What you might think of as a monthly expense could be a key part of your retirement plan later on.
📺 24/7 Chicago news stream: Watch NBC 5 free wherever you are."They see the money in their brokerage account, their 401s, their . They don't often think about the money that is built up in their home."
"There's obviously unhealthy debt, like credit cards and things like that," Sun says."And then there's debt that could pay it forward. One is student loans, obviously, right? And then the mortgage."Certain types of debt can be considered healthy because they help fulfill a need like education or shelter. And for the most part, you can expect to make consistent, predictable payments at a fixed rate.
After you've paid off your mortgage,"you recover some of the value of those payments that you've made throughout the years" when you sell your home, even though there are transaction costs involved, he says.Your home serves an important need in the present as shelter, but is also a valuable investment for your long-term savings, Sun says.
As the property appreciates, the option to sell your home in retirement becomes more viable. That cash can be factored into your retirement plan and take away possible worries about not saving enough."Each year, you're actually saving more than you realize, because you're paying off a loan balance that at some point in the future can be recovered by selling the house, which also may have appreciated," Stein says.
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