Here’s a synopsis of an informative article by Nancy L. Anderson, a Senior Financial Planner with Key Private Bank, that recently appeared in Forbes; 7 Ways To Use Your Home Equity For Retirement Income.
I am a late starter to retirement planning. Should I count my house or the equity in my house as an asset in my retirement plan?
If you are playing catch-up on your retirement planning, you need to maximize every asset you have to make retirement a reality.
In general, financial planners don’t count the equity in your home when constructing a retirement income plan. Practically speaking, you need a place to live! So financial planners count it as a personal asset, even though it’s a large part of your net worth.
Late starters to retirement planning need to think differently. Your home can be leveraged to help enhance your retirement plan.
How can I turn home equity into retirement income?:
- When you retire, you can downsize and invest the proceeds.
- Sell your house and move to an inexpensive place.
- Sell your house and move abroad.
- Sell your home, invest the proceeds, and live for reduced rent.
- Sell your house and move in with your kids.
- Rent out space.
- Stay in your home and take out a reverse mortgage to tap into your equity.
For much more on each of these strategies, check out the complete source article here.