Get committed to planning your retirement
There is an old parable about a chicken trying to convince a pig to start a ham and eggs restaurant.
The chicken realizes that the pig is a little hesitant in their joint venture and after further probing, the pig expresses his reservations.
He tells the chicken he’s has an issue starting the partnership, because even though he knows they’ll both be involved, the chicken won’t be equally committed.
As you enter retirement, you’ll transform from the chicken into the pig. Your investment strategy will change from one in which you are just involved to one where you are fully committed.
Related: The perfect retirement strategy?
Whether you use a financial planner or not. You should be asking these two questions:
1)Is it reasonable to ignore your largest asset when developing a financial plan?
2)Is it reasonable to ignore a government-insured solution?
In your retirement will you consider your home an asset or liability?
It’s a bit of a misnomer to say your home is your most valuable asset. The house itself is likely more of a liability.
You’ve heard the term “money pit”? Not all homes are money pits but they do require spending for insurance, taxes and maintenance, making it a liability of sorts.
Your home’s equity is the asset?
The actual asset is the equity in your home and most of that equity is like a winning lottery ticket. Granted you accumulate some equity through the normal amortization of your mortgage but most of your gain is the result of market conditions.
And what the market giveth it also taketh away.
The equity in your home is your winning lottery ticket
If you were holding a winning lottery ticket, would you continue to hold on to it?
Imagine a replay of 2007-2009, only this time you’re retired, and you’ll begin to appreciate the pig’s dilemma. No one can say for sure what the future holds but unlocking your equity at a time when property values are at an all time high will guarantee those funds will be available to you regardless of future market conditions.
Related: Easing the retirement squeeze
The New Reverse Mortgage isn’t for everyone…but it could be!
If you’re still wondering if a Reverse Mortgage is the right solution for you but you’re not ready to sit down with one of our Reverse Mortgage Experts, then we’ll be happy to mail (or email) you Use Your Home to Stay at Home which is the official federally approved consumer booklet for those considering a reverse mortgage.
Thanks to Bob French at retirementresearcher.com for sharing the chicken and pig metaphor