Home Equity Retirement Plan!
June 26th, 2008I want to talk about a home equity retirement plan. A home equity retirement plan means that you’re separating the equity from the interest in your house. Now, if you’re upside down financially, this plan is not for you. There are many plans out there that may be good for somebody else, but not for you. Understand that I talk about concepts. I cannot make a wise decision specifically for you until I understand your whole situation. . . until I know your financial life. But see if this makes sense to you. Let me give you an example. . .
I have a daughter and my daughter has an interest-only loan that she got a couple years ago. She pays $2,100 a month for an interest-only loan. If she wanted to take a thirty-year amortized mortgage she’d be paying $3,200. There’s $1,100 difference between those loans. So, now she separates that money. She puts those extra thousand dollars away every month in her side account. She’s able to save that money every month. At the end of 30 years, based upon a rate of return that the S&P 500 has done over the last 25 years, she will have over two million dollars in the bank. This is a lot better than paying that $500,000 dollar mortgage, don’t you think? This is the power of separating home equity. This is not a short-term plan, It’s a long-term plan, and If done properly you will have a tax free income for the rest of your life. For a first time home buyer this is a no brainer, and everyone should look at this option. The equity is safe, liquid, and has a rate of return.
Do not do this plan on your own or with an unqualified planner. Many planners say they understand this concept but it takes special knowledge and training. To contact a planner in your area email me at aklfinancial.com or on this website.
Alan

















