The reverse mortgage industry may find opportunity to tap into a market segment that, by 2030, will require more than just traditional retirement plans.
That’s when the “retirement apocalypse” arrives as baby boomers will have nearly depleted the Social Security trust fund and Generation X-ers will be moving out of work, Time magazine reports.
Only 15% of small- and mid-size companies — those firms that have created most of the new jobs in the economy for the past 50 years — offers formal retirement plans, Time writes, causing retirees to have trouble maintaining their standards of living and to look elsewhere for retirement funding.
“Now, in a retirement landscape that has witnessed few big innovations since the Reagan Administration and the rise of the 401(k) account, we’re suddenly seeing a range of new ideas,” the article states.
Some approaches call for a greater federal government role — President Barack Obama’s myRA savings account, for example — while others opt for state-sponsored individual retirement accounts (IRAs). However, some argue that “state money should be put not into creating universal retirement plans but into educating individuals about the benefits of early and regular savings for retirement,” Time reports.
So a greater need for retirement plan alternatives is on the horizon. Although Time’s report does not include reverse mortgages as one such alternative, others have recently advocated for the product, saying they could help with retirement planning.
Read the full Time article here.
Written by Emily Study