We all put off making decisions that take us out of our comfort zone. Imagine a decision as important as moving from your home that you’ve lived in for the last 35 years! In my survey of my senior clients, the average time lived in their last home before moving to senior housing was 34 years. This same survey pointed to fear of change as the number one reason my clients were not moving when a change was needed.
When procrastination takes center stage, we find reasons not to move forward. One main excuse not to improve our housing situation is convincing ourselves that we don’t need to make a change. One way to avoid a move is to convince ourselves that we live in our homes for free. In most or all cases, that is not reality.
I work closely with senior financial planners so that my customers have all of the financial facts before making an important decision such as moving to condominiums, apartments, or senior communities. These trained professionals will interview my clients and point out the costs to live in their homes. Utilities, taxes, insurance and maintenance are a few of these costs. Another major consideration is the cost of your equity not working for you. If we are about to enter a real estate market which may be flat or with lower appreciation than we’ve seen in the past, then your equity is not working to its maximum ability. Most homeowners will pay little or no capitol gains tax when the home is sold. Couples are exempt up to $500,000 in gain and single homeowners are exempt up to $250,000 in gain. The requirement is to have lived in the home 2 out of the last 5 years as principal residence. Therefore, when the home is sold, this tax free equity can be invested to work for your independence and freedom! If interest rates do go up, you would be receiving higher rates of return on your nest egg.
In summary, take a look at the next 5-10 years of your home ownership. Be honest as to your physical limitations as well as your peace of mind. Don’t wait for circumstances to determine your next move. Talk to a Senior Financial Planner, as well as a Senior Real Estate Specialist to know how much equity you have in your home so that you can benefit from your many years of your home’s appreciation. Use your assets and knowledge to achieve freedom and independence that you truly deserve!