Should I Sell My House to Fund Retirement?

For many homeowners, particularly those in markets where home values have appreciated significantly, the equity in their primary residence represents one of their largest assets. Homeowners aged 62 and older were sitting on a record $14.66 trillion in total housing wealth as of the third quarter of 2025, according to the National Reverse Mortgage Lenders Association. Selling and downsizing can free up a large lump sum that can be invested to generate retirement income, reduce housing costs, and simplify daily life. The federal tax exclusion on home sale gains allows single filers to exclude up to $250,000 in capital gains and married filers up to $500,000, provided they have lived in the home for at least two of the past five years, making a sale potentially very tax-efficient. The proceeds from a home sale can be invested, used to purchase a smaller home outright eliminating housing payments, or strategically combined with other income sources. The right decision depends on your attachment to your home, your local real estate market, your income needs, and your plans for where to live in retirement.

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Should I Sell My House to Fund Retirement?

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