Retirement is the phase of your life wherein you can enjoy living comfortably without any worries about your boss, submitting reports or anything else for that matter. That is if you were able to prepare enough for your retirement. Given the increasing prices of maintaining a house, should retirees sell their home and rent instead?
A new report from Realtor.com states that more baby boomers are selling their houses this year. This is also reflected in the report from the National Association of Realtors, which states that the median age of home sellers has increased from 46 to 54.
This means that homeowners who are about to retire in a couple of years are already liquidating their real-estate assets even before the housing market recovers from its downturn. This also presents the question as to whether retirees should go with the trend and sell their home or if they should keep living in their house.
"If retirement savings present the risk of a shortfall, one of the best things you can do is liquidate real-estate assets," said Christine Benz, the director of Morningstar Inc.
Benz stated that liquidating real-estate assets were a better option than choosing to work beyond the retiring age. While it may be tempting to sell the house and rent one instead, retirees must also consider the rising prices of homes in the market.
As previously reported on Realty Today, the monthly mortgage payment can sometimes be lower than the monthly rent.
However, renting a home also presents certain advantages for retirees, as renting no longer entails the same responsibilities such as tending to the lawn, shoveling during winter and repairing damages at home.
The aforementioned publication, therefore, states that the best option for retirees is to sell a home only when you are trading down.
"Certainly thinking about taking the equity that's been built in a primary home and buying something else you can own debt free and with low expenses is smart," said financial planner Charles Farrell.
