I'm 50 and my home is worth $5 million. Can I retire now?

Portrait of an affluent mature couple standing in front of their home, a grand mansion. The woman is holding a cute pampered little dog in her arms while her husband stands beside her with his arm around her. They are smiling at the camera.

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published 23 April 2025

Question: I'm 50 and my home is worth $5 million. Can I retire now?

Answer: It depends on several factors. For many Americans, home equity is a major source of wealth, a huge contributor to net worth and a key component of their retirement planning strategy. Because home values have risen in recent years, many Americans have seen their net worth increase.

The average U.S. home value is currently about $361,000, according to Zillow. But in your case, if you’re sitting on a home worth $5 million at 50 years old, you may or may not be in strong shape for retirement. The math boils down to what your home is costing you, the amount of equity you have, and how you’re doing on actual long-term savings. Let’s dig in.

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Extracting equity from a home

A $5 million home might seem like a valuable asset on paper. But a $5 million home does not necessarily mean you have $5 million worth of equity.

ICE Mortgage Monitor reported late last year that the average homeowner with a mortgage has $319,000 of equity in their home, $207,000 of which is tappable. With a $5 million home, there’s clearly the potential to have a lot more equity than that. But the question is, how easy is it to access, and what are the costs?

Homeowners can tap into their home equity in several ways, including home equity loans, HELOCs and cash-out refinances. Later in life, reverse mortgages can become an option.

But at the end of the day, all of these avenues ultimately mean borrowing money in some form. Extracting home equity without taking on more debt typically requires a home with equity to be sold. And that may or may not be desirable to you.

Michael Micheletti, chief communications officer at home equity agreement provider Unlock Technologies, says that for someone who has accumulated significant equity in their home, using it can be a major asset in retirement planning. And that often involves downsizing.

To downsize or not to downsize?

Not everyone wants to downsize. A recent AARP report found that 75% of Americans ages 50 and older want to age in their current homes rather than relocate or move to a smaller space.

Jeff Adams, real estate investing strategist at Home Investors Zone, says that as homeowners approach retirement age, the decision to stay in a home versus downsizing can be complex.

“A large home requires maintenance, and these costs are now dramatically increasing. However, selling to buy a smaller home in a market with rising home prices and higher interest rates isn’t always to the seller’s advantage,” he explains.

Is your home impeding your retirement savings?

A $5 million home at age 50 may be a valuable asset — or an expense that’s getting in the way of your ability to save for retirement.

The Wall Street Journal recently reported that Americans have accumulated $35 trillion of wealth in their homes. Yet many people feel less well off due to factors such as rising property taxes, insurance rates, and maintenance expenses.

If you’re 50 with a $5 million home and a $300,000 nest egg, you’re not in nearly the same strong position as someone who’s 50 with a $5 million home and $3 million socked away for retirement. And if you’re spending so much of your disposable income on housing costs that your nest egg is being neglected, you’re not necessarily doing your future self any favors.

Of course, if you’re 50 with limited savings and a $5 million home, you probably have more options than someone who’s 50 with, say, a $500,000 home. But having your home itself serve as your retirement nest egg may not be the clean solution you expect, even if you have no problem with the idea of downsizing in a decade or so.

For one thing, home values can fluctuate. Sellers today continue to benefit from a general lack of inventory. But we don’t know what home values will look like 10 years from now.

There are also costs to selling a home that could eat into your profits, from real estate agent commissions to transfer taxes to capital gains taxes. The capital gains tax exclusion is worth up to $250,000 for single homeowners or $500,000 for married folks filing jointly. If you’re looking at a $2 million gain after unloading your $5 million home, you’re not going to walk away with that money free and clear.

The verdict: should you sell your lovely home?

If you’re 50 with a $5 million home, it may be that you’re a high enough earner that you’re able to both afford an expensive property and regularly contribute to a retirement account. But if the latter is being neglected, it may be time to downsize sooner rather than later. That way, you can focus on building the savings you’ll need to cover your costs once your time in the workforce comes to an end.

Finally, carefully consider if you want to retire at 50 or even 55. Will you be lonely if your friends are at work? How will you spend your time? There are many issues to work through when you decide to retire early.

Maurie Backman is a freelance contributor to Kiplinger. She has over a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. She has written for USA Today, U.S. News & World Report, and Bankrate. She studied creative writing and finance at Binghamton University and merged the two disciplines to help empower consumers to make smart financial planning decisions.