Will Retirees Use Their R14.39 Trillion in Home Equity Profitably? Backup Plan? As a legacy?

If you own a home, it was probably one of the smartest financial moves you ever made.

Home Ownership Has Big Financial Benefits

In addition to providing you with a safe place to live your life, your home is also a mandatory savings account and a heavy asset that appreciates over time.

Your home gave you tax benefits, access to services in your community (especially important if you have children and sent them to public school), and your mortgage was a financial decision that gave you power and flexibility.

Also, Probably Most Important: Home Equity is at Record Highs

According to a recent report from NRMLA, homeowners age 62 and older have experienced blockbuster growth in home equity – now estimated at $14.39 trillion.

The real estate market has seen unprecedented growth over the past decade.

So, Should You Use Your Home Equity for Retirement?

The huge financial benefits your home can provide can last well into retirement – especially if you’ve built up significant equity.

That money can now be converted into a retirement income, retirement savings, a financial benefit to improve your financial options, or funding for longevity, long-term care needs or other events that are difficult to predict.

5 Ways to Use Home Equity for Retirement

Check out 5 ways you might want to use your home equity in retirement. Also, experiment with your financial planning through different scenarios using the Boldin Retirement Planner.

1. Turn Your Home Equity Into Retirement Money or Fund Early Retirement

There are many different ways to use your home equity to get a regular retirement income.

Reduce and convert income

Downsizing is often the most effective way to get rid of your equity. If you want to turn that money into retirement money. You can invest it carefully so that the money grows faster than inflation. Some people may consider converting funds into income-producing assets such as rental properties, bond ladders, dividend-producing investments, or lifetime annuities.

Use virtual space

It has become common for people to rent out all or part of their home for income.

• Can you rent out a room in your house to a long-term tenant?
• Have you considered home sharing? Remember The Golden Girls?
• How about just renting out your home when you go on vacation? VRBO and Airbnb really easy ways to turn your home into income.
• Do you have a pool? Swimply lets you rent it by the hour.

Consider the monthly income from a reverse mortgage

Also controversial, a reverse mortgage is a type of home equity loan that can be paid off until you leave your home permanently. One of the options for a reverse mortgage is to get your loan amount as lifetime payments. A portion of your home equity is converted into lifetime income.

2. Convert Equity to Cash

Not everyone has saved enough for a secure retirement. However, your home equity is a real asset. You can convert equity into retirement savings.

Reduce and use your equity

When you reduce and release your home equity you get liquid assets that you can invest or use as you want and need. You have many options to downgrade.

• Sell ​​and move to a more affordable home or retirement community
• Sell ​​and rent residential property
• Try a tiny house habit
• Vacation abroad

Get a home loan

A home equity loan is a common way to access the equity you have built up in your home. However, sometimes it may be difficult to qualify for this loan in retirement due to the income requirements and your monthly payment requirement compared to the loan.

This was a better option when interest rates were very low.

3. Save Your Home Equity to Use as a Savings Plan / Contingency Fund

Perhaps one of the best ways to use your home equity is to hold on to it and use it only when you need to. For example, maybe you:

• Use your home equity if you are living longer than expected and need additional assets
• Tap into your equity to fund a long-term care need

The only problem with waiting to tap equity when you really need it, is that it gets harder as you get older. Moving is more difficult as you get older. Also, financial transactions are more problematic for elderly people with physical and mental decline.

Home equity to support longevity

One of the most challenging aspects of retirement planning is predicting how long you will live. Also, it can be stressful to think about living beyond your possessions. Your home equity can be a backup plan to fund your retirement if you (fortunately) outlive your assets.

Home Equity to fund long-term care needs

Long-term care is very expensive. Also, you have no way of knowing whether you will need it or not. Therefore, keeping your home equity to finance these expenses can be a smart strategy.

Reverse mortgage long-term care

If you can’t get a home loan, but want to stay in your home and need access to cash, a reverse home equity line of credit may be a viable option.

• When my grandmother had a stroke, she immediately used her belongings. She was able to use a reverse mortgage line of credit to stay and finance home care.

4. Use Home Equity to Increase Financial Flexibility

Maybe you don’t really need the cash. However, taking out home equity can increase your financing options.

Access to a line of credit, proceeds from the sale of your home or a reverse line of credit gives you flexibility. Think of your home equity as another source of money that you can use strategically.

Here are a few ways to gain strength and flexibility in your home equity:

Home Equity Loan Line of Credit:

A home equity line of credit can be an effective way to access your equity. You only pay interest on the money you spend, not all the money you have.

A line of credit simply offers financing options. It is a pool of money that you can access when needed.

• Let’s say college tuition is due this week. Also, you intended to sell the stock to pay off the debt. However, a large portion of that account is tied up in low-value stocks. If now is not the time to sell, it may be a better idea to let the stock recover and consider paying off the building with a different financing, such as your home equity line of credit.
• Or, maybe you want to hold onto your home equity now and use it only for longevity or a long-term care need in the future. Setting up a home equity line of credit now gives you more flexibility and ensures you can access the funds when you need them.

Sell ​​a Home and Save Money:

Of course, when you’re ready to leave your home, downsizing and releasing the equity as cash is the most flexible option.

• June has worked as a nurse for 25 years, and like many in the profession, she is tired and ready to retire this year at the age of 62. However, he doesn’t want to start Social Security early, even though the income can make retirement more accessible. He chooses to tap his home equity by downgrading to the over 55 community. Interestingly, the complex has good facilities. The proceeds from the sale of her home will help her bridge the gap between quitting her job and starting Social Security.

5. Preserving Home Equity for Your Heirs

For better or worse, many people want to keep their home equity in order to leave it to their heirs. Each year, billions of dollars are passed down to older children through real estate. Also, a recent study found that people who expressed a strong desire to leave a legacy of at least $10,000 were much less likely to sell their homes before they died, with the goal that the house would be part, if not all, of that legacy.

This was true even if the value of the home was more than the inheritance claimed.

Inspired by these home equity options? Try them!

I Boldin Retirement Planner makes it easy to try any of these options to use home equity as part of your retirement plan.

Updated January 2026