Can I use my house to retire early?
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Can I use my house to retire early?
There are several ways that you can plan your early retirement, and using your house as an asset is a good option. You may choose to sell your house to use the equity to fund your retirement, or use it as a rental property to generate regular income to give you an extra income.
With the age of retirement going up, more homeowners are trying to find ways to fund themselves and retire early. There are lots of potential options to do this that you might have considered previously – investments, buy-to-let properties, even living on life savings. But how can you use your house to help you retire? We Buy Any House look into how you can make the most of your assets and enjoy your retirement earlier on in life.
What are the positives of retiring early?
One of the big positives of retiring early is getting more free time for yourself. Whether you want this to travel, spend with family, or branch out and start a new path, this time can be used however you choose, and give you the freedom to change your life.
Depending on your job, retiring early can also be a good way to reduce stress. We all face stressful situations at work, and as you get older this can become more of a problem, so if you’re in a particularly stressful sector, retiring early could get you away from that stress and let you relax more.
Some people who retire early use this time as a chance to pursue a new career. If you have a particular dream that you’ve wanted to follow but weren’t able to previously, retiring from your current role and making a fresh start might appeal to you.
Are there negatives to retiring early?
The main negative of retiring early is that your savings will have to last you longer. Your pension will no longer grow, and your income will likely dramatically change. With a right amount of planning, you can combat this being a big issue, but you should take some time to consider what your income will be and what you can afford before choosing to retire early.
What if I sell my house?
Some homeowners have considered selling their house to fund their retirement rather than continue working into the older years. This will depend on your personal circumstances – if you still have a high percentage of the mortgage to pay off, this probably won’t be the most suitable path for you. However, if you are mortgage-free, you will have plenty of equity that you can use to fund your retirement. You could sell your house and buy something smaller, using the proceeds to live off through your retirement, or some homeowners look at selling and renting through their retirement, giving themselves more flexibility. There are several options here for you, so you can see what would suit you most – but make sure you take into account the way you intend to spend your retirement. If you’re planning to travel, renting somewhere may be a better option than buying a smaller property that would be standing empty regularly. Thinking about your long-term plan will help you make the right decision for you and avoid having to move again later in life when it’s less than ideal.
How do I know if I can afford to retire?
Retiring is a big step, and you should put your research into it before you commit. Spend some time working out your current income and outgoings, and how much this could be reduced by while still leaving you comfortable. You want to make sure that you’re financially independent before you retire, which will mean that you’re –
- Paying off all debt
- Paying off your mortgage in full
- Have a sustainable income that will cover your needs and wants
- Additional money to fund your retirement
- Enough savings to use as a safety net if you need it.
Once you are financially independent, you can make the decision if you’re in a position to retire early. If after you’ve retired, your circumstance changes, you can consider going back to work if you need to. Hopefully, with the correct planning, this won’t be an issue for you, but knowing that there is a backup can often provide comfort.
Should I consider investing to fund my retirement?
Investment can be a great way to fund yourself through your retirement but is not the best choice for everyone. You need to do your research and make sure that you’re confident in what you’re doing. Often, a popular investment opportunity is a buy-to-let property, where you can benefit from the rental income throughout your retirement and have a property management company in place to deal with any problems, leaving you free of the stress. These investments can be a great way to subsidise yourself through your retirement years, but you should spend some time looking into the positives and negatives of buy-to-let properties to make sure that it’s a good step for you.
How can I start saving for my retirement?
The key to early retirement is planning in advance and being prepared. Retiring early can be difficult, but it is not impossible, so giving yourself time to get organised is important. Start saving money as soon as you can, find the best interest rate on a savings account that you can, and look for other ways to boost your income when you retire. This could be through investments, bonds, or even privately renting out your property and using the income from there. You can look at selling your house and using the equity to help you retire early, especially if you’ve paid the mortgage off and your house value has increased. There are lots of steps that you can take, but take some time to decide which will be the best for you.
Alternatively, read how you can make your house an asset when you retire here.
If you are keen to sell your house and start your retirement but don’t want to have to wait the average six months to sell, we’re here to help. We can provide you with a free cash offer, and get you a sale in as little as 7 days. Get in touch with We Buy Any House today to see how we can help you achieve your early retirement today.Back to all articles
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