Managing Marriage and Money Issues

5. Keep or sell the home? Upsize or downsize?

Making a decision about the home once the kids have moved out is complex for people in their 50s, 60s and beyond because they must grapple with numerous, sometimes competing, goals. They often want to be closer to their kids or grandkids, but not overly close or intrusive. They want cheaper housing, but also wonder whether they should keep a larger home in case relatives visit.

One spouse may favor throwing traditional thinking out the window to refinance the house, pull out equity and buy a second place. "A lot of creative things are being done that never would've been done in the old days, because having your house paid off before you retire is financial planning 101," says Scott Palmer, who with his wife wrote the book First Comes Love, Then Comes Money.

Coming to terms "causes tension for older couples because sometimes the home is one person's security, and for the other person it's an investment," Palmer says.

Reaching a workable solution often requires creativity, and a willingness to take a realistic look at the family budget. It's important to make a list of priorities, itemizing the things a couple must have (like a home in a specific state, little to no mortgage and one guest bedroom) versus the things that are simply nice to have (such as a family room, pool or backyard for the grandchildren).

For those contemplating selling the family home and relocating to another city, it's smart to try out that new town for size first — perhaps by renting for a year — to see whether you really do like the area before buying a home.

Ultimately, resolving these and other tricky money dilemmas is possible, Palmer says. His proof? Last year, his grandparents celebrated their 70th wedding anniversary.

Lynnette Khalfani-Cox, The Money Coach®, is a personal finance expert, a television and radio personality, and a regular contributor to AARP. You can follow her on Twitter and on Facebook.

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