Seniors believe comfortable retirement is out of reach

“Seniors now see their home equity as a financial tool that can help secure a comfortable Lifestyle”

 

As retirement becomes more challenging for many Americans, seniors are starting to use alternative methods such as home equity to fund their later years, according to reverse mortgage lender American Advisors Group (AAG).

Data from AAG’s Modern Retirement Survey revealed that 81% of seniors believe retirement difficulties will get harder for the next generation. More than a third (37%) of retirees feel that their employers failed to help them achieve the retirement they wanted.

“Traditional financial strategies no longer guarantee a comfortable retirement, and that has many Americans worried about how their children will fund their future,” said AAG chief marketing officer Martin Lenoir. “Seniors are beginning to retire the old ways of thinking when it comes to their post-work life and are using alternative methods to fund their later years, such as utilizing their home equity. The concept of retirement has evolved, and seniors now see their home equity as a financial tool that can help secure a comfortable lifestyle.”

Roughly 28% of the respondents said their retirement strategy did not work out as planned, with nearly one in five seniors citing the pandemic as one of the impediments to their plans.

According to the National Reverse Mortgage Lenders Association, senior homeowners are now sitting on $10 trillion in housing wealth.

“Through a federally insured Home Equity Conversion Mortgage (HECM) loan, more commonly known as a reverse mortgage, seniors aged 62 and older can access their home equity, eliminate their monthly mortgage payments, and remain in their home long term,” AAG said in a statement. “Seniors who use a reverse mortgage loan to remain in their home long term are required to continue paying their taxes and insurance, live in the home as their primary residence and comply with all terms of the loan.”