I don't know why a house wouldn't be included in one's net worth. I'd rather have $2M in IRAs, and own a $500K home, than have $2M in IRAs and have to pay rent with no equity in a home.
Now, why would that be?
While calculating how much of a draw I felt comfortable taking out my $2M IRA, I would ignore the home value if I could, but I'd still be comforted to know I had it. While I may not use the funds for day-to-day living expenses, while calculating what that draw could be, and realizing that a reasonable amount of unpredictability exists regarding end-of-life expenses, I would make some allowance for the fact that should I need assisted living, or some other medical expenses, if I needed to sell the home, I'd have some cash to meet those expenses.
|