Maximizing Retirement Opportunities: Why Downsizing Isn’t Always the Best Choice

Are you approaching retirement and wondering what the best financial move is for you? One option that many homeowners consider is downsizing their home to free up some cash for retirement. However, this strategy isn’t right for everyone. In fact, one retiree found that keeping his home was actually his smartest money move.

Stephen Roth, a financial planner with 20 years of experience, emphasizes the importance of personalized retirement planning. He believes that each retiree’s journey is unique and should be tailored to their specific goals and preferences. For one of Roth’s clients, staying in his North Jersey home instead of downsizing turned out to be the best decision.

This 76-year-old retiree found himself in a committed relationship and wanted to remain close to his partner, who lived in Westchester. By keeping his home, he was able to maintain his independence and live within a two-hour drive of his adult children and grandchildren. Additionally, he had enough assets to cover his expenses in retirement without needing to sell his home.

Roth explains that keeping the home as an asset provided the retiree with potential gains and profit from owning the investment. Furthermore, by not selling the home, his heirs would benefit from a step-up in cost basis at the time of his death, resulting in lower capital gains taxes when the home is eventually sold.

Ultimately, this retiree’s decision to keep his home was the right choice for him. Roth emphasizes the importance of personalized planning and how each retiree’s journey is unique. If you’re approaching retirement and considering downsizing, it’s essential to weigh the risks and opportunities before making a decision.

For more personalized retirement planning advice, consider consulting with a financial advisor like Stephen Roth. They can help you navigate the complexities of retirement planning and ensure that your financial goals are met. Remember, when it comes to retirement, there is no one-size-fits-all solution. It’s all about finding the right strategy that works for you.