Take Advantage of Your Home’s Equity When You Retire

For many Americans, their home is their biggest financial asset. So, how can you take advantage of your home’s equity when you retire?

Take advantage of your home’s equity when you retire.

Take advantage of your home’s equity when you retire

As a homeowner, you have several options for your living arrangements when you retire:

  1. Stay where you are.
  2. Stay where you are and take a reverse mortgage or a home equity loan.
  3. Sell your home and buy a new one — probably downsizing when you do.
  4. Sell your home and rent.

There may be a substantial financial advantage to selling your home; you’re able to take the full value of the sale — up to $500,000 — free of Federal tax. That can be a huge boon to retirees, although it may require a major change in lifestyle.

Assuming you decide to sell, your options are buy or rent. Buying — even if it’s a much smaller home — ties up a lot of your money in real estate. Renting means you’re not building any equity. Here are some reasons you may want to consider renting:

  1. You need flexibility
  2. You may a hard time selling your home if you need to
  3. You can’t qualify for a mortgage
  4. You don’t have time — or energy — for upkeep
  5. You want to try out a new area
  6. You’re an empty nester

As with all the other decisions you’ll make about retirement, where to live and what kind of lifestyle you want, should be carefully evaluated. And, whatever you choose, there are ways to take advantage of your home’s equity when you retire.

Click here to read more about reasons you might want to rent when you retire.

 

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