As we approach retirement age, many of us start to think about how we can make the most of our savings and investments. One option that is often overlooked is using the equity in our homes to boost our retirement income. Home equity is the difference between the current value of your home and the amount you owe on your mortgage. If you have owned your home for a number of years, you may have built up a significant amount of equity. This equity can be used in a number of ways, including taking out a home equity loan or reverse mortgage. One of the benefits of using your home equity to boost your retirement income is that it can provide you with a source of tax-free income. Unlike other forms of income, such as Social Security or pensions, the money you receive from a home equity loan or line of credit is not subject to federal income tax. Another advantage of using your home equity is that it can provide you with a lump sum of cash that you can use to pay off debt, make home improvements, or invest in other assets. This can help you to reduce your monthly expenses and increase your overall net worth. Fun fact: Did you know that the concept of home equity dates back to ancient Rome? Roman law allowed for the sale of property by the owner, with the proceeds going towards paying off any outstanding debts. Any remaining funds were then returned to the owner as equity.
top of page
bottom of page