Monday, August 19, 2019

4 Ways to Determine if You Should Sell Your Home after Retirement

People typically don’t plan enough for their retirement. They build up a nice chunk of savings, review their 401(k) details and look into Social Security and Medicare. Yet, they fail to sit down and consider how lifestyle changes after retirement impact them physically and financially. 

One of the most significant lifestyle elements that every worker or retiree needs to think about is their home. Your current home might feel like your safe haven at the moment, but it could become a nightmarish money trap after you retire. 

Whether you’ve recently been thinking “Is it time to sell my house?” or not, our guide can help you determine if your current home will still bring you joy during this next phase of your life:

Consult with Doctors

Many people who manage their existing conditions well or have significant health rarely consider their home in relation to aging and healthcare. Speak with all of your doctors about what you can expect to happen physically as you age. 

They can provide you with details about the existing condition and age-related outcomes: for example, most people are more prone to having accidents and experiencing injuries that take longer to heal as they age. 

If your home has stairs, your doctor might advise you to downsize to a one-level structure or outline the estimated costs for installing stair-based and other mobility equipment. Your doctors can also talk to you about potential insurance-related costs

Even as work-related expenses decrease, healthcare-related expenses increase from a combination of inflation, a potentially higher number of accidents and increase susceptibility to infections, natural physical breakdown, political upheaval, and changes made by insurers. 

If you can’t inexpensively adapt your current home to your likely future healthcare and safety needs, then it’s time to sell.

Consider the Long-Term Work

Some people believe that having more time after retirement means that they can focus more on home maintenance. You might become physically unable though to perform the essential work necessary to keep your home functional and looking its best, such as cleaning, landscaping, and repairs. 

You might hire contractors to perform these tasks when you’re no longer able, but long-term, regular contractor-related bills add up. You also need to consider how you interact with your home and the types of extra work that your interaction with it creates: for example, some people allow clutter to take over. 

This habit can worsen as they age, which often leads to them having more accidents and spending more money on medical bills. A large home with a lot of empty spaces, especially if you’re alone or living with only one other person, might also make you feel like you must buy the stuff you don’t need to fill it. A smaller home or apartment can help you to learn to live with less.

Check the Location

If your home isn’t near hospitals and other healthcare facilities, senior care options and family members or close friends, it’s time to consider selling it. Many retirees can’t afford long-distance medical travel and lodging costs, especially retirees who don’t have a lot in savings and rely on fixed incomes and strict budgets. 

You might actually lose money as well from lack of access to senior programs that can reduce living costs and help you to live a better and healthier life. Living close to family members and friends is beneficial in terms of health, well-being, and finances. If you don’t have a local social support system when you’re retired, your health might deteriorate as a result of loneliness or the inability to take yourself to much-needed doctor’s appointments. 

If you must rely on an ambulance during an emergency, for example, you can expect a high bill since Medicare doesn’t fully cover the costs. Medicare might not cover the trip at all if it isn’t deemed related to a severe enough emergency or you could have taken a taxi.

Compare the Financial Benefits

Selling a home offers many financial benefits beyond the ones already mentioned here: You might find that a monthly rental payment is cheaper than your mortgage, maintenance costs, and property taxes. You might also reduce electricity, heating, and cooling costs depending on what’s covered under a lease agreement. 

If you don’t have a lot of money in your savings, the sale of your home might provide you with the nest egg that you need to have a comfortable retirement. If you sell a larger home and buy a smaller one to replace it, you might save money over time by investing in a new home that hasn’t reached the point where everything is falling apart and needs regular repairs. 

You might also find a home in an area that has a lower property and other taxes. Some people even save money on capital gains taxes under certain circumstances.

The decision to sell your home is a difficult one to make. As you can see, there are a lot of factors to consider and no easy answer. Your home might be perfect in regards to your health and maintenance costs, but its location might become less and less ideal as you age. 

On the other hand, you might want to hold onto your home because it has been in your family for generations. If this is the case, you need to consider whether it’s time to pass it on to the next generation before you retire. 

To better understand all of these home-related lifestyle factors, talk to experts who work with retirees, such as a senior living advisor, real estate agents, tax consultants, investment counselors, and estate planners.

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