If you are retiring from your job, you need to make sure your finances are in order. And for many seniors, this means making a decision about what to do with the home they live in.
While some seniors prefer to stay in their current home, others may want to sell, or may need to, to shore up their financial situation.
Sometimes it can be hard to figure out which group you fit into. But you can get a good indication of whether ditching your property would make more sense by looking at these four signs that suggest it’s best to find a buyer for your home before you leave the working world.
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1. You worry about running out of money in retirement
If you’re afraid you won’t be able to retire, selling your home can sometimes give you a lot more financial security.
Oh, for example, you have a family home that is worth a little more than it owes because it has gone up in value over time or because you have paid off your mortgage – or both. In these circumstances, selling could be one of the best things you do. You can take the proceeds from the sale, use some of the money to buy a smaller, cheaper place on your property for free, and invest the rest to grow your investment account. This could go a long way in solving your money problems.
Not everyone is in such a good position, but selling could also help you become more financially secure, even if no have a lot of fairness. If you can lower your housing costs, even if you don’t walk away with a huge profit, you may still be better off.
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2. You still owe a lot on your mortgage
Ideally, you’ll have your mortgage loan paid off by the time you retire. But if that’s not the case and he still owes a small fortune, he may not want to commit to sending a large chunk of his retirement money to his lender.
In this situation, downsizing to a property with a smaller mortgage balance — and lower monthly payment — could free up cash you’d otherwise spend on interest. This can give you more to spend on other things you need after you leave work and no longer receive paychecks to cover your costs.
3. You have very high property taxes
Some houses have very high property taxes. If yours is one of them, housing can continue to cost you a lot of money even if your mortgage is paid. Property taxes often increase over time, so you’ll face a real risk that your large tax burden will only increase as you age and you may see your savings account balance begin to decline.
Moving to an area where you don’t have to pay as much to the government for the privilege of owning your home could go a long way toward freeing up space in your monthly budget if you’re facing a large tax bill each year.
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4. Worried about maintenance and repairs
Maintenance and repairs can become a financial and physical burden as you age.
If you think you can no longer, or don’t want to, take care of your home, or if you’re afraid that the cost of solving your home problems will be prohibitive, it may be best sell as soon as possible while you are still young enough to manage the move and before you invest a lot of money in repairs that may not increase the value of your property.
If any of these four signs apply to you, it’s worth giving serious thought to selling and moving before you leave your job. Doing so could make all the difference in terms of your financial security as a retiree.
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