Quote:
Originally Posted by disneysteve
And the percentage of net worth represented by the home doesn't matter either. If my home was 50% of my net worth, but that net worth was $5 million, I could retire just fine. If the home was 20% of net worth and the net worth was $3.125 million, I could also retire just fine. In both examples, the investment portfolio is $2.5 million.
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Not necessarily.
If your property tax plus the upkeep on your home totals 2% of the home's value annually, on a $2.5 mill home you will need to spend $50,000 per year just to maintain it.
If you have only $2.5 mill in financial assets and you follow the 4% withdrawal rule, maintaining your home will suck up 50% of the money you have to spend annually. Surely that is not acceptable, is it?
So the value (and therefore the cost) of your home at retirement relative to your financial assets will really affect your lifestyle.