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My copy of MONEY magazine arrived yesterday and this issue seems to be mostly about retirement. Sort of fits in with the conversation we have been having about whether or not to count your primary residence -- but not exactly about "millionaires".

Anyhoo - MONEY says there are a bunch of myths that people have long believed, but are not (exactly) true.

One of those...

MYTH: If all else fails, your house can finance your retirement.

According to the article it's hard to eat out on your home equity. You have to live somewhere. To turn your equity into cash, you can sell and then rent, move to a cheaper area or downsize. Most retirees prefer to stay put. Yes, you can do what a small but growing number of retirees are doing: Get a reverse mortgage.... But these loans give you much less than the value of your house. For homeowners ages 62 to 69, lenders will typically let you borrow just 49% of your home equity.


This all just reinforces my opinion that you should not count your primary residence as anything other than a nice, safe place to live -- and which you have to spend money on to maintain. AND which gets taxed every single year (and, in my case, there is an association that requires dues as well).


Here is an interesting tidbit from another section in the magazine. It says:

You could also consider downsizing to a smaller home .... But here, too, a reality check is in order. Downsizing and staying in your town tends not to save you all that much. You get the biggest bang from relocating from a big city to a small town.

It's an interesting issue. Well, it's always lots more interesting to me when they talk about retirement issues than when they talk about newlyweds starting college funds for infants. :)

AM
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