At least until recently, many people would choose the physical location of their home primarily based on where they worked.

It stands to reason that, for a long time, older Americans on the verge of retirement were faced with a decision whether or not their purchased home would continue to serve its goal once it no longer had that valuable perk of being close to work (or close enough, anyway).

The last few years have brought the possibility of remote work for millions of Americans, which has accelerated the number of people evaluating whether now is the time to sell their home, even if they still have a few years before retirement. It’s the kind of decision where thinking ahead empowers you, giving you more options and more flexibility to live your retirement to the fullest.

Debunking the idea of starter and forever homes

In the past, the idea of a “starter” home was that this home would be appropriately modest for a young person or family, and a “forever” home would be a spacious and multi-purpose home that could sustain a family for their whole lives, maybe even be passed down in an estate. While you may have made a substantial investment to buy this “forever” home, every home ownership situation should be weighed against the alternatives: is this home keeping you from moving to your dream location? Is the work of keeping this home in a good condition worth all the time and money, or would you rather spend this time fostering connections and pursuing hobbies? One of the key truths of modern retirement is that you can keep a starter home forever, but retirees sell forever homes too, and the best reason to keep or sell a home isn’t about a label placed on that house. 

Should I sell my house when I retire? Here’s what seniors need to know 

The truth is that there’s no cut-and-dry answer to this question. Instead, the right answer depends on both timing and personal preference. Let’s look at some of the factors you should consider and how each factor might sway you one way or the other.

Current economic climate

The only real rule of the past few years of the housing market has been “expect the unexpected,” leading people to see just how quickly the selling value of their home can change. If you are retiring and considering selling in a recession or general slowing of the economy, especially during a time with high interest rates, your home may or may not sell for those record-breaking prices seen in 2020 and 2021. But if interest rates are lower and times are prosperous, you may find yourself in the coveted position of being the seller in a bidding war, and you might see a higher return on your investment.

At the right price, nearly any property will eventually sell, but the more a market favors buyers, the more you’ll need to seek savvy advice about how people are marketing their homes and how to find the buyer who is ready to pay. 

Neighborhood desirability and home’s potential sale price

It’s easy to see dire warnings in the news like “the real estate market is slowing down” and start worrying that your home will never sell. However, the overall real estate market is huge, from neighborhoods that sell like hotcakes even during a recession to very nice homes that are simply not in demand and therefore are sold for a lower price than expected. 

Consider these two scenarios to see why this is true:

  1. Dean and Marie moved into their home when it was in a desirable area of town, but over the years development has moved elsewhere. The school system has also gone downhill a bit since their kids graduated. They want to move to live close to the beach, ideally in a luxury condo.
  1. Vance and Jennifer bought a home decades ago in a small bedroom community that has since blossomed into an arts-and-culture hub and is constantly growing. Their neighbors who sold their house six months ago got a dozen offers for three times the original value of the house. Vance and Jennifer want to move into the 2-bedroom ADU (accessory dwelling unit) on their daughter’s property to be close to their twin granddaughters as they grow up.

As you can see, Dean and Marie are likely to make less of a profit. Additionally, they will be moving into an expensive future mortgage, while Vance and Jennifer may make a tidy profit. A good real estate agent can help you get a clear picture of what your house is actually worth given the national headlines since every neighborhood is different. 

Overall personal finance picture

As we saw above, your personal finances are also a place where trade-offs have to happen. If your retirement investments or other assets have appreciated well, you may be able to sell your home without concern about selling a house to fund retirement. However, if you are seeing some lean times during retirement, one way to make your money last longer is to stay in a paid-off home, or at least keep paying on a mortgage where you already have substantial equity. Another option is selling your house for retirement funds and seeking a much less expensive place to live.

You personally know how much of a liability your home is; if you see some expensive repairs in the future, it might be time to sell and move into something that won’t have as much unexpected expensive maintenance. A financial advisor can often bring helpful insight to this conversation. 

What do you want from your retirement?

Whether it ultimately makes sense to sell, though, also just has a lot to do with what you want to do. If your home puts you far away from the sights you want to see or the family you want to spend the most time with, it is a liability. If your home is situated in exactly the spot you’ve always loved and is the beloved homestead for every holiday, you might want to live in it forever! Consider what this home means for your day-to-day retirement life and let that shape your choice.

Options if you’re selling your home when you retire

So let’s say you’ve crunched the numbers, soul-searched, and paid attention to the market, and you’re going to sell your house. What can you do once it’s done? There are some seriously exciting options, including adventures like living full-time in an RV, but we also recommend you consider these options for making your life more retirement-friendly once you’ve sold your home. 

Downsize for a more optimal location and lifestyle

Many people find that the home where they raised children becomes “too much house” after kids grow up – it’s more stuff, more clutter, or just more to clean! A great option in retirement is to really evaluate your favorite elements of your home and buy a different home that will fit just the things you love most, nothing more. Yes, it means some serious trimming and maybe digging through a garage full of items that haven’t been used in a while, but the reward is sweet: living in a space that is affordable and also can be located in exactly the spot where you want to live. 

Choose maintenance-free or community living

Everyone has their own mental image of life in a retirement community, but the possibilities for independent living in a retiree-focused area are truly endless. Some retirement communities are much like living in any recently-built HOA-based community, with the benefit of groundskeeping services or a community standard for how the neighborhood will look. Other communities offer a variety of amenities, from onsite dining options to fitness centers and clubhouses. Retirement communities may also feature various tiers of care, including things like housekeeping services, onsite medical attention, or other available options that can make even a serious injury or illness easier to handle. It’s worth giving them a look, particularly if you’d like to make friends and have easy walkable access to many of your daily lifestyle activities. 

Rent for flexibility and mobility

Maybe you simply haven’t settled on a retirement plan yet, knowing that you could spend some time with your children and grandchildren, maybe do some traveling, but you also want to keep roots in a particular community. Renting, particularly month-to-month renting could be a perfect solution for flexibility and the ability to change plans down the line. If you’ve been a homeowner for decades, you might be surprised by the ways renting helps: rentals in large complexes often have amenities like a pool or common areas, and not having to maintain the grounds around your apartment can save a ton of time that you spent meticulously handling your home’s landscaping. 

Focus on the excitement about the future when selling your home

Selling your home when you retire can bring up a lot of memories and emotions. So much of life does happen at home, and if you raised children in this house, it makes a lot of sense that this decision keeps you thinking for a while. However, you’re moving forward and taking on exciting new challenges as you plan for retirement, and the equity you have in your home may be a key feature in making those dreams and plans a reality.