Home sweet home: Secured

Written by ERIC RUTHRetirees Miki and Susan Mathe at their home in Milton. The Mathes paid off mortgages on both their original home and retirement house in Milton rather than risk their investment assets in another market meltdown. / THE NEWS JOURNAL/GARY EMEIGH

A home is something to live in. But when it comes to retirement planning, it's also something to lean on.

In the ever-changing calculations that retirement planning involves, homeownership stands as a quiet but crucial bedrock, a foundation that helps stabilize and support efforts to save before retirement -- and survive once it arrives.
It's a process that can take most of a lifetime to accomplish, but can pay precious dividends. A home can cost about 30 percent of yearly household income, and having it paid off by the time you retire will make your retirement income go a whole lot further."There's a huge peace of mind going into retirement knowing you don't owe anyone rent or mortgage payments," said Nick Hoeschel, financial adviser with Rockwell Associates in Wilmington.But as any homeowner -- or couple considering a house purchase -- knows, being able to afford a home of your own is a calculation that must be balanced against lifestyle preferences.
Retirement advisers say any such calculation must include an assessment of the impact a house purchase and mortgage will have on your retirement plan.
Take a mortgage out too late, or at terms that are too long, and you must plan for continued payments through retirement.
Step up from that starter home to a McMansion, and it's likely that retirement plans must shift as well, since all that extra money you are pouring into a bigger home is money you can't set aside for your retirement.
And once the kids leave the nest, or a spouse passes away, downsizing starts to be a consideration as you consider how you want to live once you retire and what kind of living quarters make sense given your health.
Make the right moves, and by career's end, homeownership can make shelter costs all but vanish.
It also can provide an asset that can stand as collateral for borrowing, a move to a more manageable living situation or climate or even help fund long-term care.
Yet in these tipsy financial times, the foundations of homeownership are showing some signs of decay.
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