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“Downsizing or making plans for your primary residence post-retirement is a key component of retirement planning, not an afterthought.”

Ten Ways to Think Outside The Bank – Part 5

Q: When’s the best time to master the “Sensei Downsizer Move”?
A: Before you become a Sensei!
Downsizing or making plans for your primary residence post-retirement is a key component of retirement planning, not an afterthought that crops up on birthday #66 and 2 months.

Moving Parts

Once you retire, mortgage calculations, strategies, and viability become complex. You can be “cash-rich” and “income poor” if the formula doesn’t favor the structure of your assets. In addition, there are tax considerations to navigate. So plan ahead to master this move.

Beyond the Profit

The perfect plan unique to your circumstances and bucket list should be analyzed in terms of ROI and lifestyle intangibles.
On one hand, the family home may be your most valuable asset, so a seller’s market looks like an opportunity for profit. In addition, you’d also reduce your monthly costs on taxes, utilities, and maintenance.

On the other hand, if the sale profit exceeds $250,000 (single) or $500,000 (couples), capital gains can consume a sizeable chunk of that profit. With the average cost of nursing home care in the U.S. at $6,700 a month, you need good strategies to make your money last.

Hold On

Holding on to your home as an investment property may allow you to generate positive cash flow and at the same time leave your family a valuable nest egg. When real estate is inherited, the taxable gains are erased on inheritance.

Cash Out

Another option is to put your equity to work via a cash-out refi and use the proceeds to make age-in-place improvements if you plan to stay or to acquire a smaller or easier-to-upkeep second home while leasing out your family home to cover the mortgage. With low rates and climbing property values, this can be a win-win move.


According to AARP, 77% of seniors would prefer to stay in their current home, and according to NAR, they are. Pundits predict this trend is likely to continue due to improvements in health care, technology, and community services that make aging in place easier. For some, liberating equity to make high-demand Age-In-Place improvements could be the best investment from the standpoint of ROI and intangibles. So, the best Sensei Downsizer Move might be to not move at all! You can only know if you start planning.

Get Started

The Jonathan Arnold Team at Guild Mortgage Grand Rapids can help you PREPARE to win!

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