Ignite FB Tracking PixelAn Option for Funding Your Retirement - Sanders Properties Inc
An Option for Funding Your Retirement

by Sanders Properties Inc 04/14/2019

For many homeowners, your most significant financial asset is the home in which you live. Most assume, like previous generations, that their home will play a large part in their retirement plan. What part? That depends. You could sell your home, move into something smaller and use the excess to fund your retirement plans. If your home is paid off, you might plan to live in it until you die. Even if you don't have a plan, everyone has told you that buying a home is a great investment, so it should work out. Right? Not every home is the best bet for your retirement plans. Read to find out how your property stacks up.

Asset or Liability?

Most people think of their home as an asset. It certainly can be, but if you’re planning on selling it to fund your retirement, keep in mind you’ll need somewhere else to live. If you have a free option, like staying with your kids, that’s great! 100% asset. If you’re going to re-invest a portion of it into a new smaller home, then its maybe 50% asset and 50% liability. That number varies depending on just how much you plan to spend, and realistically how much the market will bear. 

Equity vs. Home Value

Contrary to popular belief, your investment equity isn’t always the same as the home value. If you share ownership with the bank, your actual investment is the home's current market value less what you owe your lender. With the additional fees and taxes, your take away could be substantially less than you thought. This can hurt you when the market no longer supports your previous home value. If your mortgage is higher than you can sell for, you'll end up just losing money.

Reverse Mortgage

Reverse mortgages often are advertised as a way to stay in your house and still have an income during your retirement years. However, much of the time you don't actually receive the entire equity of your home. Lastly, since you're essentially selling your home to your lender, you're giving up ownership of your home. That means your estate and heirs will either have to pay off the mortgage or give up the house. It's always wise to make sure your children or heirs understand that your home is no longer part of their inheritance. 

Location

If this is your forever home, location is the prime feature to consider. This is a double-edged sword though. Leave it too late, and you won’t be able to pay off the property in time for retirement, buy it too early, and your needs could change. The younger generations are prime for moving to new cities and even states, so even if they live nearby now, that could quickly change. You should consider how your body will react to severe or inclement weather (and your ability to handle the maintenance) as you get older. You could end up needing to make a last minute sale. If you can afford an investment property, an alternative is to get a vacation home in the area you want to retire. That way, you can sell your current home for the income and move into your paid-off vacation property in your retirement location. 

Ask your Realtor about the right homes for both your needs right now and those in the future.

About the Author

Author
Sanders Properties Inc
Sanders Properties’ primary business aim is to provide each of you – our customers – with a complete host of personal services that simplify the buying process and ease the tension in buying a home. We do it by insuring all the essential information and all support service for buying a home are right at your fingertips. It’s our unique one stop shopping service, consisting of our seasoned real estate sales agents, who live in the county and know every nuance of every neighborhood; plus a consortium of top flight, cost efficient inspection engineers, legal professionals and mortgage brokers. And, if carpenters, electricians or painters are needed, we got them, too. Whatever you need, it’s here! Personal Service makes all the difference. It’s what makes you a satisfied home buyer. It’s what makes David Sanders the No. 1 Sales Agent in lower Rockland County. SandersHomes.com is synonymous with Rockland County homes, Hudson River homes, luxury homes, Palisades homes, Piermont homes,Grand View homes, Haverstraw homes, South Nyack homes, Nyack homes, Upper Nyack homes, Upper Grandview homes, Snedens Landing homes, Stony Point homes, Tappan homes, Orangetown homes, Clarkstown homes. You just might say, homes are us! Sanders Homes Real Estate is the premier realtor in Nyack NY, offering you complete access to all Rockland County homes for sale. Whether you’re looking for a simple Cape or a Hudson River estate, we can help you find the house that’s right for you. Our experienced, informed sales agents are waiting to open the right doors for you. So, when you need the right Nyack realtor to help you find the right Rockland County home, come to Sanders Homes Real Estate, we’re conveniently located in the heart of Nyack’s business center. Yes, come and discover, first-hand, our hallmarks: Integrity Trust Service Sales SERVING YOU. It’s our greatest privilege