A new report from the Society of Actuaries says that despite the financial turmoil in recent years, American’s retirement concerns changed little from 2007.
Conducted through telephone interviews of 804 adults age 45 to 80 (401 retirees, 403 pre-retirees) in July 2009, the survey found keeping the value of investments up with inflation, income varying due to changes in interest rates, the affordability of health care and long-term care, outliving assets, and maintaining a reasonable standard of living were major concerns.
”The two principal concerns of both pre-retirees and retirees centered on the consequences of not being able to keep the value of their savings and investments up with inflation, and their inability to pay for adequate health care,” says the report.
When it comes to retirement economics, the report found that home values are an extremely important asset for older Americans. For those in the 25 to 85th percentile by asset values, non-financial assets (primarily home values) are 70 percent of total assets (excluding the value of pensions and Social Security).
Even though it makes up such a large percent of older American’s total assets, few currently plan to tap the equity to pay for retirement.
The survey results show that only about 16 percent of retirees and 20 percent of pre-retirees have already used or plan to use equity in their home to help finance their retirement. If they do plan on using their equity, 45 percent of retirees and 56 percent of pre-retirrees plan to sell their home. They are much less likely to access this equity through a home equity loan, or through reverse mortgages.
For those who have already used equity from their home to finance retirement, 45 percent accessed it through a home equity loan, thirty one percent sold their home, and fifteen percent used a reverse mortgage.
To view a copy of the report, see here.
