Make Your Primary Residence Your Retirement Plan

What is your plan for retirement? How do you plan to replace at least 100% of your employment income with annual increases for inflation?

For most Americans, this is a tough question to answer. It seems impossible to make more money without working than they made while employed. 

If you own a home, you have a big chance of retirement success, but you will have to get out of your comfort zone.

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We live on income. We all live on income; rich people understand this rule. Everything a rich person does adds to their bottom line—their monthly income.

Once you see the world through income, you can make decisions to earn more revenue. You can do very well during retirement by increasing your income every year.

Your primary residence vs. income. Your primary home does not generate revenue. In fact, it drains money from your account.

Therefore, your goal for retirement will be to convert your beautiful home into cold hard cash. You can do this in multiple ways, each requiring a different skill set. 

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Overcome your fear. Each method to create income will require you to overcome fear or limiting beliefs. If your goal is to pay off your home and live on social security, then read no further.

You have chosen a life of scarcity and lack. I can’t help you overcome your fear of investing in the markets, living overseas, or becoming a landlord. 

Reading about your goals is the best way to overcome your limiting beliefs. How much money do you need during retirement? Once you have that number, double it. That’s your actual goal.

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I can show you how to live more comfortably than you can imagine, but you will be very uncomfortable initially. If you want to take the next step, continue reading.

Various paths to success. There are many ways to convert your primary residence into income; you can choose the best approach for your family situation. The choices are

1. Sell your home, move overseas or a small city, invest the difference
2. Extract home equity and invest in income on the stock market
3. Convert your master into a small apartment and rent the rest of your home

There are many other ways to extract income, but today I will focus on these. You can use a variation of any of these and add your own wrinkles for maximum gain. Let’s begin.

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Sell your home and move. Most people are comfortable where they live. We all adjust to our surroundings and get very complacent.

However, many of us need help to retire in the big city where we currently reside. I live in San Diego, and most people cannot afford to retire here on passive income. That’s why I see people over 75 still working. 

But big cities give you big home equity. If you have $500,000 in home equity, you can buy a home outright in Alabama and have $300,000 to invest in income. 

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You can have no mortgage and $30,000/year coming in passively from dividends. This is good living when you add in social security or a pension. If you reinvest 25% of your dividends, your income will increase yearly.

Do you have the strength to uproot yourself and move to a small city or overseas? Only time will tell.

Extract home equity and invest in income. If you decide to remain in place, you will need to build more income. 

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A great way to get an instant income boost is from a home equity loan. Most people take a home equity loan and buy more liabilities or do home renovations.

However, if you can find a 7% home equity loan and invest it at 10%, you will start creating income. The trick is to find another way to pay off the home equity loan.

For example, if the home equity loan is $800/month, you can get a roommate to cover this amount. Or you can buy a new car with a portion of the loan and turn it into a rental car. 

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Don’t forget your income portfolio will also produce monthly dividend payments. However, if you let them reinvest for 3-5 years, you will have a massive portfolio for retirement. 

Think about ways to pay off the home equity loan quickly. Some ideas are an online business, the gig economy, or becoming a consultant. 

Convert your master into a small apartment and rent your home. No one truly wants to live with someone else in their home because it is difficult.

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However, renting rooms is the biggest wealth generator available to the average American. Since we have home equity, we can make it a much more enjoyable situation.

If you can turn your master suite into a small apartment, you can rent the rest of your home without seeing your roommates too often.

You can add a small kitchenette and private entrance to your master suite or build a furnished room over your garage (FROG). The options are limitless.

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You can also offer your children a place to rent. Chances are our children will not amass the wealth we accumulated simply because prices are high and wages are low. 

If all works out, you will generate income from roommates, increase the value of your home, and help out your kids—a win-win-win scenario. 

Are you uncomfortable with these options? All of these options require some form of discomfort. Whether moving, investing, or being a landlord, you must make a sacrifice.

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Most people would rather live in mediocrity than push themselves to the limits. You must decide how you want to spend the rest of your life. Do you want to worry about money or enjoy spending excess cash flow?

Conclusion. I am on the other side of the equation. I worked hard at my job to climb the corporate ladder. Then, I made myself uncomfortable by adding roommates, becoming a landlord, investing in dividends, and writing books. 

I cannot adequately express how it feels to have money consistently coming into your accounts. I woke up this morning to find $10 I made during my sleep from books. 

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I have rent, dividends, and royalties coming into my accounts daily. I can treat myself to eating out or buying a video game. I don’t have to use credit cards to fund my lifestyle.

Your primary residence offers you a chance to get on the other side. You don’t have to live a middle-class lifestyle; you can be middle-class PLUS.

You can live a simple life but have enough additional income to enjoy yourself and treat your family. It takes a shift in mindset and a push to educate yourself. You can do it. Good Luck!

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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.  I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing