“Should I Stay, or Should I Go?” Not just a great song but also an important financial and lifestyle question. A question faced by many, but most especially senior homeowners who are looking to find a sustainable retirement income and lifestyle plan. They are thinking about are:

• The financial impact of staying or going?
• How is my lifestyle impacted and what is more enjoyable?
• Should I be considering using my home equity for retirement
• What are all the options and where do I begin?

Retirement Income Planning

People have a hard time getting this conversation going. This discussion begins with if you view your home an asset. Typically, we don’t view a primary home as an asset, however, when it comes to retirement income planning and distribution, and deciding how to create a sustainable future, your house and the equity in the house does become a very important asset to consider. One of the challenges, is where does the house fit into this traditional investment model when we are looking for rate of return, safety, and liquidity?

The big question is WHY? What is important to you? Is this more of a financial decision? is it a lifestyle decision? People across the broad spectrum of income and assets are struggling with this conversation. Consider these Lifestyle issues:

• What is the size and home layout you need? Are your needs changing?
• Do you need to renovate the home?
• Do you like or dislike your neighborhood?
• Do you need to be near family? Is that important to you?
• What amenities are nearby?
• What is access to transportation?
• What is the access and quality of healthcare where you live or want to live?
• Do you envision a second home or vacation home?

What are the financial considerations to think about when dealing with real estate and taxes? Some financial considerations are:

• What is your income and cash flow today, is it enough?
• What kind of debts do you still have?
• Have you fully funded retirement? Are there other financial objectives?
• Legacy planning is planning for your kids, family, or Charity? Is it important to take care of them or are they OK?
• Estate planning- protect your estate and save on taxes.
• How do you protect yourself from taxes, capital gains, and property taxes?
• How do you protect the assets that you already own?
• What are the costs of healthcare in your area? Are those going up or are they down? Are they manageable for you over the next 10, 20,30 years?
• What are the costs of living? Is where you live expensive, or are there changes you can make to reduce that cost? If you want to keep working or volunteering or being involved, what is the ease of doing that?
• How do you maintain socialization and interaction in your life?

Consider the lifestyle you want to lead? Do you want to live in a big beautiful home? Do you want to live on a golf course? Desert community? Do you want to live in assisted living or shared living environment? What are all the options? This is tough to think about, when you are not at that stage yet, however, the earlier you start considering it and having the conversation, the greater the likelihood of a great outcome!

Experts recommend thinking about four key considerations when it comes to housing:

• The functionality of your home. How easy is it to use your home? Are you going upstairs? Will that be OK in 10-20 years?
• Where is the location, accessibility, other amenities?
• What are the services nearby?
• Is it financially affordable? Can you create a sustainable financial plan?

There are lots of choices when it comes to housing for older adults:

• Home ownership – the home you live in right now – sometimes is the best choice.
• Home modification – maybe your home requires modification, or it is time to go.
• Renting a home
• Senior housing
• Affordable housing choices (Public and Private)
• Continuing Care Retirement Communities are becoming very popular
• Assisted living – if you need that type of support
• Special needs housing
• Co-housing – living with other people and creating a shared environment.
• Micro units – mini-units where you streamline and reduce the Stuff you need
• Granny housing, ADUs, Accessory Dwelling Units are growing rapidly
• Mobile homes
• Nursing homes
• And others…

Who do you need to talk to? Is it your spouse or your partner? Is it family? Is it your kids? What other advisors need to be involved? The bottom line is you must start somewhere, and it probably it is with your partner, the person you spend the most time with. Then bring the family and your kids into the conversation. It does not matter if you are affluent or living paycheck to paycheck. Just start the conversation.

We see too many people waiting and losing options over time. In California, we are very fortunate because we have great home values and ways to tap equity to be able to create sustainable plans.

You will be surprised when you start a conversation to learn that others really care about you and want you to live a great life. At the end of the day, we want you to learn, study, and act. Know that there are no right or wrong answers – there is just a decision to Act!

Check out our other Lessons on creating sustainable planning through our Borrow Smart Conversation and Process.

Retirement Income Planning Summarized – Should I Stay Or Should I Go?

• Tough but critical conversation
• Lifestyle, Housing and Financial Considerations
• Who do you start talking to?

For all mortgage lending and HECM questions, reach us by phone, email, or schedule an in-person consultation HERE.