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Sell home to fund early retirement?

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I have not seen the below as a strategy and I am hoping for feedback and advice please.

54 now.  Sell house in 3 years; net about $400K to live off of and slow travel for a couple years until I’m 59 ½.  Figure expenses to be about $60K/yr including travel health insurance and/or subsidized ACA since income will be very low…probably just roth conversions.  At 59 ½ will have 25X annual expenses plus around $350K cash.

Does this sound like a sound strategy?  I have searched, but haven’t found “selling your home to fund your early retirement” as a strategy.  Barely early I guess at 57 lol.

Hi Paul

I think the best way to think about this is as 2 separate but important questions -

1 - do I want to live in this house?
2 - what about the money?

If the answer to 1 is definitely no, then sell. If not, then see if it makes financial sense to keep it.

For 2, you don't need to wait until age 59.5 to access retirement funds -
- it's only 2 years, can you save enough cash to fund 2 years (combined with renting out primary home?)
- google "rule of 55" - you can possibly access your 401k funds at age 55 with no penalty
- google "SEPP" - you can setup a small separate IRA to withdraw funds from without penalty, it just requires a small bit of math and planning
- pay the 10% penalty for 2 years - costs $1k to get $10k out of the IRA, but maybe cheaper than the tax you avoid now

Thank you for the advice.  Definitely plan to sell and move out of San Diego...and California!

San Diego is really nice.

What is your thinking for moving elsewhere? We have actually considered moving to California but still trying to figure it all out. Thanks!

I have read conflicting articles on whether California is a good state to retire in regard to taxes.  As we will be traveling a lot and for at least two years full time, I thought setting up residency in say Nevada while I have no income and am doing Roth conversions would be a good idea...?

Also, Carlsbad (just north of San Diego) is very expensive.  I love it here and the fact I can walk to the beach in a few minutes.  But, I've downsized about as much as I can and we are now in a 2 bed condo that was $600K.  I guess we could sell and travel for awhile and then come back and rent, but housing would always be a huge percentage of our budget.

I have a lot to think through.


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