Your Home and Your Retirement (Part 1)

by The Real Estate Faction on March 2, 2011

1Your Home and Your RetirementUnlike earlier generations of retirees, who paid off first mortgages and retired at the family homestead, today’s Baby Boomers are looking to capitalize on home equity to enhance their retirement savings. Popular strategies for tapping home equity include downsizing to a smaller house or condominium, relocating to an area where the cost of living is more affordable, and taking out a reverse mortgage.

Regardless of which strategy you choose, it’s important to be realistic about what your house may be worth when you retire. Although housing prices have escalated considerably during the past few years, a variety of factors may cause them to level off or decline at some point in the future. Home equity may add value to a diversified portfolio, but relying too much on your house to fund your retirement could work against you if the real estate market in your area cools considerably.

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