In order to retire, you need to have a retirement fund with enough money to last you throughout retirement.
If your retirement fund is lacking, you may find yourself semi-retired, working part-time in elderly age, or leaving retirement to work full-time again.
But you may have the answers to your retirement issues without knowing it. In fact, you may be sitting in it — your home.
Here are four reasons why you should sell your home before retiring and instead rent in a cheaper state or double up with other seniors to share rental costs.
Maintenance and repairs
Being a homeowner requires a dedicated commitment on your part to enact routine inspections and repairs on a regular basis. And physically keeping up with a maintenance and repair schedule will only become more arduous and difficult as you age.
There will always be parts or components of a house that will require repair or replacement.
Selling your home before retirement could save you some aches, pains, and increased medical bills as you age from having to fix your home.
The typical retired couple will pay over $315,000 in out-of-pocket medical bills throughout the course of their retirement.
And that estimate is for out-of-pocket medical expenses that Medicare won’t cover.
Selling your house before retiring will free up funds for unexpected medical expenses.
Depleted personal funds
The average retiree may receive about $1,600 in monthly Social Security payments and have very little savings, if any at all.
The cost of living in the United States is always increasing. This is a fact that also makes retirement a virtual impossibility for many senior citizens living check to check.
Selling your house before retiring will give you an influx of cash, short-term financial security, and time to develop a long-term financial plan.
Depending on where you live, property taxes can be just as financially taxing to endure as the cost of maintaining a home.
The average property tax rate was 1.1%, or about $3,700 annually.
However, the property tax alone can exceed $10,000 in many high-cost-of-living states.
The thing about property taxes is that they generally increase over time. So, depending on where you live, your property taxes combined with your home finances will become steadily unmanageable as you age.