“Retirement Still Out of Reach for Most”
Reports an article published by Reverse Mortgage Daily
Through stock market improvements and a considerable boost to the housing market, many Americans possibly found themselves hopeful in achieving a more comfortable, work-free retirement.
However, a study conducted by the Boston College for Retirement Research has found that many households are still unable to maintain pre-retirement lifestyles when they chose to finally chose to retire. While this is only a minor decrease, down to 50% of households from 53% in 2010, it can be the first step to a more positive outlook in the future.
For the time being though, homeowners may find their plans for retirement put on hold.
Researchers at Boston College have stated, following their results:
“Interestingly, updating the asset values only reduces the index to 50% because the rise in house prices have been relatively modest in real terms and the more robust growth in stocks mainly benefits the top third of households.”
If this is any indication, then “improving markets” doesn’t mean the same thing for every household. If, in almost four years, things have only gotten 3% better, then it doesn’t bode well for seniors who are planning to retire in the next couple of years.
One the biggest problems for many retiring seniors is that home prices are still lower (though they’ve risen) than they were in 2007 and housing assets continue to be the most valuable asset in most household’s portfolios.
Given the amount of financial wealth that can extracted from home equity with a reverse mortgage, the more the home is worth currently, the better for the borrower. The fact of the matter is, the housing market is chugging along at a crawl when most future retirees need it to go at a sprint.
This is especially important because the National Retirement Risk Index assumes households will access home equity during retirement. If this doesn’t happen, especially because of lack of beneficial home prices, then risk will be higher for homeowners.
As always the study concludes that people either need to save more or work longer, both of which are steadily becomes a way of life for many retirees. I see no problem with that, but what about the retiree that doesn’t want to work anymore, and had saved up for retirement? While some may want to explore a second career, that’s not everyone.
Here’s hoping things get better in the future for those who wish to retire.
If you want more information on the reverse mortgage program give PS Financial Services a call at (888) 845-6630 or via email at info@PSReverseMortgage.com. We do not pressure those who inquire. We are simply here to help.