How should you approach your home from a financial standpoint in retirement? Pay it off? Downsize? Rent it out? Let’s talk about real estate and how it fits into your plan.
Click the timestamps below to jump ahead in the episode…
Other Retirement Facts:
Is your home a part of your financial strategy? How does it fit in your plan and how should you approach what to do with it in retirement? On today’s podcast, we talk through several common options people consider when it comes to their home.
Should you pay off your house as soon as possible or should you just pay it off slowly? Phil doesn’t consider a house as really an investment but a place to live. Instead ask, what does it cost me to live there? Consider also the difference between the value of the home vs. the equity. If a need comes up, having liquid assets is much easier to access than equity in a home. So, it doesn’t always make sense to pay off the house sooner.
What may cause a person to want to downsize their home? From a financial standpoint to a physical standpoint, there may be benefits to a downsize. But what do you need to know about property taxes?
Are rental properties a good investment strategy? Rental properties can be very difficult to keep up. Understand that it’s not liquid, and that it’s not a passive form of income. Do you want to always have something to do? What happens if you get a bad tenant?
What kind of issues and mistakes do people make when it comes to estate planning? What happens with a rental property if you pass away? Have you determined how your home or second home will pass down to beneficiaries? Planning ahead of time can save everyone a lot of trouble down the line.
Listen to the entire episode or click on the timestamps below to skip ahead to a specific segment.
0:37 – Paying off the house as quick as you can or enjoy low rates and pay it off slowly?
1:47 – What is equity in a home vs. the value of a home?
3:16 – Why would you want a mortgage with additional liquid assets?
4:36 – There are two rules that apply to any decision.
5:17 – Should you downsize?
7:51 – Are rental properties a good investment?
11:09 – What are some estate and legacy planning mistakes that people make?
Thanks for listening! We’ll be back with another episode next week.
A Quotable Moment:
“Your equity in a home doesn’t grow in value. You have to separate the value of the home from the equity.“