Today's Hack

Let’s talk about the house today! We are going to explore some common retiree questions we get about housing. Should you downsize? Should you use equity as an emergency fund? Find out on today's show.

On today’s episode, we’re going to be answering some common housing questions we often get from retirees. In the past few years, the market has been moving fast. But will rising interest rates cool the market down and what could this mean for retirees?

Housing comes up in every plan we create. Do you want to downsize, move to another state, or pay off the mortgage or not? These are all questions most retirees ponder and there are a lot of factors we need to consider when it comes to your biggest asset.

With interest rates still relatively low, should you be paying off your mortgage as quickly as possible or pay as little as possible?

The general rule of thumb has always been to pay the house off before you retire.

But this isn’t the best decision for everyone. Without a house payment, you have less income, but on the other hand, the amount of equity in the home doesn’t grow. In a low-interest environment, with an affordable mortgage, it may not be worth paying it off as soon as possible.

If you had a big house to raise your family, you may be wondering if now is the time to downsize.

But with the current market we’re in you may end up paying more for a smaller house. You can downsize, but you’ll want to be careful when it comes to a new property tax cap.

Should you pull out equity on your home for big purchases in retirement?

A line of credit or equity loan on your home is a good emergency fund. Although, you’ll want to calculate your circumstances and see what fits your plan best. If you have a home equity loan you only pay if you use it. It makes it easier to manage your emergency money instead of sitting in the bank and collecting dust.

Join us today as we explore these common housing questions and how your home plays into your overall retirement plan!

Listen to the entire episode or skip ahead using the timestamps below. 

[0:44] Do we get questions about housing?

[1:41] Should you pay off the house?

[4:49] Should you downsize?

[8:17] Should you pull out equity?

[11:10] Signing the house over to the kids

[13:42] Is a reverse mortgage a good idea?

A Quotable Moment:

“You can downsize in size but you’re probably not downsizing much in cost. But the real trick is going to be property taxes.”

-Phil Putney

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