Can the Home Help Fund Retirement or Future Care Without Becoming the Whole Plan?
A home can feel like two different things at once. It is the place where daily life happens. It may also hold a large share of the wealth built over many years.
When retirement income feels tighter or future care enters the conversation, that equity can start to look like an answer. It may be an answer, but the first decision is broader: what should the home preserve, and what should it make possible?
That question comes before a reverse mortgage, a home equity line, or a decision to sell.
What is the home already doing?
The home is already providing a place to live. It may also support familiar routines, community ties, and a sense of continuity. Financially, it can represent a substantial part of household wealth. Research from Harvard's Joint Center for Housing Studies found that older homeowners held significant equity, while also facing the combined costs of housing and care. [1]
Many older homeowners strongly prefer to remain where they are. Fannie Mae research found that this preference can reflect attachment to the home, comfort with the area, and pride in owning it outright or nearly outright. [2] Those preferences belong in the plan. They help define what the equity should protect before any of it is used.
Which future jobs might require the same level of equity?
Home equity may eventually be asked to perform several jobs:
- Current cash flow: Create money for spending, repairs, or a defined retirement need.
- Future housing: Help pay for a smaller home, a different community, or a living arrangement with more support.
- Care: Fund home modifications, in-home help, or part of a move to a care setting.
- Choice: Keep enough flexibility to respond when health, family, or housing needs change.
- Legacy: Preserve some value for a spouse, family, or another intended recipient.
These jobs can overlap, but they draw from the same finite resource. Housing and care decisions are often connected because care can occur at home or in other settings. The funding may come from personal resources, insurance, public programs, housing, or a combination. [3] A 2025 National Council on Aging issue brief described home equity as a potential buffer while also showing that it may not cover the full cost of long-term services and supports for many households. [4]
Why does home equity work differently from cash?
Equity is valuable, but it is not sitting in a bank account. Access usually requires selling the home or borrowing against it.
The Consumer Financial Protection Bureau outlines several borrowing options, including a cash-out refinance, a home equity loan, a home equity line of credit, and a reverse mortgage. Each changes the household differently. Some create monthly payments. A reverse mortgage generally allows repayment to wait while the borrower remains in the home and meets the loan obligations, but interest and fees increase the balance over time. Selling releases equity without a new loan, yet it also creates a housing decision. [5]
The right comparison, therefore, depends on the job. Money needed for a one-time repair presents a different question from money intended to support years of spending or an unknown period of care.
How can future care change the decision?
Home equity often looks optional until another resource falls short. A 2024 survey asked 508 people ages 48 to 78 with at least $100,000 in investable assets about backup plans for medical or long-term care costs. Fewer than one-third said they would consider using home equity. A comparison with Health and Retirement Study data found that more than 40% of older households in that wealth group ultimately tap equity through borrowing or moving. [6]
Those findings do not predict what one household will do. They show why the home deserves a defined place in the care plan before a health change makes the decision more immediate.
Dovetail Principle: Financial Decisions Need to Fit Together
A home equity decision changes more than the amount available today. It may change future housing choices, the money available for care, and what remains for family.
The decision becomes easier to evaluate when those connections are visible. A household can then decide which jobs the home should perform and which jobs should be funded elsewhere.
What should be clear before selecting a tactic?
Begin with a short job statement for the home: what it should support now, what it should keep available for a later move or care need, and what you hope will remain afterward.
Then put numbers around the statement. Estimate current equity after mortgage debt and likely selling costs. Identify any replacement housing costs. Separate a known cash need from a future reserve. Treat legacy as a preference that should be named, rather than whatever happens to remain.
If moving closer to family is one possible path, review the life and costs at the new address before assuming the sale proceeds will be fully available. See Before You Move Closer to Family in Retirement, Review What Will Actually Change.
This is where Connected Planning can help. The review starts with the home, then shows how using its equity may affect other areas.
Once those jobs are clear, a sale, a loan, a reverse mortgage, or a decision to leave the equity untouched can be compared for the same purpose. The home can become part of the retirement plan without being asked to carry the entire plan.
Related Reading: Reverse Mortgages: What You Gain Today and What You Give Up Later. It explains how today's access may affect the equity needed later.
About the author
Ross Marino, CFP®, CeFT®, is the Founder & CEO of Dovetail Financial and creator of Human-First Financial Guidance®. He helps people nearing or living in retirement connect their lives and wealth so that financial decisions become clearer, more personal, and easier to navigate.
Notes
- Housing America’s Older Adults 2023, Joint Center for Housing Studies of Harvard University, 2023.
- Older Homeowners Are Financially Confident Aging in Place, Fannie Mae, February 29, 2024.
- Long-Term Care, Caregiving and Related Housing Issues: The Perspective of the Individual, Society of Actuaries Research Institute, 2024.
- The 80% Report, National Council on Aging, September 2025.
- Using Home Equity to Meet Financial Needs, Consumer Financial Protection Bureau.
- Household’s Plan for Long-Term Care Often Do Not Reflect Reality, Center for Retirement Research at Boston College, March 18, 2025.
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