How do you view your home?

pokarodo

Today while doing a coffee run with my neighbor it came up that he views his house as part of his retirement plan. He has another 15 years until his youngest is done with high school (he's 4)! So he feels he'll get $2M out of the sale of his home at that time. That money will go to their retirement accounts and make them true up. They just bought some cheap land and are planning on building a house to "retire" in 15 years.

I told him I came to realization I have 10 more years until my DK2 graduates high school so 2030. But my DH has already said he's working until 2034 (hoping DK2 is done in 4 years !) Anyway at that time he'll be 55. I want to sell our home and start traveling and maybe move somewhere warmer for 6 months. I think our number of $5M will be feasible if not ridiculously too much. But that being said in 15 years our house is on a 30 year note and won't be paid off mostly because I wasn't planning on staying on it.

But at the same time he asked my why wasn't i considering cashing in on the house and using it for retirement $$. I don't know. I guess I never viewed my house as savings. It's just a place to live. I do view any investment properties as investments. But our house? That's the problem with living HCOLA. The home takes up such a large part of your net worth usually. It also is expensive and lots of times it turns into a little bank.

What do people do when they retire? Cash in the house? Have you viewed it as extra money? Is it extra money because you do need a place to live, but perhaps not so big. Not so much property taxes, maintenance, etc. I hadn't considered this in detail yet. My $5M number was solely based on our investments. But I am starting to wonder should I count home equity? Should I instead say our number is hit sooner if we can cash out?

RelievedSheff

Our house is our home not a cash cow.

Davesnave

I view my home as a home. It's in a very quiet and relatively inexpensive part of the UK.

I have a feeling you are in the US, in which case, good luck!

ProDave

There is nothing wrong when retiring with selling your house and downsizing to a smaller house or a house in a cheaper area.

Most of us spend a good deal of our working lives living in a place where you can find employment easily and earn a good living, such places tend to be expensive and (not meaning to insult anyone) not the nicest places, generally over crowded, and not a lot in the way on natural beauty.

So 13 years ago we sold up in the SE of England and moved tot he Highlands.  Such a much nicer place to live, much lower population density, wonderful mostly unspoiled countryside, almost no traffic jams and very much cheaper and better housing.

Why would you not want to do that, once you have retired and you have no need to stay in over crowded over priced areas?

MovingForwards

My property is my home.
My savings, pensions, shares etc is my retirement money.

In-between now and retirement I will either get a home with land, or land near where I live now.

I'm also in Scotland.

MoneySeeker1

Being single - it's one place (the only place) where things will be exactly as I require and I can "shut out the outside world" when I decide to. Since March - being able to do that "shuttting it out" has meant frequently having to switch off tv or radio very quickly - as more Covid news/propaganda has come on. So The World is let in for long enough each day to keep up with the madness that's happening - and then switched firmly back off again and "Normal" reigns until I go out.

Temp_Username12563

It's fine to think of 'home equity' but you still need somewhere to live! I can understand thinking of your home as partially an asset, but when you realise it's function (you need to live in it!) i'm not sure how you can live and use the equity at the same time (unless you sell under equity release?)

OldMusicGuy

I always viewed my home as part of my retirement plan. We stretched ourselves to buy a property in a very desirable area 20 years ago and have been able to take a significant amount of the equity out of the house as we are downsizing to a much cheaper part of the country. We had a lovely family home which was great but now our son has gone we are moving to a smaller home in a much cheaper part of the country and starting a new life in retirement. We are splitting the equity we have realised between us and our son (to help him buy). My wife and I agreed this as a long term plan, and we are so glad we did.

The property market in the US is very different from the property market over here however. It was easy for me to make this plan because we lived in a very expensive area and despite some minor bumps in the property market, our property was always going up in value. I've lived and worked in the US and know that some areas suffer from dramatic price swings (which are far less common in the UK). For example, I worked in the oil industry and saw the impact of the oil price crash on Texas property prices in the early 80s (I worked for a Texan oil company).

bouicca21

A home is a home.  Now that I am retired and only working as and when I want to, I travel a lot (at least I did in normal times), but It is great to  have a home to come back to.

Davesnave

There is also a myth surrounding retirement and downsizing. I don't know many people who, having retired from their main employment, went into immediate slipper-wearing idleness. A new and not necessarily modest property is often part of a plan to do something put off in those high-earning, busy years.

The best way to fade out gradually might well be to buy a small bungalow surrounded by others in some seaside resort, but for me that would have been a quick route to a heart attack or the psychiatrist's couch. Give me 5 acres, a renovation and some sheep any day!

Besides, where would the kids get a cheap holiday?

elsien

My house is where I live. It’s already a cheap house in a cheap area so downsizing to free up equity isn’t an option unless I want to retire to a tent, I don’t earn enough to have all the plans about buying land or whatever and I don’t particularly want to move. So my house is, and will stay the roof over my head.