Your home is an investment. Although many people think of it as a way to secure financial independence and dramatically reduce outgoings in retirement, it is also possible to sell your home and release the equity.
Of course, you’ll have to either downsize or pay rent somewhere. But, if you don’t have a large retirement pot this can be an excellent idea.
Maximize Your Asset
If you sell your home when you retire you can release the equity and won’t have to pay capital gains tax. You’re also likely to save a significant amount of money on monthly bills and you’ll no longer have to worry about maintenance.
In short, you’ll have more money in your hand every month, helping you to enjoy your retirement. It’s a great option for anyone but especially if you don’t have a large retirement fund.
Create Investments
Selling your property also opens up opportunities. Although you can sit on the funds from the house sale, you can also invest them. While stocks and shares carry risk, property is generally considered to be a strong investment option.
A great approach is to speak to NDIS property investment. They specialize in properties for people with disabilities. You can invest in one and rent the property out. You’re likely to find a tenant that will stay long-term. People with disabilities tend to move less often as there is a shortage of disability-friendly homes. Provide them with one that meets all their needs and they’ll stay for life.
In return, you get an income that will allow you to rent a property and enjoy your retirement.
Test Runs
When you rent a property it is surprisingly easy to move again. That means you can try different locations and lifestyles until your find a property you love. It’s a great way of testing out different areas without wasting funds on buying and selling homes.
Reduced Bills
Renting a property after you’ve sold your home generally means you’ll have a smaller house. That means lower bills and, because you’re renting, you don’t need to do any maintenance.
Not only is that a blessing as you age, but it’s also a great way to increase your disposable income and make the most of any opportunity you’re presented with.
Costs Can Increase
When budgeting for retirement you need to remember that the cost of your rent can increase. This is important as you will have a finite amount of money after you retire and you’ll no longer have your house as an emergency cash fund.
Final Thoughts
Selling your house when you retire is a good way to boost your pension pot and continue to enjoy a good quality of life. In many cases, it will make it easier to put funds aside for children and even avoid inheritance tax. You will also find that it’s better than opting for equity release where your house disappears after you’ve passed on and you leave nothing behind.
Selling when you retire isn’t the right solution for everyone. But, it is a good option for many. It’s worth thinking about.
