What’s the Largest Asset in Your Retirement Portfolio?
According to an article published in Reverse Mortgage Daily, housing assets continue to be the largest dominant force in many senior retirement portfolios, revealed a report from the Mortgage Bankers Association’s Research Institute for Housing America.
This isn’t particularly shocking news, even after 2010 when housing prices bottomed out. Houses are still the greatest asset in a senior’s retirement portfolio because they remain the biggest investment many Americans will make during their lifetimes. It’s worth more than stocks, social security and a car all-together.
In addition, a study has revealed that older Americans who own homes are more financially secure and generally experience fewer impediments to good health than their peers who rent. The best reason for this is that seniors who own their homes are able to modify their properties according to their health needs, if these needs ever should arise.
The thing of the matter is, as much as being a homeowner is a greater financial burden, the rewards are also as great. Owning your home means that you can do with it as you wish, especially if you have made plans to age in place. If you rent, however, the home belongs to someone else and you are simply paying to live there, without the home ever belonging to you.
While the housing market has fluctuated in the past years, your home still belongs to you, and, if you survived the housing crisis, your home continues to be the biggest investment you’ve made in your life. This is especially important if you want to obtain a reverse mortgage for any future retirement needs.
Interestingly enough, even if you save adequately for your retirement, though that seems to be becoming impossible the more time passes, 50% of the typical senior homeowner’s portfolio is composed of housing wealth.
If this is true, then not only are future retirees more dependent on their homes than ever, but their retirement funds are also more limited than ever before because home equity is not immediately liquid like other assets in a retirement portfolio.
It presents an interesting dilemma for many seniors and will become an increasingly important decision for many as time goes by. Convert your home equity into cash or accumulate enough wealth through other means for retirement? Either way, seniors have a powerful bargaining chip at their disposal, how they use it, well, that’s up to them.
Intersted in a reverse mortgage or simply want more information? Give PS Financial Services a call at (888) 845 – 6630 or via email atinfo@PSReverseMortgage.com. We do not pressure those who inquire. We are simply here to help.