Homeowners considering using home equity as a valuable asset in their retirement plan can analyze it like other investments, also taking into consideration the impact of historical housing price volatility and adjustable interest rates.
In my Kiplinger articles about how to build a better retirement plan, I often point out that homeowners who include home equity as an asset in their retirement plan can meet more of their retirement objectives.
The number of retirees who take advantage of a home equity conversion mortgage (HECM), however, has never equaled retirement experts’ expectations.
It’s not the design or pricing of the product, but rather, in my view, the limitations on how the performance of a HECM is presented and the challenges of integrating a HECM into a broader retirement plan.
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