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When Is It Okay For Retirees To Sell Their Homes And Live In A Rental Home?

It’s not an easy decision to sell a home; however, after retirement, if you find yourself in a financially difficult situation, you may consider selling it and shifting to a rental property for the rest of your life.

March 25, 2024
March 25, 2024
Rental home

Rental home

It can be challenging to break away from the memories attached to the home you plan to sell after retirement. Before selling your home, make sure that you assess the situation correctly. There are many reasons why you may want to sell your home. Let’s find out when it’s okay for retirees to sell their homes.

When You Should Say ‘Yes’ To Selling Your Home?

After retiring if you want to shift to another city, you may sell your home first because it can be difficult to take care of property after you shift to another city. Another reason could be that if you don’t have enough money to meet your retirement expenses, selling your home can unlock its value and help you meet the money requirement in your retirement. Sometimes people buy a big home assuming that their children will live with them however later on they decide to live separately, in such cases selling your big home makes sense.

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Once you have decided to sell your home, it’s crucial to plan how you would make use of the sale proceeds. Here are some ideas to use the money that you get after selling your home.

ALSO READ: 4 Investment Options For Senior Citizens After Retirement

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Choose A Small Home With Low Rent

After selling your home, you may evaluate your option of whether to buy another home or live in a rental home. Whatever option you choose, prefer a smaller property for retirement. If you plan to buy a new home, a smaller home can save you money and you don’t need to pay much towards its maintenance. If you opt to live in a rental home, you can easily pay the rent without disturbing your retirement planning.

Invest The Money Left In Hand After Selling Your Home For Your Retirement

You can use the home sale proceeds towards paying the existing outstanding loans, buying a new home, creating a retirement fund, strengthening your emergency fund, etc. Invest the fund left in hand after meeting your financial obligations so that it can be used as a retirement fund.

ALSO READ: How Should Seniors Ascertain Their Readiness To Sell Their Homes?

Beware Of Challenges After Selling Your Home

Before selling your home, make sure that your home is well maintained so that it can fetch you a good price. Assess the property rate in the location around your home. Don’t forget to take the help of property, financial and legal advisors when you plan to sell your home. You must ascertain the tax implication of selling your home and discuss it with your tax advisor in advance so that you can lower the tax obligation.

ALSO READ: How Should You Reinvest Rs 1 Crore Retirement Corpus?

Finally

Retirees selling their homes may find it beneficial to shift to a senior living property, especially if their children live separately. It’s important to plan the next abode before selling the existing one. Before choosing your next home, make sure it is comfortable for your retirement, health facilities are available around it and it has adequate security in place.

 

The author is an independent financial journalist.

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