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If I sell my house, however, I need to replace it to continue to have somewhere to live. Only if I buy a cheaper home would I actually realize any cash from the deal.

Or rent. If I sell my house for $350,000, and since it's my primary residence I escape capital gains tax, and now I rent an apt. for $500/month splitting it with a roommate, I have made $349,500 from the sale of said asset.

On the stock though, I absolutely have capital gains tax (15%, I think).

I must confess, I can't recall if the capital gains tax only is exempt if you buy an asset worth more (remain upwardly mobile).

However, including it in your financial planning is a whole different issue. How exactly do you count it in your planning, Scanner? I don't see where it would fit. I can't count it as a retirement asset because I can't spend the value of my home to pay my bills when I stop working unless I borrow against it's value, and then it turns from asset to liability.

I count it as part of my "net worth" goals.

I can also benefit in retirement from my home in 2 different ways:

1. Reverse mortgage.

or

2. (my preference) Sell it to an investor with an agreement to lease back. The asset is then "pre-liquidated" for probate when I pass away.

I then have $350,000 in the bank earning interest and a bonafide agreement to remain in the home and escape taxes, repairs, etc.

Really, I know the spirt of what you are saying, DisneySteve - you and JimOhio are on such a track that your home will probably be somewhere around 5% of your net worth.

For the average American, who has a small pension and a few thousand stashed away, I don't know how you can just pencil off your home on your net worth statement.