Many financial roadblocks exist when it comes to saving for retirement in the U.S., however, there are certain actions workers can take to address these obstacles, according to a recent article from CBS News.
Using home equity for retirement consumption could be one possible solution for retirees who are “home rich and cash poor,” the CBS News article explains, but the reality is Americans are underutilizing this resource.
Exploring ways to leverage home equity to help with mortgage payments in retirement, more specifically, looking into a reverse mortgage may be an option for someone who has a sufficient amount of equity in their home.
The importance of leveraging home equity in retirement was highlighted in a report issued earlier this month by the Bipartisan Policy Center (BPC). The comprehensive, 152-page report outlined several recommendations that the U.S. government, as well as employers and financial institutions, could adopt to address the most prevalent issues currently facing American workers.
“The BPC report noted that half of all Americans age 62 and older are “home rich, cash poor”, meaning at least half of their net worth is in their home equity,” the article writes.
In addition to home equity being underutilized in retirement, the lack of basic knowledge on how to manage personal finances and the fact that social security is at a crossroads are two other challenges that American are facing.
Read the full CBS News article here
Written by Alana Stramowski