The amount of retirees utilizing a reverse mortgage continues to be small according to a survey released by the FINRA Investor Education Foundation.
Results from the National Financial Capability Survey found that of the people who are currently retired, only 1% of the respondents are using a reverse mortgage for living expenses.
Conducted by the FINRA Investor Education Foundation and developed in consultation with the U.S. Department of the Treasury and the President’s Advisory Council on Financial Literacy, the survey is meant to measure the financial capabilities of American adults and reveal in detail how Americans save, borrow and plan for their financial future.
By exploring how people manage their resources and how they make financial decisions, this national survey allows the FINRA Foundation to extend the reach of financial education programs in communities across the country said a statement.
"These survey results highlight just how important it is to give people the information and resources they need to make sound financial decisions. The FINRA Foundation will use this important information to help focus its efforts to address the financial education needs of underserved Americans," said FINRA Foundation Chairman Rick Ketchum.
The survey found that:
- only 41 percent of parents have set aside money for their children’s college education;
- the majority of Americans do not have a "rainy day" fund for unanticipated financial emergencies and are not adequately preparing for their children’s college education and their own retirement;
- more than one in five survey respondents use high-cost, alternative borrowing methods, such as payday loans or pawn shops; and
- fewer than half (46 percent) of those surveyed correctly answered two basic questions about how interest rates and inflation work.
The survey also found that only 42 percent of working Americans have ever tried to figure out how much they need to save for retirement. Even among those closest to retirement, just 51 percent of Americans between the ages of 45 and 59 have attempted to calculate how much they must accumulate.