As you near your retirement, you may be weighing whether you should sell your home and rent or whether you continue being a homeowner. Whether you rent or own your home, housing costs are a severe part of your retirement budget. Thus, the decision to own or rent is highly dependent on your financial situation and goals.
Owning Your Home During Retirement
Being a homeowner during your working years has serious advantages, including but not limited to:
- Tax incentives
- Equity
- Stability for your growing family
These factors were beneficial to a working and growing family. However, most of them are no longer valuable to a retiree.
For example, tax incentives in mortgage interest deductions and property tax deductions are not as highly advantageous for a retiree with limited to no income and a paid-off mortgage balance. Thus limiting the tax incentives of owning a home during retirement.
Another factor in homeownership is providing a stable home for your growing family. However, this is less to be factored in during retirement since children might have moved out by that time. Thus, eliminating the need for extra rooms.
As for equity, it might be the right time to enjoy it! You’ve worked hard to maintain your home and your retirement is the perfect time for you to enjoy the fruits of your labor.
Also, there are numerous disadvantages of being a homeowner during retirement. Some of these includes:
- Inability to move to a different place at any given time
- Property taxes
- Maintenance costs
As a retiree, your primary concern might be in making sure your financial security is in place. Transitioning from having a stable paycheck to a limited income might mean that you need to make sure that your costs are down and predictable. However, homeownership during retirement can cause havoc to cost since unexpected maintenance costs can arise with little to no notice. This is highly problematic and can wreck your budget.
In addition, owning a home during retirement can mean that you may need to stay put in your current property. Although some may plan to stay at their current place, some may want to move to a smaller place or explore other areas, including homes in a warmer setting!
Renting During Retirement
Similar to the analysis above, renting during your working years pose disadvantages. Some of these disadvantages include:
- Unpredictable rent increases and eviction
- No equity
- No tax incentives or benefits
- Inability to customize home
These factors still pose disadvantages during retirement. However, some of them might not be a bigger deal now that you are retiring as they were during your working years. As discussed above, factors such as equity and tax incentives are regarded differently during retirement than during your working years.
Nonetheless, renting can provide serious advantages to retiree, including, but not limited to:
- Liquidity
- Low maintenance cost and responsibility
- Flexibility
- Fewer cost and taxes
By selling your home and renting, you can liquidate your equity for ease of accessibility during your retirement years. More so, renting can avail you much lower costs in maintenance and taxes and responsibility in the upkeep of your residence. Also, renting would provide you with the flexibility to move as soon as your lease contract ends.
Therefore, the decision to sell a home and renting or continue being a homeowner has its advantages and disadvantages. However, as you may realize in this article, the value of homeownership vastly differs during retirement from your working days. The financial security and freedom from homeownership responsibilities might allow you to enjoy your retirement years deservingly.
Ready to Sell Your House?
If you’re interested in selling your home in Massachusetts quickly and want to save yourself the time, headache, and money, consider working with us.
At Pavel Buys Houses, we are licensed real estate agents in Massachusetts that can help you sell the house competitively in this current market to help you secure peace of mind and financial security to enjoy your golden years. If you don’t want the time commitment and frustrations of selling the property the traditional way, we also buy homes fast in Massachusetts (and pay cash while offering fast closings!).
Get in touch with us today for a consultation or to receive this free, no-obligation cash offer at 781-309-7085.