HomeServices at (310) 373-0021 for assistance.
Do I require a large infusion of cash?
More of the wealth of most Americans who are approaching retirement is based on house equity than any other asset. To meet any of the following common financial needs that retirees frequently experience, you might need to convert a portion of this equity into cash: rising medical costs and Medicare premiums, taxes owed for tax-deferred retirement savings accounts, budget for food increased to account for dietary changes, traveling and entertainment, and supporting the family and preparing a legacy.
Are my home costs rising too much each month?
Even if your mortgage is paid off in full, you can still anticipate rising housing costs due to rising costs for house maintenance as well as ongoing increases in insurance and property taxes.
A recent survey by Cinch Home Services found that nearly half of American homeowners said their maintenance costs were greater than anticipated. Additionally, according to information provided by Angi (the organization behind the website Angi’s List), the cost of home upkeep nearly doubled from 2019 to 2020. Keeping your house may push your housing costs beyond what you can comfortably afford.
Can I keep up the upkeep on my house?
As you are well aware, owning a home requires a significant amount of maintenance, especially over time. In retirement, maintenance jobs that were simple for you to complete while you were younger could become labor-intensive and time-consuming. Perhaps it’s time to relax in your house and let someone else handle the cost and worry of home maintenance.
Can I offset inflation with my fixed income surplus?
The majority of retirees live on fixed incomes, which can be difficult in a society where living costs are always growing. The Bureau of Labor Statistics reports that overall inflation increased by an enormous 8.5% between March 2021 and March 2022 and is still on the rise. If you want to buy dividend-paying stocks or annuities, you might be able to sell your house. When carefully invested, the dividends can assist in paying for living expenses affected by inflation.
Is my home suitable for my new way of life?
Retirement will significantly alter your way of life in many ways. Considering whether your current home can accept these improvements may be beneficial. Examples of changes in lifestyle include spending a lot more time in your home since you’re not working, increasing difficulty using steep driveways, stairs, etc., acquiring new interests both inside and outside the home, and hosting more family gatherings, book clubs, etc.
If you are interested in selling your current home and buying a home that’s more suited to your current needs, Berkshire Hathaway HomeServices can help. Contact us at (310) 373-0021.