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Thanks for the info. So when you say "private accounts" are you talking about brokerage accounts and investing with stocks?
Yes, private accounts = savings accounts, brokerage accounts, etc., not 401k, 403b, 457's, IRA's, etc. The money we use to live on is in liquid/savings type accounts(higher interest rate paying variety that some well known online banks pay) as we certainly don't want to have the money we'll need for the next few years at least in any kind of stocks/stock funds or bond funds for that matter given the interest rate environment/potential risks that I think exist with rates creeping up.
a home does far better as a cost cutter to live in then a source of funds. conventional investing and a home in a low cost area is still the best way to date to have the best retirement on the least amount of savings. a home in a low tax area can really tame inflation for you in retirement. either a paid off mortgage or a fixed rate mortgage takes the largest costs we have which is housing and cuts the effects of inflation drastically compared to renting.
another problem is the majority of reverse mortgage receivers are now taking lump sum.
that reverse compounding interest can be killer.
even here in long island with the typical home worth more than 500k it can be quite painful.
On a $250,000 lump-sum in ten years the balance will climb to $465,841. Assuming 3% home price appreciation, that would leave about $72,000 in equity based on a home's $537,566 value. In 20 years, the loan balance would reach $868,031, exceeding the home's $722,444 value.
having to relocate can be a real issue . don't forget eventually many who live out of state want to move closer to kids and family if they need care.
there are just so many negatives to using your home as a piggy bank that we all could make a never ending list as life plays out. many who took these loans just have not reached the point where their location has been a problem health wise or family wise yet..
All true but as i said,, a good option for those without kids who don't plan on moving anyways.
I'm 31 years old, been working full-time since I graduated and now have a lower management job in the industrial sector. I have $58,000 set aside in IRA's (one of which is a rollover 401k), and $6,000 in a 401k from my new job I got last January.
The definition of home equity is your net worth in the house (excluding transition cost and your market value estimate is accurate). Unless you are under water (by 114K) in another property, you have much more than 60K net worth . Feel better? .......You welcome!
The definition of home equity is your net worth in the house (excluding transition cost and your market value estimate is accurate). Unless you are under water (by 114K) in another property, you have much more than 60K net worth . Feel better? .......You welcome!
No, I only have my primary residence. Isn't it disingenuous to exclude the mortgage debt of the home when calculating my total net worth?
40, wife, 4 kids
10k cash on hand
1 car paid off (worth about 9K)
40k home equity
15k various investments
190k retirement
student loans on 3 degrees paid off
debt:
8k on 2nd car (worth around 20k now)
125k mortgage
4k credit card debt
how am i doing?
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. Feel better? .......You welcome!
