Adding the nest to the retirement nest-egg?

Selling your home is one way to potentially create a tax-free cash windfall that would let you enjoy more of your money now and boost your spending power throughout retirement.

Your financial consultant can show you a number of ways to convert your home equity into a reliable and predictable cash flow. Then, you can compare your options and decide on the one that’s right for you, your family, and your estate. Knowing you have financial alternatives, retirement could be the time to think more about how you want to live than where you want to live.

Here are a few considerations to discuss with your family and your financial planning team.

Renting can reduce a lot of stress.

• Your retirement may include out-of-town travel to visit kids and grandchildren. A lockand-leave rental lets you pick up and go without having to arrange for someone to check on your home or pick up mail.

• Letting your children inherit your home can lead to tensions, especially if one child is forced to buy the others out. Selling now, and leaving cash and investments to your beneficiaries may be less stressful on them.

• When you rent, your landlord will be responsible for repairs and maintenance. You have more free time and fewer unexpected bills.

Giving up some control in exchange for a simpler life.

• You may not be able to redecorate or renovate to suit your taste.

• Your landlord might decide to sell or move in themselves, in which case you’ll need to find a new place to live.

• If you’re moving from a single-family home into a high-rise condo or apartment building, you may have to get used to less privacy, a new community, and the possibility of noisy neighbours.

Can you age into your current home?

• Long driveways, big lawns, and stairs could challenge you as you get older. If you can’t ‘age into’ your home, you may need to make major renovations, such as ramps or lifts, in order to keep living there.

• The longer you stay in your home, the greater the possibly that prices could drop in your neighbourhood or city. Depending on your age, you may prefer the guaranteed income that could be generated by an annuity, in conjunction with a well-diversified investment portfolio.

Downsizing isn’t just about the size of your home.

• An alternative to renting or staying put can be to downsize. Keep in mind that a condo in a desirable area could cost as much, or more, as a singlefamily home.

• Downsizing should be less about size, and more about being near family, restaurants, recreation, health care, and public transit.

Good financial planning is the best way to take out the guesswork. Start by talking to your financial consultant. They’ll help you assess the implications of converting real estate assets into additional retirement income and the advantages for you, your family, and future generations.

Jeff Somers, BA, RRC, CFP, works at Investors Group in Charlottetown. This column is written and published by Investors Group Financial Services Inc. and Investors Group Securities Inc. It presents general information only and is not a solicitation to buy or sell any investments.