Retirement should be something well-thought-of and planned since the beginning of your career. However, not everyone is able to save up for his or her retirement at an early age and some may begin to worry that they do not have enough means to sustain their needs after retirement. Can you use your home equity to fund your retirement expenses?
Many experts have been advising their clients to prepare for retirement as soon as they land their first job. Their advice does not really go without any basis, as doing so will ensure that you have enough money to live well in retirement. Unfortunately, unexpected events can take place, which may force you to take out your emergency or retirement funds, and you may end up starting your savings from scratch again at the age of 40 or 50.
Fortunately enough, the majority of senior Americans have more money in their home equity than they do in their retirement funds, reports Realtor.com on the analysis made by the Center for Retirement Research at Boston College. This means that retirees may still be able to live well in retirement by using their home equity.
The publication further notes that there are different ways to tap your home equity to get enough money for your retirement. One could either sell their home, move to a smaller house or they may sell their house to their family members and rent the same property.
Lastly, you may also opt to become a landlord in order to save up enough money for your retirement. As previously reported here on Realty Today, the demand for rental homes is increasing and a lot of homeowners are already taking advantage of this by putting their homes or a part of their house for rent.
Renting a part of your home to someone else will give you passive income, which can be used to add more into your retirement funds. However, you also have to be prepared with emergency funds in case the renter suddenly decides to move out.
