A recent study shows a rise in home sales by baby boomers, who are retiring in droves.  Why the rise in home sales isn't entirely clear.  Perhaps a more pressing question is whether selling a home is a smart or dangerous maneuver for retirees. 

"[It] depends on a variety of factors," says Robert Klein, Retirement Healthcare Advisor in White Plains, N.Y.  "Can you handle the home upkeep?  Lawns don't mow themselves. Snow doesn't shovel itself.  [But] you might want to raise cash for future long-term care needs.  You may want the cash for independent living."

In truth, whether or not to sell in retirement may not be a financial decision at all.  "It's a question of lifestyle as well as money," says Judith McGee, co-branch manager for Raymond James Financial Services and CEO of McGee Wealth Management, a Portland, Ore.-based independent firm recently dubbed one of America's top 200 wealth advisors for 2016 by Forbes.  "Owning a home in later years can be very stressful—something’s always in need of repair, cleaning, or maintenance.  It can be a responsibility that a widow, for example, might not want." 

Besides, she adds, there are many more-convenient alternatives nowadays.  Retirement communities of all sizes and price points—rentals and buy-ins—can provide meal preparation, housekeeping, social activities, even long-term care and medical assistance.  In fact, for many senior citizens the option of NOT selling their homes and moving someplace more accommodating can be "the wrong decision," she says, for reasons financial, social, and safety-related.

Financially speaking, McGee points out that a large family home probably incurs high taxes and maintenance costs that a smaller property wouldn't.  "Downsizing can be a relief, especially if the new home is on one level and easily cared for," she says.  Yet she acknowledges that "some people are reluctant to leave a home that has personal history for them." 

Besides simply scaling down their living space now that the kids have moved out, many baby boomers are no doubt taking advantage of rising real estate values to raise cash to help fund their retirements.  Financial advisors can help them make sure they use those extra funds wisely.  "I'm a huge fan of using the equity for long-term care and to pay off any other debt," says Klein.

Needless to say, careful budgeting and asset allocation should always apply to whatever funds come from selling real estate.  "Review all cash-flow needs [and] keep enough cash or cash equivalents in reserve to pay for any emergencies," says McGee, who advises holding onto enough cash to last two years if necessary.  "After that, make sure the portfolio is liquid and is managed on a risk-adjusted basis.  Older people don't have time to make up losses, and high volatility can be very scary," she says.

Still, if a retiree insists on staying in a long-held home, there are options for boosting cash flow.  One is the reverse mortgage.  "A reverse mortgage works in cases where there may be few options to afford the home, [but it] is often a trap for those who think there's some kind of free lunch," says McGee.  With a reverse mortgage, the retiree can access cash by relinquishing ownership of the home, but remains responsible for its upkeep, repairs, and property taxes.  "I’ve seen a few cases where a reverse mortgage does work for a couple who were able to use it to reduce their overhead and thus slow down their distributions from their invested assets.  They were going to run out of money otherwise," says McGee.  "But I've also seen a case where a grandson milked the reverse mortgage money from his grandparents, leaving them without funds and nowhere else to turn."

Another option is to take in boarders--"if you can screen them," notes Klein.  "Maybe another retiree you trust or a college student."

In addition to providing companionship, such renters might help with household chores.  But there's always a risk involved having strangers stay in your home.  It's a good idea for clients to have someone with them when interviewing possible tenants, and to get references or at least do some degree of background check.