Is Moving Part Of Your Retirement Plan?

Retirement is a major life switch.  After years of hard work, you finally get to enjoy the fruits of your labor and for many Americans, retirement can also mean moving or purchasing a different home.  Whether you’re looking to downsize or buy the home you’ve always wanted, moving may be part of your greater retirement plan.

If you’re looking to move, then there’s definitely a little housekeeping you should be doing if it’s part of your retirement plan.  As a retiree, you likely have more equity, flexibility, and different needs than you did when you purchased your first home.  With so many new factors coming into play, let’s take a look at what it means to move as part of your retirement plan.

Take Time to Consider Your Time

As you head into retirement, you’re likely looking back at your career and forward to the next couple of decades of your life.  And while these are valuable things to look at and reminisce on, make sure to take some time and evaluate how long you’ve been in your home.  The time you’ve spent in your home isn’t just sentimental, it’s valuable too.

The time you’ve put into your home is certainly weighed heavily as equity will be a big factor for you in deciding to move for your retirement.  All of those payments, investment, and improvements you’ve made in your home (or homes) certainly is worth something, and knowing what kind of equity you have available to you is a necessary part of your financial plan.

Look at Your Goals

Retirement, while exciting and often relaxing, can come with some definite considerations, and when it comes to moving, you should be looking at your goals and factoring in how they affect your overall plan.  If you’re choosing to move as part of your retirement goals, consider if you’d like to move into a fully paid house or if you don’t mind having payments.

Additionally, think about how much (if any) work you’re comfortable doing in a new home.  With more time likely available to you, perhaps doing work in the home (whether by yourself or by a contractor) may be something you’d like to do as you straddle between homes.  Of course, any work you do in a home will be dependent on the goals you have for your retirement and how those goals fit into homeownership.

Your Home as Leverage

One thing that changes as you retire is equity and how that equity can be accessed.  In our tip above, we asked you to look at the equity you’ve put into your home and understand just how valuable it is.  As a younger borrower and homeowner, you don’t necessarily have the leverage of equity that you do later in life after decades of homeownership.

As a retiree, even if you choose to stay in your existing home, you can access far greater lines of credit with the equity you’ve accumulated.  With the equity you have in your home, you can make needed improvements through a cash-out refinance, access a home equity line of credit (HELOC), or even take out a reverse mortgage to take care of things in the home, medical expenses, or end-of-life care.

Since all of these mortgage instruments are secured by the equity you have in your home, there is very little risk to lenders and a major upside to you as a retiree.

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