Including your housing wealth in your retirement plan, such as by using a HECM, can lead to higher lifetime income and a significantly larger legacy than a plan based on selling your home to access the cash.
Editor’s note: This is the third article in a five-part series about all-asset retirement planning that is covering such topics as using annuities and housing wealth, making the most of tax benefits and managing investment portfolio risk. Articles one and two are It’s Time to Redefine Retirement for Retirees With $500,000 to $5 Million: Here’s How and Unlock Housing Wealth and Tax Benefits by Adding Lifetime Annuities to Your Retirement Plan.
For most Baby Boomers, their home represents 50% of their net worth, yet retirement planning software and advisers virtually ignore this asset in designing retirement income plans.
A Federal Reserve study shows that the share of net worth in primary residences among households headed by people ages 60 to 69 rose from roughly 40% in 1989 to just over 50% by 2022.
