The National Association of Realtors, too, says the median age of home sellers has risen to 54 from 46 since 2009, an indication that empty nesters who were waiting for a housing-market recovery are starting to list their properties.
Of course, planting a for-sale sign in the yard raises the question, “Where to next?” And for baby boomers—especially those with oversize houses and inadequate savings—it is a decision that could have a major impact on how they fare financially in retirement, some experts say.
Although investors have been told for years not to think of their primary homes as investments, having a healthy chunk of home equity can make a big difference when it comes to planning retirement finances.
“If retirement savings present the risk of a shortfall, one of the best things you can do is liquidate real-estate assets,” says Christine Benz, director of personal finance at Morningstar Inc. “That’s more palatable than hearing you need to keep working until you’re 72.”
Andrew Carle, executive in residence at the Senior Housing Administration program at George Mason University and a senior housing researcher, says it is important for older consumers to consider their needs not just for the next few decades, but for the final one-third of retirement.
“We know that the boomers haven’t saved enough for retirement,” Mr. Carle says. “What they do have is equity in their homes; but do they know how to spend it? Most of them haven’t thought about the last five to seven years of their retirement, which will be the most expensive.”
Those who opt to rent, Mr. Carle cautions, must be careful not to “fritter away” the cash they unlock through a home sale and instead try to preserve it for future income or medical costs.
Continue reading: Realtor.com