The Setup:

Clients often ask us about their house (or houses) and how they fit into retirement plans. From downsizing to rental properties to interest rates, let’s explore some of the top retirement questions as it relates to all things housing.

Click the timestamps below to skip to a specific topic in the episode.

The Combination and Key Points: 

A home is usually your biggest asset, so it makes sense that clients have a lot of questions about how housing fits into retirement plans. Should you downsize? Refinance? Pay off your mortgage? What about interest rates?

On this episode of Unlocking Your Financial Future, we dive into those questions.

Should you pay off the house early or enjoy the low interest rate and pay it off slowly?

“This is probably one of the most common questions we get,” said Ben.

Interest rates have been so low for so long. It’s below 3% on a 30-year mortgage for most people.

“Money is so cheap to borrow. I don’t think that [mortgage] debt is bad debt by any means,” said Ben. “I don’t think it’s a great decision to pay off your mortgage.”

Most people’s number one goal is to pay off their home before retirement, but we can walk them through the scenarios and see which makes the most sense financially.

Is it wise to downsize to a smaller home at retirement?

A lot of clients want to downsize their house at retirement and possibly get a vacation home at the beach. When you see an opportunity to do that, and it makes sense financially, you should go for it.

Condos, ranch homes and townhouse have been flying off the market even faster than before.

Is rental property a good idea for creating income in retirement?

A lot of clients ask us this question. It can be a great investment, but you truly have to have the appetite for it.

Are you OK with getting called at all hours about something that needs to be fixed at the home? What if the tenant is not able to pay? These are all questions you need to ask before taking on a rental property.

What complications, if any, have you seen with handling real estate when it comes to estate and legacy plans?

We’ve seen plenty of problems and could share a lot of stories.

“It can get pretty nasty,” said Ben.

For example, some properties are gifted to grandkids, and the grandkids end up having to pay huge capital gains. The best thing to do is to sit down with a qualified professional, such as an estate attorney.

To hear more, you can listen to the full episode or use the timestamps below to find a specific segment.

2:15 – Pay off the house early or slowly?
5:01 – Downsize to a smaller home at retirement?
7:27 – Is rental property a good idea for creating income?
10:50 – Complications with real estate legacy plans?
12:48 – Mailbag: Redo kitchen or save more for retirement?

Thanks for listening to another episode of Unlocking Your Financial Future. We’ll talk to you again next week!


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