mortgages and loans

By the time you’re nearing retirement, you should have substantial equity in your home, regardless of what your local market has done. If that’s the case, you can leverage your home to help you boost your income that don’t rely on the stock market or home prices to keep you solvent. Simply down-sizing can be one way to take out extra income from the equity in your home, and since your kids should be grown by then, it makes a lot of sense for families. Another way to leverage the home is to take the money and invest some of it into funds that produce income while you sit snugly in a new, smaller, home.

Why Downsizing Makes Sense

While it’s true that no one likes to move, the expenses for moving can be covered with short-term cash advances or loans, and the long-term benefits outweigh the costs. Downsizing provides relief in the form of lower real estate taxes, insurance, maintenance, and utilities. Month to month, you should see a positive effect in your cash flow, just by moving to a smaller home. And, the nice part of it is that you can still have a fixed mortgage and not worry about stock market fluctuations at all.

Financing More Income Options

If you downsize and don’t need all the income for living expenses, it’s still a great time to invest in funds or annuities that can help you develop more income down the line in retirement. Once you cash out of the bigger home, prices can drop however much they want, and you’re not as affected. If you pick some safer investments that increase over time, you will have diversified your risk and made some additional income too.