Home is where the heart is, but it’s also a source of regular income for many retirees.
Housing wealth, better known as home equity, increased to $7.8 trillion for homeowners 62 and older in the third quarter of 2020, according to a report from the National Reverse Mortgage Lenders Association. That’s good news for retirees who are concerned about running out of money in retirement—as well as those who aren’t—because your home could provide the key to long-term security.
There are more ways than ever to turn your equity into a source of retirement income. Outside of a plain-vanilla refinance, retirees can access their home equity through a cash-out refinance, a home equity line of credit or a reverse mortgage. Or you can downsize (more on that below) and use the proceeds to beef up your nest egg. Read on to help determine the best option for you.