If retirement is coming up, it’s a good idea to start planning for what’s next. You’ll want to ensure you’re financially prepared to enjoy the lifestyle you desire during retirement.

You might not know it, but your home could be a hidden goldmine of cash that you haven't considered yet. According to data from the Federal Housing Finance Agency (FHFA), home values have surged by almost 60% in just the past five years.

That increase really helped to raise your net worth significantly. According to Freddie Mac, during that same five-year stretch:

“ . . . Boomer overall wealth increased by $19 trillion, or $486,000 per household, half of which is due to house price appreciation.”
— Freddie Mac

If you've been in your home longer than that, you likely have even more equity built up. If you're looking to tap into the wealth you've accumulated over the years, it might be a good idea to consider selling your house to downsize.

Why Downsizing Might Be the Right Move

Selling your home now could be a smart move if you're looking to downsize or relocate to a more affordable area. It can help you tap into your home equity, giving you the financial boost you need for retirement. Whether your plan is to travel, spend quality time with loved ones, or simply achieve peace of mind regarding your finances, using that equity can significantly impact your future. As Chase mentions:

“Retirement is an exciting time. Selling your home to take advantage of the equity or to downsize to a more affordable home can open up additional options for your future.”
— Chase

A smaller home can really support your retirement in a few ways:

1. Reduce Your Living Expenses

Data from AARP indicates that the top reason adults aged 50 and above decide to move is to lower their cost of living. By downsizing to a smaller home or moving to a more affordable location, they can significantly cut down on monthly expenses such as utilities, property taxes, and maintenance costs.

2. Streamline Your Lifestyle

Living in a smaller home usually means you’ll have less to take care of and fewer responsibilities. This can give you more time and energy to concentrate on what truly matters during your retirement.

3. Increase Your Financial Freedom

Selling your current home allows you to tap into your equity, converting it into cash that you can use as you please. Whether you want to invest, pay off debt, or build up your savings, this move can pave the way for new opportunities ahead.

The First Move Toward Your New Journey

If you're considering downsizing, partnering with a real estate agent is a smart move. Your agent can guide you on how much equity you have and ways to utilize it. Beyond that, they'll assist you throughout the whole process of selling your current home and locating a new one, ensuring you make a smooth transition into this new chapter of your life.

Bottom Line

If you're thinking about retiring in 2025, it might be a great idea to downsize now and tap into the equity you've built in your home. Let's begin planning your move so you can enjoy that everyday Saturday feeling.