Of more than 2,000 American retirees, only 11% report using home equity as a current source of retirement income according to a recent survey from Transamerica Center for Retirement Studies.
The majority, or 89% of retirees over the age of 60 most frequently cite social security as a current source of retirement, while retirees in their 50s most frequently cite other savings and investments as sources of income, the survey states.
“Today’s retirees are facing formidable challenges in ensuring that they have adequate income to last their lifetimes. As Baby Boomers retire, Social Security and other benefit programs will likely be under even greater strain,” said Catherine Collinson, president of Transamerica Institute and Transamerica Center for Retirement Studies.
As people age, the survey found the likelihood of utilizing home equity as a source of retirement income increases.
When broken down by age group, 15% of retirees over the age of 70 reported they are currently using home equity as a current source of retirement income, while only seven percent of retirees ages 65-69 reported utilizing home equity for their current retirement income.
The Current State of Retirement survey was conducted in July 2015 and included 2,012 U.S. residents, age 50 and older, who consider themselves fully or semi-retired.
Among those surveyed, more than half, or 54% shared that they do have a retirement strategy, but only 10% have it in writing. For those with a retirement plan in place, 88% consider Social Security and Medicare benefits as the cornerstone of their current strategy.
“As a society, we frequently speak of the need for workers to save and prepare for retirement. Unfortunately, the conversation often ends once people stop working and retire, which is when it becomes even more critical for them to have a financial plan that can last their lifetimes,” Collinson said.
The Transamerica results are in line with other recent survey data indicating the majority of retirees and pre-retirees do not seriously consider home equity use in retirement.
Written by Alana Stramowski