Sell or Keep Your Home
in Retirement?

It depends on your equity, destination, and priorities. If you have significant equity and are relocating to a lower-cost area, selling almost always wins financially. If you're staying in the same area with a low or paid-off mortgage, keeping the home is often cheaper long-term. Use this calculator to see your specific numbers.

The break-even point is when cumulative renting costs exceed cumulative ownership costs (mortgage + property tax + maintenance). Typically, renting breaks even vs owning within 5-12 years in most US markets — but freed equity invested at 5% significantly changes this. The chart above shows your personal break-even based on your inputs.

Financial advisors generally recommend keeping no more than 20-30% of your net worth in illiquid home equity during retirement. If your home represents 50%+ of your net worth, selling or a reverse mortgage may improve your income situation significantly.

After paying off your mortgage and closing costs (~7% of sale price), remaining equity can be invested conservatively in a balanced portfolio. Our calculator uses a 5% annual return assumption — in line with conservative bond/mixed portfolio returns as of May 2026. This investment income stream often offsets a significant portion of rental costs.

If you've lived in your home for 2+ of the past 5 years, you can exclude up to $250,000 ($500,000 for married couples) of capital gains from your home sale from federal taxes. Most retirees selling a long-held primary residence pay zero capital gains tax. Consult a tax advisor for your specific situation.

No — this is one of the biggest myths in personal finance. Renting in retirement while your equity generates investment income is often the superior financial strategy, especially if you're relocating or if maintenance and property tax costs are high. The "renting is wasting money" framing ignores the opportunity cost of illiquid equity.