You Have $300,000 in Home Equity and No Plans to Move. So What Is That Money Actually For?

$300,000 of home equity is real wealth, but it isn’t the same as $300,000 in cash. Retirees can preserve it for housing, future care, or heirs, or access it through borrowing strategies that come with costs and risks. New Africa/Shutterstock

You bought your house decades ago, watched its value rise, paid down the mortgage, and now a real estate website says you’re sitting on $300,000 in equity. That’s an impressive asset, but there’s an obvious catch: you can’t buy groceries with the bedroom wall or hand the electric company a piece of your driveway. Home equity in retirement is wealth, but it isn’t automatically spendable cash, particularly when you have no intention of selling the house. That leaves many longtime homeowners with an important retirement-planning question: what exactly is all that equity supposed to do for you? The answer may be anything from “nothing right now” to funding major future needs, but every way of turning equity into cash comes with tradeoffs.

First, Remember That $300,000 Isn’t Sitting in an Account