For my own planning, I’ve been slow to realize that the strategy of accumulating equity in a few rental houses -that worked so well for the past generation- is not be a viable retirement strategy for me. What was a comfortable level of accumulated equity earmarked for retirement a few years ago is all but wiped out now and we may not even be at the bottom of the market cycle yet. I have to make the decision of whether to hang on to these liabilities (now with exploding tax and insurance costs) in the hope that values recover within my lifetime or to dump them and start over with a new retirement savings strategy almost from scratch even at this late stage of working career. Right now most of the money that would otherwise be going into a traditional retirement savings account is being used to fund the negative cash flow of the rental houses so it is clearly a high risk decision. The question is whether to walk away from what was potentially (and might be again if values recover) more than a million dollars in real estate equity and put that money into another investment that might accumulate to only a few hundred thousand by the time I retire. Walking away from the liabilities is safer but doing the math tells me that I would not have a reasonable prospect of building an adequate level of assets for retirement within the next decade. On the other hand, keeping them means essentially betting my financial future on the recovery of the housing market. I presume that many others who invested in residential houses in the past are facing similar questions but I haven’t seen much written about this particular decision issue.