How to Use Your Home Equity to Boost Retirement Income

How to Use Your Home Equity to Boost Retirement Income

How to Use Your Home Equity to Boost Retirement Income

If you’ve lived in your home for many years, or you live in an area that’s experienced a surge in home values then you most likely have a substantial amount of equity built up in your home. Home equity is good to have no matter how you use it. And it definitely beats the alternative: that is being underwater on your mortgage. In any case, having home equity is a good place to be. You can use that equity in numerous ways, including for retirement. In fact, if you’re behind at all in your retirement savings, your home equity could help you catch up.

Tax-Free Gains
For starters, you can cash in on the equity in your home and actually get the profit tax-free. Here’s how it works. Under IRS Tax Topic 701, you can exclude up to $500,000 in gains from the sale of your home from your income taxes. All it requires is that you own the home and you’ve lived there for at least two out of the last five years. That’s a nice tax-free gain.

Turning Home EquityInto Income for Retirement

So how do you turn that home equity into retirement income? There are several ways to do it. Here’s how.

1. Downsize when you retire and invest the gains – one of the most obvious ways is to sell your home when you retire and then use the equity to invest in other things. You can purchase a smaller home and likely pay less in taxes and expenses. Then use the rest of the money to invest in the stock market.

2. Sell your home and live somewhere inexpensive – you could also sell your home and then move somewhere where the cost of living is cheaper. Choose a low-tax state and also consider locations where things are generally cheaper. If your monthly expenses are low you might be able to live off the equity of your home sale.

3. Sell your home and move out of the country – of course, you could go really inexpensive and move somewhere out of the country, where the cost of living is even cheaper. There are drawbacks to this, especially if you have family, but it is another option.

4. Move in with your kids – your kids might not like the idea, but if they’re open to the idea, you could sell your home and move in with them. They might enjoy having you there to help with the grandkids, and you get to see those grandkids daily.

5. Stay where you are and do a reverse mortgage – lastly, you could try a reverse mortgage. This allows you to use your home equity, either as a line of creditor lump sum, while you maintain ownership of your home. You could then use that money to help supplement the rest of your retirement income.

There’s Still Time to Save
If you’re behind in the game when it comes to retirement savings and you own a home, the equity you have could be a game changer. You can claim up to $500,000 ($250,000 for single filer) as tax-free income and it could be enough to last you through the golden years.


We hope you found this article about “How to Use Your Home Equity to Boost Retirement Income” helpful.  If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page  or our website at  Unfortunately, we no longer give advice to other tax professionals gratis.

To receive our free newsletter, contact us here.

Subscribe to our YouTube Channel for more updates.

Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio is a proud sponsor of The American Dreams Show.



The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:

Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

Untitled_Artwork copy 4 (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.

Our mission at is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.

Posted in
Lee Brower

Empowering Leaders of Family Businesses

Transcript: Alan Olsen Welcome to American Dreams. My guest today is Lee Brower. Lee, welcome to today’s show.   Lee Brower Alan, I’m delighted to be here. Thank you for having me.   Alan Olsen Oh, I’m excited for this session night ugly. I’ve sat in classes with you. Management Consulting techniques, strategic planning. And…

Redefining Social Responsibility In The Financial Industry: Our Conversation With David Reiling

See David’s Recent Interview with Alan Olsen: David Reiling is an accomplished social entrepreneur and innovator in the field of community development finance and financial inclusion. He has been the Chief Executive Officer of Sunrise Banks since 1995, and since then, he has successfully transformed Sunrise Banks into a leading player in the industry,…

David Reiling

Banking As A Social Entrepreneur

Transcript: Alan Olsen Welcome to American Dreams. My guest this week is David Reiling. David, welcome to today’s show.   David Reiling Thanks, Alan. Great to be here.   Alan Olsen So David, you have a very unique background. You know, tell us a little bit about the, the picture your your background in, you…

The Economic Influence of the NBA All-Star Weekend

NBA All-Star Weekend Economic Influence

Written by Ryan Hickman   If you have walked around downtown Salt Lake City recently, you’d come across ginormous signs advertising the NBA. But not just advertisements for the local Utah Jazz, but for the annual pinnacle of NBA events: the 2023 All-Star Game. This annual event envelopes whichever city hosts the events, which include…