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Should You Consider Your Home a Retirement Asset?

Renee A. Hanson, CFP® , ChFC®, CEP®, CDFA™ , CFS®, BFA®, APMA®

If you own a home, chances are your net worth has shot up in the last year. According to a new report, skyrocketing home prices caused by a pandemicfueled real estate frenzy have led to a scenario where homeowners in the U.S. are sitting on a record $22.7 trillion worth of home equity.1 Seeing the estimated value of your home increase on real estate sites can be exciting, especially if you’re counting on that money to one day help fund your lifestyle in retirement. But it’s important to remember that real estate is a more complicated asset than cash. Keep these factors in mind as you consider how the value of your home may be used to bankroll your retirement.

1. You need somewhere to live. Whether it is in your current house or somewhere else, you need a roof over your head, and that usually comes with a sizeable cost. Many people who downsize their homes underestimate how much they’ll end up spending on a smaller condo or to live in a retirement community. In fact, some come to realize that their new accommodations are on par with or even more expensive than their previous homes – especially considering that they may end up spending two or three decades there in retirement. Regardless of your situation, do the math so you know what you’re getting yourself into financially and how it will factor into your plans for retiring.

2. Selling your home might not be as easy as

you think. Given the strong demand and short supply of houses on the market, you may be seeing homes sell at lightning speed in your local community – but it’s important to remember there are no guarantees. In some areas of the country, hot housing markets are beginning to cool. As a result, you might be disappointed in the price you are able to generate when you sell your property.

Many people have been disappointed to discover that their home is not as valuable as they might

have expected. It’s important to keep a pulse on the housing market in your area to help determine what you may be able to get for your home. 3. Determining a home’s value can be difficult.

Compared with a stock, bond or mutual fund that can readily be priced in the market and bought or sold daily, a home is a different kind of investment.

The value can’t be precisely determined, and it is not considered to be as much of a liquid asset. If you’re serious about selling your home, it may be worthwhile to hire a professional appraiser to give you a realistic sense of how much you can expect to a buyer to pay you for it.

Keeping these factors in mind, it’s important to maintain a proper perspective about the value of your home in the context of your overall financial picture. Be careful not to overestimate a home’s contribution to your retirement security based on its current valuation, because those numbers can change. Even as your home is appreciating in value, remain diligent about saving for retirement in other ways, such as through a workplace savings plan or an IRA.

Talk with a financial advisor about your plans for retirement and your home’s potential value in your overall portfolio. A qualified financial advisor can recommend strategies for generating income in retirement and provide guidance on how to build equity regardless of your home’s value. Then, any funds you generate from your home will be an added retirement bonus. 1 2021 Home Equity Report, Real Estate Equity Exchange, Inc. Renee A. Hanson, CFP®, ChFC®, CEP®, CDFATM, CFS®, BFA®, APMA®, is a Private Wealth Advisor with Affinity Wealth Advisory Group, a private wealth advisory practice of Ameriprise Financial Services, LLC. in Phoenix, Arizona. She specializes in fee-based financial planning and asset management strategies and has been in practice for 30 years. To contact her visit www.affinitywealthadvisor.com or call (602) 923-9800. Her office is located at 7010 E. Chauncey Lane, Suite #200, Phoenix, AZ 85054-3115. Investment advisory products and services are made available through Putting the needs of clients first is the approach I believe in. I’ll work with you to find Ameriprise Financial Services, LLC, a registered investment adviser. Ameriprise Financial Services, LLC. Member FINRA and SIPC.the right financial solutions to help you plan for your unique goals. And together, we’ll © 2022 Ameriprise Financial, Inc. All rights reserved. track your progress over time, adjusting your plan along the way to help get you where you want to go.

Renee A. Hanson CFP®, CEP®, CDFA®, CFS®, ChFC®, APMA®

Private Wealth Advisor

Affinity Wealth Advisory Group

A private wealth advisory practice of Ameriprise Financial Services, LLC

602.923.9800

7010 E. Chauncey Ln Ste 200 Phoenix, AZ 85054 renee.a.hanson@ampf.com affinitywealthadvisor.com

Ameriprise Financial Services, LLC. Member FINRA and SIPC.

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Cupid’s Arrow Hits the Mark! A North Phoenix Couple Celebrates 77 Years of Marriage

Story and Photos Courtesy of The Retreat at Alameda

Meet James and Marge Duvall. They recently celebrated their 77th wedding anniversary. Their story is one of love, devotion, hard work, and dedication.

James and Marge grew up a small town in Northern Kansas with a population of 300. They met in grade school; James was in the third grade and Marge was in the fourth. They started dating in high school and got engaged at 17.

James was being shipped overseas to Okinawa so they decided to get married in the short leave he had before heading off. Once married, Marge stayed with her family back in Kansas.

After he returned, life took them in many parts of the country; first in Nebraska, then off to Oregon, and finally Arizona. James worked as an engineer and Marge earned her degree from NAU at 41 and taught school for 22 years until retirement. James retired from the State of Arizona working as an engineer.

One of the funny stories they shared in their travels was running out of money when the were moving to Oregon so they stayed in Idaho for a week and worked for a potato farmer picking up potatoes that had fallen off the truck. They agree that they “definitely earned their money” that week and Marge says that her back never hurt so much.

The Duvalls have three kids (Denise, Kim and James), three grandchildren and two great grandchildren. Denise lives in Phoenix, Kim lives in Oregon, and James (Jim) lives in Flagstaff.

James and Marge say the key to their happiness and longevity is a few points.

“My buddies would want me to go have a beer after work, and I said, ‘I can go home and have a beer with my wife,’” James recalls. “We both got our pilots license together, we hunted and fished together, rode motorcycles, we tried it all, even went shooting together, and Marge is a better shot than me.”

The other key to their success in marriage was financial. They never bought things without having the money for it. The saved for all their purchases and James even worked on planes to be able to buy three of them for them to fly. Investing also helped them; they would use money earned to make property investments that then turned into profit along the way.

Now both residents at The Retreat at Alameda, they share that they are grateful for their wonderful life together and have no regrets.