Greenbook: A Local Guide to Chesapeake Living - Issue 6 | Page 17

definite investment
greenbook
J. Melvin Premier properties

5 Ways Your Real Estate
Intersects With Your
Financial Plan
Story By: Brian Kuhn CFP®
301.543.6035

A

s you think about the rest of your life
what comes to mind? From a financial
planning perspective there are the
important topics of when you might
retire, or at least slow down your career and
where you will be live over that transition. The
financial ramifications of your family’s decisions
on real estate can help determine the outcome of
your financial and retirement plans. Let’s take
a look at 5 areas of this crossroads between
personal finance and real estate.
Downsizing – Whether the future is clear in your
mind as you transition into retirement or not, at
some point you and your family will have to
decide what to do with your current residence.
Will it be too big as you age? Does it have a
unique feature like waterfront that would benefit
its future appreciation? Can you transition to
living within the home on one level if necessary?
Do you feel downsizing is a necessary step to be
able to afford retirement? These are personal
questions unique to you and your family’s life
style and preferences. However often those
who are considering their future don’t fully
appreciate the potential for the residence to
provide a sizeable windfall upon its sale. The
power of compounding comes in to play here
just as it does in other investment markets.
Taxes – paying taxes in a variety of ways will be
inevitable as you negotiate your goals. First is
the potential for a capital gain that must flow to
your tax return in the year you sell your
residence. However the exclusion of $250,000

for single and $500,000 for couples hasn’t yet
been taken away by Congress. If you think yo B