Retirement: what to do with the home

Yearly spending other than housing. In today’s dollars; it rises with inflation.

Yearly income: Social Security, pensions. In today’s dollars; it rises with inflation. Counted as your other income for the tax on a sale and for itemizing.

If that income is Social Security. The 2026 Trustees Report. The cut counts only in the years from 2033. Choose No cut for a pension.

Share of that income from Social Security. 100 if all of it is Social Security. Only this share is cut; the rest, such as a pension, is not.

Home value today. The typical US home: US$396,800 (National Association of Realtors, January 2026, all existing homes).

Mortgage still owed. Enter 0 if it is paid off.

State. Sets the property tax (that state’s median rate, Census 2024; 0.9% with no state) and the state tax on a sale.

What you paid, plus major improvements (your tax basis). Used for the tax on a sale (options 4 and 5).

Filing. The tax-free gain on a main home is US$250,000 single, US$500,000 married filing jointly (IRS Publication 523).

Rent for your home, compared with the national average. The national average rent for a home of this value is 5.93% of its value a year (Zillow typical rent, July 2026, over the typical price). Raise or lower it for your home and area. Used for renting in the US and for renting your home out.

Rent a month abroad. Rises with inflation. Use the country pages for the place you have in mind.

Reverse mortgage expected rate. The 10-year Treasury (5.27% on October 6, 2026) plus the lender’s margin. It sets how much HUD lets you borrow and how fast the loan grows.

Other closing costs on a reverse mortgage. Appraisal US$300 to US$900, counseling US$125 to US$250 and other third-party costs US$1,500 to US$4,000 (Finance of America, September 2026). Lenders give the exact figure.

Inflation a year. The site’s figure (3.4%, the latest official reading, refreshed monthly). The workbook’s was 2.5%.

What savings earn a year, after tax. Before inflation. One steady return every year, not past years.

Manage a rented-out home yourself?. Yes removes the manager’s and tenant-finding fees.

Vacancy, share of the year. US rental vacancy 7.3% (Census Bureau, second quarter 2026).

Manager’s fee, share of rent collected. US average 8.49% (iPropertyManagement, 2026).

Fee to find a tenant, share of one month’s rent. US average 70.6% (Rapid Eye Inspections).

Years each tenant stays. About 3: in the Census Bureau’s 2023 figures 25.6% of renters had been in their home under a year, 40.8% one to four years, 17.0% five to nine and 16.6% ten or more (as reported by Redfin and TurboTenant). That counts time lived there so far.

Tax return. Counts the income tax saved by deducting mortgage interest and property tax while you live in a home you own (2026 federal rules). Off unless you turn it on.

Wealth with home equity, in today’s dollars. Savings plus the home’s value after selling costs, less any mortgage or reverse mortgage owed (a reverse mortgage is never owed beyond the home’s value). A negative figure is a shortfall carried forward without interest. Each year’s spending and housing costs come out at the start of the year; mortgage payments and reverse mortgage payments come monthly through the year, each earning the return until paid.

The six ways side by side. Rent in the US: US$1,962 a month, rising 3.5% a year, plus renter’s insurance. Selling costs 6%; no tax on the sale at these numbers. Housing cost abroad is the rent you entered, raised with inflation; the home rented out pays the mortgage, tax, insurance and upkeep from the rent after vacancy and fees.

Wealth with home equity at 100. In today’s dollars, with a steady return of 6% a year. A way whose savings run short is drawn with what is left after the shortfall, which can be below zero.

Reverse mortgage. The share you can borrow is HUD’s principal limit factor for the youngest borrower’s age and the expected rate rounded to an eighth of a point (HUD tables for case numbers from October 2, 2017). A lender’s quote may differ: lenders set their own margin, fees and rate. The payment is fixed in today’s dollars of that year, paid for as long as you live in the home, even past 100; the loan is never owed beyond the home’s value. It needs age 62 or older and enough room to pay off the old mortgage and the costs.