As a homeowner, your house is likely your biggest asset.
It can help you build wealth and improve your finances — and in retirement, it might serve as a much-needed source of financial support.
That last part is important. Whether you’re 25 or 55, having a plan is critical to an enjoyable and worry-free retirement.
Want to know how your home can help you plan for your golden years? Here are four ways it can factor in:
- You can leverage your home equity. Most homeowners are sitting on serious amounts of equity right now. You can tap into that by taking out a home equity loan or home equity line of credit (HELOC). In retirement, these can be great options for covering medical bills, paying off higher-interest debts, or funding home improvements.
- You can sell and use the profits. Many retirees choose to sell their homes and downsize to a smaller property. If you decide to take this route, you can use the sale proceeds to support your retirement — plus, you’ll enjoy a smaller home that’s easier to maintain.
- You can refinance. Refinancing could help in a couple of ways: A regular refinance may help you reduce your monthly payment and create liquidity. But if you opt for a cash-out refinance, it could also give you funds to use toward your retirement goals.
- You can rent out your home. Your house can become a source of regular income in retirement if you rent out a room or the whole home for short- or long-term tenants. Get in touch to learn about local laws and restrictions.
A home can be a valuable financial asset at any life stage. Are you interested in buying a new property?