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Exclude Home From Retirement Allocation
- Treat your primary residence as consumption, not part of your retirement asset allocation.
- Count home equity in net worth but exclude the house when setting retirement asset targets.
Remove Home Purchase From Investment Mix
- When buying a home in retirement, treat the purchase cash as removed from your investable portfolio.
- Only consider debt as a 'negative bond' for planning, and avoid mixing house equity with retirement allocation.
Save For Down Payment Strategically
- Avoid raiding retirement accounts for a down payment if other options exist; use doctor mortgages or taxable savings instead.
- For a seven-year horizon, invest the down-payment fund with moderate risk and shift to safer assets as the purchase nears.