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How to Decide if Selling Your Home When You Retire is a Good Idea

by Nick Marr on Oct 8, 2021

The closer you get to retirement age the more people start to think about how to survive in retirement. Although everyone knows that you should save for retirement from the moment you start working, the reality is that this is rarely possible.

The simple truth is that less than half of Australians are confident that they will have enough funds to retire. Naturally, for anyone that owns their home one of the easiest ways to increase your pension pot and retirement funds is to sell your house when you retire.

But, is this a good idea to consider retirement?

Your Financial position

The first thing you need to consider is your financial position. That means taking stock of the bills and loans you pay every month and how much income you need to cover these. If the bills are going to absorb the majority of the income you have then selling and downsizing can be an attractive option.

Valuation

Of course, before you can decide whether you will be better off downsizing or even selling and renting, you’re going to need to know what your current home is worth and how much smaller properties are. You can ask real estate agents but you’ll find that chatting to your local real estate auctioneer can be surprisingly beneficial.

Size Of Property

The larger your property the more likely it is a good idea to sell for retirement. Put simply, you won’t need all the space and may not even be able to access all of it in the future. Selling now allows you to find a property more suited to your needs and save yourself some money. This can make your retirement funds go further and offer you a better lifestyle.

Location & Community Support

A key factor that every person approaching retirement should think about is where their current property is located and what support the community offer. If you live in a place that offers a level walk to the shops and you are well-known in the community, you may not feel inclined to move. After all, you already have the facilities and assistance you need.

Equally, if your property offers neither of these it is probably better to sell.

Your Home Is An Asset

You may have deep sentimental attachments to your home or be eager to pass it on to your children. These are both good reasons to stay in your home, providing you have enough money coming in to pay the bills, enjoy life, and do any modifications necessary to your home.

The Bottom Line

The key to deciding whether to sell or not is whether you have enough money in retirement to stay where you are. If not, you need to find out the value of your property and decide whether to downsize or simply rent.  This decision should be largely driven by the quality of life you would be able to experience, the higher the quality the better.

In many cases, the sensible option is to sell and see your retirement as a new adventure.

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