After working hard for so many years, you deserve to relax and enjoy your golden years. If you’re worried about finances, you may not realize the hidden financial power of using your home equity in retirement.
Maybe you’ve paid off your mortgage or are getting close. Or you’re considering downsizing to save money or simplify your life. In either case, you might already be wondering, “Should I sell my home to access equity?” If you’re concerned about cash flow or want to make dreams come true in your next chapter, creating a smart home equity strategy can help.
Selling your home might seem overwhelming. However, the team of seasoned Dallas realtors at House Hunters of Dallas, which has been doing business since 1985 in the DFW metroplex, can streamline the process.
If you’re still unsure, let’s explore ways home equity can help you in retirement.
Ways You Can Use Home Equity in Retirement
Reduce Financial Stress
One of the primary benefits of utilizing home equity in retirement is alleviating financial stress. Access to your equity can give you financial breathing room.
If you’re heading into retirement and still juggling debt, you’re not alone. A recent LendingTree analysis showed that 97.1% of U.S. adults at retirement (ages 66 to 71) carry non-mortgage debt.
Struggling with multiple bills can be mentally and emotionally taxing. You can use equity proceeds to pay off credit cards, auto loans, medical bills, and other debts that might have high interest rates, along with monthly minimum payments.
Eliminating debt will free up money each month. But more importantly, it will give you peace of mind and help relieve stress.
Fund Your Travel Dreams
The hassles of homeownership, bills, working, and raising a family all place demands on your time, leaving little time to travel and explore the world. This is probably why traveling is a common retirement dream.
Maybe you want to tour France, Italy, or Spain. Or you might long to visit Hawaii or go on an Alaskan cruise. Perhaps you want to rent an RV and drive from the East Coast to the West Coast, seeing lots of beautiful sights across the U.S. or visiting long-distance loved ones.
The post-work travel possibilities are endless if your schedule is open and you have the means. This is where home equity can lend a hand.
If you sell your home or downsize, you will have fewer responsibilities, more opportunities, and adequate financial support (from home equity) to explore the world beyond your front door.
Gift or Help a Family Member or Loved One
Brightening a family member or loved one’s life with an unexpected gift or helping them through a challenging situation is priceless and can cause ripples of joy.
Helping a grandchild with college, gifting adult children with a honeymoon or downpayment on a home, or helping a loved one get out of debt are examples of life-changing, memorable gifts that home equity funds could help you deliver.
But gifts don’t have to be large or extravagant to mean a lot to the people you love. Home equity funds can help you do all kinds of random acts of kindness when the circumstances arise.
Pursue Hobbies or Start a Small Business
Retirement will allow as much time for resting and relaxing as you want. Some people want to pursue their passions after leaving their 9-to-5 job.
Home equity funding can allow you to do hobbies like photography, bird watching, woodworking, painting, golfing, restoring furniture, and so much more.
If you’ve dreamed of launching your own business, like a restaurant, gift shop, or landscaping service, home equity funds could give you the startup capital you need.
Donate Time and Money to a Nonprofit
Donating your time and money to your favorite nonprofit is a wonderful way to pay the good fortune you acquired during your working years forward to support a worthy cause.
In fact, many retirees enjoy doing just that.
Fidelity Charitable’s “Charitable Living and the New Retirement” study reveals that 78% of pre-retirees and retirees aged 50-80 prioritize charitable giving. Also, 71% of pre-retirees and 55% of retirees volunteer regularly, with many giving 13 hours or more to causes they care about.
When considering giving, think about charities and organizations that hold meaning for you. Places like the Humane Society, Red Cross, United Way, or your local food banks or homeless shelters always need volunteers and monetary support.
Using part of your home equity cash and volunteering your time for a charitable cause is a win-win for you and the nonprofit that you help. The intrinsic rewards you’ll receive in assisting others are truly immeasurable.
Boost Your Emergency Fund
Saving money for unexpected expenses when you retire is a smart financial move. Mortgage payments, utilities, groceries, school expenses, and raising a family can make it hard to save while you’re working.
Setting aside three to six months of your current living expenses for unexpected events is a standard recommendation. When planning for retirement, it’s also a good idea to factor in an emergency fund for medical expenses, prescriptions, car repairs, and other unexpected costs.
You can use home equity to establish or boost your retirement emergency fund, which can also bring greater peace of mind.
Make Daily Living Easier with Home Modifications
Physical changes in muscles, bones, and strength occur naturally with aging. Whether you downsize or stay in your home, you may need to make modifications to accommodate changes in mobility or address medical challenges.
Home equity funds can cover expenses for things like installing grab bars in the bathroom, replacing a bathtub with a walk-in shower, or installing a touchless kitchen faucet.
Your doctor, physical therapist, or a mobility specialist can make appropriate recommendations.
House Hunters of Dallas is Here to Help
The experienced team at House Hunters of Dallas can help you determine what your home is worth and how much home equity you have.
With no closing fees, no commission, and no required repairs, House Hunters of Dallas is your go-to resource to sell your home as-is in Dallas for a fast, hassle-free sale that gives you quick access to home equity so you can move on, enjoy your retirement, and fulfill your dreams.
This article was created by an external contributor. Members of The Dallas Morning News editorial and news staff were not involved in the creation of this content.
