Need Retirement Income? Sell Your House!

    For many people, homes are a large chunk of their nest egg. As retirement draws near one must consider how to consolidate finances and fund retirement. There are two primary ways to use your home for this purpose. One is through a reverse mortgage program, and the other is to sell your home.
     
    There are a few disadvantages to a reverse mortgage. For one thing, you must have the home nearly paid off. In addition, reverse mortgages are notoriously expensive. Because reverse mortgages do not have income requirements, the fees and interest are often much higher than a traditional equity line. Another disadvantage is that it leaves your heirs with extensive additional paperwork and expense after your passing. Once you die, the home either has to be sold to repay the loan, or your heirs have to use your estate to pay off the loan.
     
    Selling your home to fund retirement is often the best option for many people as they near their golden years. Long-time homeowners know that their homes have increased in value since their original purchase. Often, that equity represents a princely sum that, if accessed, could yield an even greater return invested elsewhere. One way to get at that cash is to sell.
     
    So where do you go once you sell your home? Some will sell out and trade down to a smaller home. Some will sell out, keep the sale’s proceeds and rent. You could sell and pay all cash for a cheaper home. Cash left over from the sale could then be invested to throw off additional retirement income for your use.
    Another thing to consider is one’s health in their later years. Many people are forced to move into assisted living facilities. If this happens, selling one’s home is the best way to fund the expense of these costly but necessary nursing expenditures.
     
    Whether you own or rent, sell or stay, recognize that your house is more than a home. A home is a place of heartwarming memories, love, dreams, and good feelings. Fools cherish the thoughts it invokes. But “home” is a mental concept, and we can have a home virtually anywhere. (And hey, who knows? Maybe soon in the future you’ll just have a home in cyberspace!) A house is a structure of sticks and bricks, of walls and beams. As such, it has a monetary value. That value can and should be used when needed.

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