Most people plan for retirement in traditional ways, such as contributing to retirement accounts, saving some of each paycheck or investing in the stock market. While these methods are considered safe, jobs can be lost unexpectedly, savings can be wiped out by an unexpected emergency and stocks can lose their value overnight. If you are working out your plan for retirement and own your own home, using it as part of your savings for retirement can be a very wise move. 

The Empty Nest Conundrum

Most people purchase their homes during the years when their families are growing and they have a need for space and stability. In most cases, the family home will be at least three to four bedrooms, often with additional living areas, such as family rooms, rec rooms or finished basements. When the kids are grown and the nest becomes empty, the parents find themselves with more space than they need and often sell the family home to downsize many years before retiring. Instead of doing this, parents who can comfortably afford to stay in the larger home can reap the benefits of the increasing value of the home over the next decade or two and sell the home when they are actually ready to retire.

It is important, however, to consider the following before making a decision to downsize when the children are grown, or hold the family home as an investment until retirement. 


Just as location is important when purchasing a home, it can also help homeowners determine when the best time will be to sell the home. Consider these questions:

  • Is the area expanding, with employment opportunities and good schools that will make buyers want to purchase a home there in the next decade or two? 
  • Has the neighborhood become more commercial and less residential during the years since the home was originally purchased and is this change causing home values to move up or down?
  • Has the zoning laws changed for the area, or are there plans to change them in the over the next decade or two?

Helpful Tip: Consider contacting your local planning and zoning department and ask for information about community development plans for your area, zoning change requests and any long range studies they may be conducting for the area to determine future population density, and infrastructure changes that could make your home more or less valuable when you decide to sell. City council meetings are usually open to the public and can be a great way to get clues about coming changes that may affect future property values in your area.

Cost Considerations

If the location considerations for the home seem positive, the next thing to consider is the cost of staying in the home while it gains value as an investment savings vehicle for your family. Here are some factors to consider:

  • Is the home structurally sound and generally well-maintained?
  • Are you physically healthy enough to handle the everyday care of a large home?
  • Has it been periodically updated to keep it attractive and competitive with other homes in the area? 
  • Are the utility bills, taxes and insurance premiums affordable? 
  • How much equity do you have in the home and will it be paid for before you are ready to retire?
  • Are there any second mortgages, tax liens or other costly issues or expensive repairs that need to be addressed?

Helpful Tip: Homeowners who have been in their homes for years while raising their families may not be aware of the actual market value of their home. Consider contacting a reputable, experienced listing agent to view your home and prepare a thorough comparative market analysis, or CMA. This will provide you with actual listed and sold prices of similar homes in your area, as well as market information, trends and statistics that can help your determine whether you should sell your home now or let it gain in value until your retirement.