From a financial angle, there are many reasons why retirees or soon to be retirees should consider selling their homes when they enter retirement.
Pay Off The Mortgage & Invest the Equity
Many people can live comfortably in retirement if all of their debts are paid off. However, fewer homeowners are entering retirement debt free.
Strictly considering finances, not emotions, staying in a home you owe money on doesn’t make sense. Not only do you need to pay the mortgage payment every month, but your equity is tied up in an asset that isn’t very liquid. Getting out of the house if the equity is needed would take some doing.
If you sell the house and move into a cheaper home that you can buy outright, you no longer have the monthly mortgage payment, often freeing up $1,000 or more from your monthly budget. In addition, you also can invest the equity in your home into your retirement savings.
Reduce Other Expenses
Those with families often live in larger houses that accommodated the kids, their friends, and all their stuff. Once the kids move out, parents may find themselves in a house that is too big for their needs. By selling the house and moving to a smaller home, they can pay less on many expenses including utilities, property taxes, and maintenance expenses. These expenses alone can add up to $500 or more per month.
Retire Earlier
If you are free of the monthly mortgage as well as maintenance and utility costs, plus you have the equity to invest in your retirement, you may find that you can retire earlier than you thought, often by several years. What could you do with those extra years in retirement? There’s something to be said for retiring while you’re still healthy enough to enjoy your newfound freedom.
Footloose And Fancy Free
While selling your home may initially be terrifying and feel as if you're security is ripped from you, it may also be a blessing. Not owning a home can open you up to all sorts of adventures such as traveling, or living in a new area of the country, or settling into an apartment for retirees where you no long have to worry about yard maintenance and other household chores.
Being emotional about our homes is understandable. After all, our homes are where we raised our families and spent years of our lives. Some of our best memories are there.
Source: Bible Money Matters
Photos credit to the owners