Many people struggle to set aside money for retirement, and understandably so. Life just plain has a way of being expensive. That especially holds true these days thanks to inflation.

If you've yet to put much or any money into an IRA or 401(k) plan for retirement, you may be getting increasingly stressed about it by the day -- particularly if you're already well into your career. Without savings, you might really struggle as a retiree -- especially if Social Security benefits wind up being slashed down the line.

Now you may have tried to rework your budget to come up with a way to fund your IRA or 401(k), only to come up short. But if you own a home, you might have a prime opportunity to kick-start your nest egg and make up for all of that lost time.

A house with a for sale sign in front.

Image source: Getty Images.

When you stand to walk away with a huge profit

Although higher mortgage rates have cooled off the housing market in recent months, the demand for homes is generally still pretty strong. And now's actually a good time to be selling a home for one big reason -- a glaring lack of inventory on a national scale.

The National Association of Realtors reported that as of late March, there was only a 2.6-month supply of homes at the current monthly sales pace. For context, it commonly takes a six-month supply of homes to meet buyer demand in full.

Because there's not a lot of competition on the housing market and property values are still pretty high, it's a good time to list your home and downsize. If you walk away with a nice profit by doing so, it could take the place of all of those missing contributions to your nest egg.

So, let's say you're able to sell your home for $1.2 million and walk away with a $500,000 profit. Let's also assume you're able to downsize to a $400,000 condo you can buy outright so you don't have to take out a new mortgage at today's rates. That leaves you with $100,000 to work with.

Now, let's assume you're 20 years away from retirement. If you manage to invest that $100,000 at an average annual 8% return, which is a bit below the stock market's average, you'd end up with $466,000 in two decades' time. That's a decent amount of money to bring with you into retirement.

An option worth considering

If you're able to tweak your budget to allow for consistent IRA or 401(k) plan contributions, then you may not even need to think about going to the extreme of selling your home, downsizing, and using your profit as your nest egg. But if that's just not in the cards and you have an opportunity to walk away with a large profit, then selling your home and moving to a much less expensive one could be the one thing that allows you to build a retirement nest egg and avoid worlds of financial stress once your career comes to an end.