The Decision to Downsize
Downsizing has become an increasingly popular trend, particularly with baby boomers whose children are out on their own. Moving to a smaller home can free up capital for you to invest while reducing expenses such as upkeep, property taxes, utilities and the like. Downsizing can also mean moving to a less expensive part of the country or a smaller community where living expenses are less—maybe it even means moving to a second home where you've spent your vacations.
What is Right for You?
If you're considering moving out of the family home, ask yourself if you're really ready. Many retirees choose to stay put and enjoy communities where they have solid roots among lifelong friends and family. Others hold on to their larger home in order to accommodate grandchildren or parents who need their support.
Leverage Your Home as an Asset
Whether you choose to downsize or stay put, there are lots of options for converting your asset into money for retirement. Consult with a retirement or mortgage professional about cashing-in on your home's equity while avoiding a major tax bite. Or, check out our information on popular options like 15-year mortgages and reverse mortgages.
Understand Capital Gains Tax
Under current capital gains tax laws, married taxpayers filing jointly can exclude up to $500,000 of gain on the sale of a home, and single taxpayers can exclude up to $250,000 of gain—even if the old one-time exclusion has been taken. Homeowners are allowed to take the exclusion once every two years, and there is now no cap on how much total gain can be excluded during a lifetime. To qualify the home must be your primary residence for two of the last five years.
How Can We Help?
Tools & Resources