What will your life look like once you retire? Do you plan to travel? Visit grandchildren more often? Maybe retirement is something you do more on paper because you still plan to work. Whatever your particular retirement looks like, you have to think about your home. Some people elect to downsize from a house that was once full of kids. Others would stay forever, if possible. Here’s a look at which option might be right for you.
There are plenty of reasons to put your house up for sale. If you own your home outright or have a lot of equity, selling could be the boost your retirement accounts need. “If you’ve lived in your home for the last two out of five years from the date of sale, you can exclude up to $250,000 of the capital gain from the sale of the house if you’re single. If you’re married, you can exclude up to $500,000,” says Carlos Dias Jr., wealth manager at Excel Tax & Wealth Group in Lake Mary, Fla.
Many people today are going into retirement without enough money saved. To avoid being caught in a future housing crisis, selling while the market is healthy might be wise. See also Avoid the Downsides of Downsizing in Retirement and Retirement Living: Renting vs. Home Ownership.