Powwow, LLC was interviewed by CBS MoneyWatch to discuss how home equity can be utilized for retirement. In my years of planning I’ve typically seen the home serve as a saving grace for underfunded retirement or become a great tool for legacy planning.
Jillian Harding highlights three considerations when deciding how to make home equity work for you:
- Reverse Mortgage
Powwow commented the first option, which tends to be the most equitable of the three but can admittedly be an undertaking. “Downsizing to help prepare for retirement is my first recommendation for clients. It encourages clients of any age to live within, if not below, their means, which is the crux of any successful savings plan. In addition, not only can the client utilize the unused equity toward retirement, they can continue to save from surplus within the budget.” For seniors, this can be an emotional and unwanted transition which makes the reverse mortgage more palatable. For boomers, however, the process can be quite exhilarating. It’s an opportunity to purge old, buy new, and keep only what means the most to you. Also, just because your new home may be smaller doesn’t mean it needs to lack style and functionality. While the family home is often designed to accommodate children, your new location should cater to your needs, which includes elder care considerations that allow you to safely prolong your stay.
Read the full story at CBS MoneyWatch.
If you have a parent that’s having a hard time with the idea of transition, consider scheduling a free consultation to discuss how we can work together to create a plan of action.