When creating retirement plans, people often consider their investments and other financial assets when determining the future course to take, but they rarely consider what is often their most valuable asset: their home.
This is according to Steve Resch, vice president of retirement strategies at Finance of America Reverse (FAR), in a new column published by The Street.
“[C]omparing the potential for return on investment (ROI) on home ownership to a surprisingly similar and well-accepted investment vehicle, the 401(k), illuminates the less-explored investment potential inherent in a home purchase,” Resch said.
While costs associated with homeownership tend to dwarf expenses that are often associated with other kinds of investments, the necessity for having a roof over one’s head also makes the home a more invaluable asset that should be maintained, Resch explained. This requires the separation of the home’s value from its cost, and treating it as both “an investment asset as well as a necessary expenditure makes sense,” he said.
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