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Homeownership in Retirement: Asset or Anchor?

June 07, 2024

June is National Homeownership Month, making it a great time to reflect on your biggest asset: your home. For pre-retirees and retirees, your home plays a critical role in your financial picture. But is it always an advantage? Let's explore the financial implications of homeownership in retirement.

Benefits of Homeownership in Retirement:

  • Reduced Housing Costs: Once your mortgage is paid off, your monthly housing costs become significantly lower compared to renting. This frees up cash flow for other expenses or leisure activities.
  • Stability and Familiarity: Your home provides a sense of security and comfort, especially if you've lived there for a long time. Familiarity with your surroundings can be a plus during retirement.
  • Potential Source of Income: Downsizing to a smaller home can free up equity that can be used to generate income.

Challenges of Homeownership in Retirement:

  • Maintenance Costs: Homes require ongoing maintenance and repairs, which can become more burdensome as you age. Factor these costs into your retirement budget.
  • Decreased Mobility: Your home's accessibility might become an issue as you age. Stairs, lack of grab bars, or a large yard might necessitate a move in the future.
  • Limited Liquidity: Your home equity is a tied-up asset. Accessing this cash readily might require selling your home, which can be disruptive.

National Homeownership Month is a good time to assess your home's role in your retirement plan. Consider your long-term needs and how your home fits into them. 

Consulting a financial advisor can help you develop a strategy to maximize the benefits of homeownership in retirement. Using our proprietary process, The Questpoint FORMula, our financial advisors monitor your critical life and financial events (like homeownership!), to help you make mid-course corrections as needed through your retirement journey. Schedule a meeting with us to learn how this process can work for you!