If their retirement dream has been to sell and move, they may also need to be flexible – unless they’ve already bought another place. This would a good time to meet with them and review their plans as they may need to adjust to living on less or perhaps finding part-time work.
“We, as financial advisors, can work with them to tweak the numbers in their financial plan and show them how things will now look,” said Dick. “It might not be that bad. I’d be more concerned about their top-10 investments rather than their housing right now. So, I think the key for clients is to be flexible, to be open to things, and to manage their expectations.”
Dick also noted that advisors can encourage clients who want to get into the housing market to be creative as more people are looking at co-owning property. Some are siblings. Others may be single moms banding together to buy a home. But, she urged advisors to ensure that their clients get a legal agreement, which states who owns what percentage of a property, how the co-owners, share the maintenance costs, and what happens if one person wants to sell.
“It’s a good way to get into the market,” said Dick. “But they need a good legal agreement.”
The other thing advisors can help clients consider is their mortgage renewal. If it’s due in the next couple of years, they could calculate what they would then owe and readjust their budget to begin to save that amount now, then save that money to pay down some of principal when they renew.
