5 Reasons Retirees Don’t Regret Selling Their Homes in Retirement

If you’re thinking about selling your home when you retire, make sure you’re doing so for the right reasons. It might be that you no longer need or want to maintain such a large home. Or it could be because you need some extra money to supplement your retirement years. Whatever the case, knowing your reasons can help you avoid regretting your decision to sell.

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While some people do regret selling their homes when they retire, many people benefit from doing so. Here are some of the most common reasons why retirees don’t regret selling their homes. Depending on your circumstances, some of these might even apply to you.

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Greater Financial Security

Real estate can be a significant asset. If you own your property outright, selling it could give you a lot more financial security and freedom. It can also supplement your retirement income or savings, which is a major plus if you’re worried about running out of money.

Even if you still have a mortgage, the sale could still put a lot of cash in your pocket — provided you have significant equity in the property.

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“By downsizing via selling your home and buying a smaller one or even moving into a smaller rental unit, you can make a lot of money off of that sale,” said Seamus Nally, CEO of TurboTenant . “That money can be used to supplement your income in retirement or for any other financial needs.”

Before making the sale, run some numbers to make sure the decision makes the most sense financially for you. Keep in mind that you might still be better off selling even if you don’t have a ton of equity. It all depends on whether or not you can lower your housing costs or lighten the financial burden elsewhere.

Less Upkeep

Maintaining a larger home can be stressful — not to mention expensive. According to State Farm, the average rule of thumb is to set aside between 1% and 4% of your home value for home maintenance. If your home is valued at $400,000, this means you should have $4,000 to $16,000 for annual maintenance costs.

That doesn’t mean you’re necessarily spending all that money. It just means you should ideally have it in case you need it.

But if you’re tired of the costs associated with homeownership — or even just the costs that come with your specific home — you might not regret selling and moving to a place with less upkeep or lower costs.

This is all just on the financial side of things. There are other pros to selling related to upkeep.

“As retirees age, they often find themselves having an increasingly difficult time taking care of all of the cleaning, landscaping, and general maintenance needs of their house, so they’ll move into a smaller one that is less physically demanding in that way,” said Nally.

If maintaining your home has become a burden in other ways, selling might be the most strategic — and least stressful — option.

Lower Monthly or Annual Costs

If you still have a high mortgage payment when you retire, selling could free up some monthly cash flow. It could also save you money on all those interest charges. And if you switch to a less expensive home, this decision could help your retirement funds stretch further.

Besides that, retirees who sell because of high property taxes or homeowners insurance often benefit from less financial pressure as they age. Even if you no longer have a mortgage, you’ll still be responsible for property taxes. Depending on where you live and your home value, this could mean spending thousands of dollars a year on taxes alone.

Selling and potentially moving somewhere with lower property taxes — or renting if that makes more sense for you — could be more financially freeing.

Ability To Be Closer to Family

Another reason why many retirees don’t regret selling their home is because they get to move closer to family. By selling, they’re no longer location-dependent and can spend their golden years with loved ones.

But to truly avoid regrets, it’s important to weigh the decision carefully and do some research.

“Those who are successful at selling and moving plan extensively. First, they develop a pros and cons list of moving and staying. They then review their finances, ensuring there is enough money in the budget to make the move. These individuals also conduct test runs. They do this by staying in the area they plan on moving to for an extended period of time,” said Dawn-Marie Joseph, founder of Estate Planning & Preservation .

“Finally, people who make the move have a backup plan in case the move doesn’t work out,” Joseph continued. “They may rent for a period of time before they actually purchase a new home. This way, they can move back to their original location if it doesn’t work out.”

Greater Sense of Agency and Opportunity for Adventure

For retirees who feel stuck where they are or want more adventure in their later years, selling can be the best decision. “Agency of choice is perhaps one of the largest wins, whether rightsizing and buying or renting or moving into independent or transitional communities,” said Nikki Beauchamp, NYRS, an associate broker at Sotheby’s International Realty .

This article originally appeared on GOBankingRates.com : 5 Reasons Retirees Don’t Regret Selling Their Homes in Retirement