If you haven’t already, use money that isn’t supporting children to ensure your home is debt free. There are several reasons, all of which boil down to flexibility. With flexibility, you can use the asset in different ways when the time comes to decide where and how you want to live.

a) Many people opt to “age in place at home”. It’s a place and community they know.

b) Your Social Security and retirement savings go a lot further without a mortgage.

c) Without a mortgage you can support a HELOC to modify the home for access, safety, or medical care.

d) If you decide to move and downsize, you are likely to have enough equity to buy a smaller home, potentially with funds left over.

e) Medicaid pays for long-term care if you qualify, Medicare does not. Dual eligibles can use both programs. Your equity in a home (up to $636,000 in 2022) generally is not subject to a spend down requirement or look back period to qualify for Medicaid, but is subject to Medicaid liens. Each state is different, so you need to research it well.

f) A fully paid home can support a reverse mortgage. That can provide a lump sum or monthly payments to fund care while you are in that home. (Caveat: In a reverse mortgage you liquidate your home, it limits future downsizing decisions, and you pay interest.)

g) You may need an initial deposit to move to a continuing-care retirement communities or life planning communities (CCRC or LPC). Often people use their home equity to fund deposits which range from $30,000 to $1 million.

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