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3: Analyze Your Decisions

Using Your Home’s Equity

retirement planning home equity

General Guidelines

  • Housing prices fluctuate, so don’t depend on it for your retirement savings.
  • If possible, pay off your mortgage before you retire.
  • Create other retirement savings and plans so you do not need to use your home’s equity for living expenses.
  • Evaluate reverse mortgages and home equity loans carefully to understand charges, fees and payment schedules fully.
  • Seek advice from a qualified financial planner before using your home as a source of income for retirement.

According to the Consumer Financial Protection Bureau, older homeowners with a mortgage spent about $1,200 a month on housing. Homeowners with no mortgage spent about $400. If you have a mortgage when you enter retirement, where will you find the additional $800 per month?

Your home is your castle, your sanctuary, where you raise your family and where you make memories for a lifetime. But the costs of homeownership needs to be weighed against the benefits as you enter retirement. Retirement can mean downsizing, moving to a rental property or even using your home as a source of income.

Your housing decisions can affect your income stream in retirement, so you need a plan.

check the facts

Reliable Resources


What Are Your Beliefs About Homeownership?

When you think about your home, what beliefs do you bring with you?

  • How important is it to you and your family that you own your home?
  • Who will maintain your home as you age? How will you pay for it?
  • What or who would affect your decision to stay in your home?
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