YOUR HOME IS NO LONGER YOUR RETIREMENT

This economy affects us all in one way or another. Jobs are lost, salaries are cut, home values go down and uncertainty reigns.

In planning for our eventual retirement, many of us included our homes in that equation. At some point in time, we would become empty nesters, no longer requiring the bedrooms and bathrooms that a family with at-home children demanded. We would move on, selling our larger living space for a more modest home. We would pay cash for our cozy space and use the balance of our equity as part of our retirement fund. At one time, it was a solid, responsible plan.

However, as with all things of this age, our plans must change. We can no longer rely on our homes to fund our retirement in full. We must make adjustments. Maybe we will still have to take out a small loan on the smaller abode. Maybe we will have to work a little longer to add to our retirement fund. Whatever that adjustment is, it will have to happen.

If your plan to retire starts now, do not think that your house is going to be the same contributor towards retiring that it once was. Listen to your REALTOR when they give you the value of your home. Your REALTOR doesn't know about your retirement plans. The value of your home is not directly related to those plans and a buyer is not going to generously finance more than the value of your home so they can fund your retirement plans.

You do have choices. You can wait several years to see if your equity builds back up to the number you are looking for. The vast majority of pundits are predicting 3-5 years before we even begin to see an uptick in values, so plan on being patient. You can live a little more frugally than you had originally planned. What you will probably not be able to do is keep your original retirement plan of 5 years ago.