Housing is a really important topic for a lot of retirees because, for many of us, it’s the biggest asset we’ll ever own or manage. We want to get that part of our financial equation correct, so it’s no surprise it takes up a nice slice of the retirement planning conversation. On this episode, we’ll cover some common housing questions from retirees and hopefully hit on an issue that might also be on your mind.
For many of us, your home is the largest asset you’ll own, so you want to get it right. Is your home where you live or an investment? David talks through some common questions people have when it comes to owning a home.
Currently, interest rates are low, albeit beginning to trend upward. If you’re locked in at a lower rate, should you attempt to pay off your mortgage quicker? David is not generally concerned when his clients have a mortgage payment. The interest of an older mortgage is a smaller portion of the amount you pay, so there is not a significant reason to pay it off early. Every situation is different though, so consider what is right for you.
Should you downsize in retirement? After years in a big house with your family, once your kids have moved out you might feel inclined toward a smaller home to live in and care for. Remember that downsizing is different than “right-sizing.” You could easily spend the same amount of money for a smaller house that you’d get for your current larger house, which isn’t really downsizing. Finding a smaller house might be right for you, but it’s not always a savings financially depending on what you buy.
Is it a good idea to use a home equity line of credit? David says in a lot of instances, a HELOC is perfectly fine, say when using it as an emergency fund. Don’t use it though like a credit card! Make sure you understand the fees and terms of borrowing under those agreements.
Considering signing over your home to your kids? Some choose to move their assets to their heirs so that Medicaid cannot get to it if needed. Medicaid has a five-year look-back though. Your home is a protected asset if you have a spouse living there, but be careful about trying to shuffle your assets around. What complications could your house create when it comes to your estate plan?
Finally, is there ever a good reason for a reverse mortgage? David explains how a reverse mortgage works and why people choose to have them or avoid them.
If you ever want your question spotlighted on the show or to ask David something about your retirement, email him at [email protected]
Listen to the entire episode or skip ahead using the timestamps below to skip to a particular question.
0:36 - How is David celebrating his upcoming birthday?
2:47 - Let’s talk about your home.
4:30 - Interest rates are low(er) right now.
7:58 - Is it wise to downsize?
11:02 - Should you get a home equity line of credit?
14:25 - Is it a good idea to sign over your home to an heir?
17:30 - How is your home set up within an estate plan?
19:54
- Are reverse mortgages a good idea?
“If you don’t have a beneficiary designation on file at the county where the deed to your property is located--somebody has to gain title to that house before it can be distributed to your heirs & that’s going to happen in probate court. "
– David Dickens
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CONTACT US
OUR LOCATION
10975 Grandview Drive
Building 27, Suite 190
Overland Park, KS 66210
Get Directions
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