Bob Carlson's Retirement
A recent article in newsletter discusses a retirementoption that a number of baby boomersseem to be banking on: their home. Mostpeople plan on using this retirement strategyin a couple of different ways. One exampleis the soon-to-be retiree who bought ahouse in Washington, DC, in the 1960s or1970s for $50,000 and plans to sell it forupwards of $600,000 today. They then moveto a lower cost area and buy a smallerhome, using only a portion of the proceedsfrom the sale of their first home, and theremainder to fund a large portion of theirretirement expenses. Another example issomeone who may own two homes—one avacation home eventually intended to be theretirement home. At retirement, the principalresidence is sold, and the money is dedicatedto retirement expenses. While these twoexamples seem solid and foolproof, the articlewarns of the drawbacks and uncertaintiesthat should be considered. While thehousing market was booming from 2000 to2005, the market at the time of your retirementcan never be certain. Prices could falland homes could remain unsold. What itcomes down to is that a home is not a liquidasset in the way a stock or mutual fund is,and a physician-investor should not put alltheir eggs in that one basket.