When the House Becomes the Missing Piece in Retirement Planning

There is a shift happening across the retirement planning profession. It is subtle but significant. Financial advisors are beginning to reconsider one of the most overlooked assets on their clients’ balance sheets, the home. Not as a place to live or a line item under “real estate,” but as a potentially strategic planning tool within the broader retirement plan.

Unfortunately, home equity has been mostly seen as a passive, excludable, asset class…just an entry on the family balance sheet. Clients held onto it out of legacy, emotion, lack of understanding the deeper planning applications, or generic advice. Advisors will leave it out of the planning equation, focusing instead on portfolio allocations, tax minimization, and income distribution from investable assets. That approach might work for some clients, but is that comprehensive planning? Most professionals who practice true holistic planning now say that omission is no longer sufficient. Lifespans have increased. Markets fluctuate more dramatically. Taxes and healthcare costs continue to rise. Even affluent retirees are feeling the strain of uncertainty.

It is not just the financial environment changing now, but rather the mindset of planners who want more durable strategies and to honor the true spirit of fiduciary care. They are looking for ways to make retirement plans more resilient without overloading risk, stretching assumptions, or making unattractive trade-offs to get plan success rates in the comfort zone. In that search, housing wealth has become hard to ignore. For many clients, the home can represent a third or more of their net worth. To leave it unexamined is to ignore the potential better outcomes and planning flexibility.

This is not about selling a product. Hopefully, that is true with all your recommended solutions. It is about modeling scenarios and having a willingness to seek what is in the best interest of the client. What happens if the client uses a portion of their home equity to create a buffer asset in down markets? What if liquidity from a home equity included strategy allows them to delay withdrawals or reduce tax drag? What if proactively including their housing wealth now means they are less likely to be forced to sell assets at a loss later? These are not abstract questions. They are planning realities that deserve equal footing with more familiar tools.

To be clear, using the housing wealth will not be the right solution for every client. But understanding its impact is. That means knowing when to consider a reverse mortgage, a home equity line, or a strategic decision to retain a low-interest forward mortgage. Each option has tradeoffs. Each requires clarity and due diligence. But each home equity asset structure, when considered as part of the total plan, can also solve problems and improve the range of possibilities that portfolios alone cannot.

The hesitation among some advisors is understandable. Many were trained to treat the home as off-limits. Others still associate housing-related solutions with outdated product types or misused transactions. The reality today is different. The regulatory environment is stronger. The planning use cases are clearer. And the resources and wisdom to model these choices integrated into the broader plan are available.

Clients are not asking for a mortgage. They are asking for a plan that works. A plan that allows them to live comfortably, remain independent, and adapt to whatever the next twenty or thirty years may bring. Let’s call that reality, funded contentment (borrowed from shapingwealth.com). Advisors who can offer that kind of planning will not only meet a need, but they will also stand apart.

What matters now is whether we as professionals are willing to see the full picture. Whether we will bring the same discipline and creativity to un-silo the home that we already bring to the other assets to understand the impact. Because when we do, the conversation changes. The possibilities expand. And the client is better served.

Interested in learning more? Connect with our team to explore equity wealth strategies that could be available to the families you care about.