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.

Question:

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.

Question:

How can I turn home equity into retirement income?:

  1. When you retire, you can downsize and invest the proceeds.
  2. Sell your house and move to an inexpensive place.
  3. Sell your house and move abroad.
  4. Sell your home, invest the proceeds, and live for reduced rent.
  5. Sell your house and move in with your kids.
  6. Rent out space.
  7. 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.