How the Home Factors into Retirement and Estate Planning for Seniors

Home Factors into RetirementAs a senior, your home is a big factor in your life today and in planning for tomorrow. Some seniors want to downsize into a smaller home, and pocket some cash for retirement. Others want to renovate some aspects as they want to age-in-place. Some just like the security that their mortgage is paid off or nearly paid off and are looking forward to a reduction in expenses.

Whatever your situation is, there are three key areas of life where your home factors into retirement and has a big impact on decision making. Let’s dive into those areas.


From a financial perspective, many seniors have paid off their 30 year mortgage or are very close to it.  This means you have nearly 100% equity in your home. But what is your home worth? You really need to get an estimate on the value of your home as this impacts your total net worth at the time.

In addition, the real estate market is always changing so it is also a great idea to get a three year forecast of what your house might be worth. If economic conditions are good and your neighborhood is a desirable place to live, the forecasted value of your house will increase. If your city or neighborhood is experiencing difficult changes, your house value could be forecasted to decrease.

Depending on whether you have other sources of retirement income, you might choose to sell your house. Take the cash at closing and buy a smaller and cheaper house with less maintenance. And take the extra cash and invest it or create some monthly income from it.

Depending on your age, health, and goals, you may want to remain in your home. But you home may require an aging-on-place concept. If your health deteriorates, you might need to spend money on renovations to your home. Renovations like access ramps, modifications to stairs, and kitchen and bathroom modifications that will keep you safe.

As you get older, you may begin to forget important preventative maintenance tasks to keep the home efficient. But more importantly keep the home safe and healthy. Having a maintenance schedule to remind you or your adult children to look after the home is another key aspect of retiring in your current home.

Estate Planning

Your home and the contents inside of it are a big part of the value of your overall estate. It is important to include the house and all your personal property in your overall estate plans. It all starts with coming up with a home inventory of all your personal property and the fixed assets of the house.

With the home inventory, you most likely acquired things throughout your life. These are usually valuable items like art, antiques, collections, family heirlooms, and other collectibles. In addition, there are usually sentimental items that you want to pass down to heirs. Going through your entire home inventory and deciding which heir, charity, or other party receives those items is an important component to an estate plan.

In addition, planning for any large medical care costs is part of the estate planning perspectives. Some will consider taking out home equity to pay for medical care costs, which gets back to understanding the estimated value of the house

End of Life Distribution

Upon your death, your estate plan should take care of the distribution of your personal property based on your wishes. Depending on your estate tax situation, often times your heirs will have to sell the home. Selling the home is often required pay taxes. Keeping good records of what you bought the house for, how much you invested in it with remodels, and other maintenance and property records will make it easier for your heirs to sell the house. All while maximizing its value.

As a senior, being aware of the various financial aspects of your home and the property inside it is a big part of being prepared. With such a large percentage of your net worth and ongoing expense being home related, it is wise to make sure you have everything documented. This will enable you to make the smartest decisions about your home as you progress through your retirement years.