After 4 decades, you’re nearly done working for good. You see light at the end of the tunnel. Retirement, a beach, and a fancy alcoholic beverage are seductively calling your name. Are you ready for this? Have you utilized all your assets to ensure that your next chapter is as comfortable and stress-free as possible? Many soon-to-be retirees forget that their home equity is a potential asset that can be used to safeguard their financial stability.
With that in mind, below, you’ll discover 6 options for what to do with your home once you have made your great departure from the workforce.
Sell and Downsize
Are your kids out of the house? Do you have rooms accumulating dust and clutter? You might be feeling that your family home is too big for just the two of you. Selling and downsizing to a smaller home is a fantastic way to create a new income stream and cut down on home and property expenses such as:
- Upkeep
- Cleaning
- Property taxes
- Utilities
If you are a senior in the home buying market, remember that you’re in no rush. Take the time to find a smaller home that makes you happy and fits your budget.
Sell and Move to a Different State
If you live in a state like California or New York, then you’re likely paying a sickening amount in taxes. Also, the average home prices are far higher on the coast than in the middle of the country. There’s a reason why retirees flee high-tax, high-regulation states in droves to retire in places like Florida and Nevada. Two million dollars in Hoover Alabama will go infinitely further than it would in San Francisco.
Moving to a different state might open up luxuries and financial freedoms that would otherwise be impossible in your current location. So, if you have no other income streams, consider selling your home and moving to a more retirement friendly state.
Take Out a Reverse Mortgage
Are you 62 years or older and finished with your mortgage? If so, think about tapping into your home equity by taking out a reverse mortgage. This would let you draw out a line of credit or a lump sum of money while still living in and owning your home. Look into reverse mortgage solutions to see if this would be a wise course of action.
Stay Put and Use the Home Equity for Estate Planning
You’ve probably spent the bulk of your life in your current home. You’ve grown attached to:
- The house itself
- The location
- The neighborhood
- The people
- The memories
Many older homeowners choose to stay in their homes until they die or have to leave for health reasons.
Staying put and using your home as a part of your estate is an especially enticing option for retirees who’ve paid off their mortgage and want to pass their property on to their children. It is a practical and generous way of safeguarding your kid’s financial futures for a time when you are no longer there to be their lifeline.
Rent Your Home
Want to create an additional revenue stream without giving up equity in it? You could rent a room or rent out the house itself. Benefits of this include:
- You retain complete ownership of the home.
- You can rent a smaller home or apartment and enjoy the benefits of the surplus income.
- You can make additional money while filling up empty rooms that aren’t getting used.
This option is excellent for retirees who are still attached to their home and would like to eventually pass it on to their children.
Sell and Rent
Have you thought about selling your home and simply renting a smaller place? This would give you immediate access equity and free up substantial cash flow. You could use this sudden influx to:
- Travel abroad
- Vacation regularly
- Dine out often
- Purchase luxury items
Planning for Your Future
Retirement is both an exciting and nerve-wracking journey. If you have concerns about your financial security, take comfort in the fact that you own your home. Holding such a valuable asset gives you financial security should something bad occur.
