Your home is more than just where you live—it’s where you’ve built memories, raised your family, and shaped your lifestyle. But for many affluent retirees, it’s also one of the most valuable and underutilized assets on the balance sheet.
As you transition into retirement, the role your home plays in your financial life may change. Whether you plan to stay put, downsize, relocate, or access your home equity strategically, real estate deserves thoughtful planning just like your portfolio, taxes, or estate.
The Emotional and Financial Realities of Real Estate Transitions
For many families, the idea of selling a long-time home or moving can be deeply emotional. There are memories, routines, and even identity tied to your space. But your needs change:
- Is the house too large to maintain?
- Is it close to the people and places you want access to in retirement?
- Does it support aging in place?
At the same time, the financial implications are significant. Property taxes, insurance, and upkeep can become a larger share of your retirement budget. And with home values at all-time highs in many areas, there may be substantial equity tied up that could otherwise support retirement income, gifting, or legacy goals.
Strategic Uses of Home Equity in Retirement
Home equity doesn’t just sit there—it can be a flexible tool when used wisely. Here are several strategies to consider:
1. Downsizing
Selling a larger home and buying a smaller, more efficient one can:
- Free up hundreds of thousands in equity
- Lower ongoing maintenance, insurance, and property tax costs
- Simplify your lifestyle
For example, a couple sells a $1.2M home and purchases a $700K condo. The $500K difference, after tax considerations, can be invested to generate income or fund charitable goals.
2. Relocating
Whether moving closer to family, better weather, or a lower-cost-of-living area, relocation offers a chance to realign your home with your priorities.
Some factors to evaluate:
- State taxes (income, property, estate)
- Access to quality healthcare
- Walkability or community access
- Suitability for aging in place
3. Home Equity Line of Credit (HELOC)
For affluent families, a HELOC can be a tax-efficient source of liquidity to:
- Avoid selling investments during a downturn
- Cover a large one-time expense (e.g., a wedding or renovation)
- Bridge the gap before Social Security or pension income begins
4. Reverse Mortgage (Strategic Use)
Not just for cash-strapped retirees, reverse mortgages can:
- Provide non-taxable cash flow in a low market
- Delay portfolio withdrawals (reducing sequence-of-returns risk)
- Offer a buffer in years where income might trigger higher Medicare premiums
They require careful evaluation, but for high-net-worth retirees with few liquidity needs, a reverse mortgage line of credit can be a strategic planning lever.
5. Bridge Financing or Opportunistic Investing
Some families use their primary home equity to:
- Purchase a second home or vacation property
- Help children with a down payment
- Invest in alternative assets or private opportunities without disrupting their portfolio
Real Estate in Estate and Charitable Planning
Your home can also be part of your legacy strategy:
- Gifting property: Gifting appreciated real estate to heirs or charity can carry significant tax advantages.
- Charitable trusts: Using real estate to fund a Charitable Remainder Trust (CRT) or
- Donor-Advised Fund (DAF) can reduce capital gains exposure and support philanthropic
goals. - Multigenerational planning: For families interested in shared vacation homes or
moving closer to children and grandchildren, real estate choices intersect with lifestyle,
tax, and estate considerations.
The Wealthquest Approach: Real Estate as a Planning Lever
Real estate decisions often get siloed from retirement planning. But at Wealthquest, we treat your home as part of your total financial picture.
Our CFP® professionals and in-house CPAs work together to evaluate:
- Cash flow impact of downsizing or relocating
- Capital gains exposure and step-up opportunities
- Tax-efficient use of home equity or HELOC proceeds
- How real estate fits into your broader estate and charitable plans
We model scenarios that help you make informed choices—whether that’s staying in your home for life, unlocking equity now, or passing property to the next generation with intention.
Final Thoughts: Be Strategic With Where You Live and What You Own
Your home is more than your largest asset—it’s your most personal one. That’s why it deserves more than a quick decision based on market timing or emotion.
If you’re exploring a real estate transition or wondering how home equity fits into your retirement plan, schedule a conversation with Wealthquest today. Our coordinated team of CFP® professionals and CPAs can help you make a decision that supports your lifestyle, tax strategy, and long-term goals.
For informational purposes only. Past performance is not indicative of future results. Investing involves risk, including the possibility of loss of principal. Wealthquest Corporation (“Wealthquest”) is an SEC registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. The ideas and opinions expressed herein do not constitute legal, tax, or investment advice or a recommendation of any particular security or strategy. Before making any investment decision, you should seek expert, professional advice and obtain information regarding the legal, fiscal, regulatory and foreign currency requirements for any investment according to the laws of your home country and place of residence. Any forward-looking statements or forecasts are based on assumptions and actual results may vary. Information presented from third parties is believed to be reliable, but no warranty is provided. Wealthquest is not required to update information presented, unless otherwise required by applicable law. For more information about Wealthquest, including our Form ADV Part 2A Brochure, please visit https://adviserinfo.sec.gov/firm/summary/141473 or contact us at 513-530-9700
