Due to low interest rates, easy access to home equity credit lines and mortgage refinancing, many people in or near retirement have increased their housing debt by wide margins, according to a white paper released by Prudential Financial, based on research by the Center for Retirement Research at Boston College.
Between 1989 and 2013, housing debt for those between the ages of 65 and 74 increased by 393%, while home values rose by 76%.
This debt could force a retiree to sell their house when the first spouse dies, according to the white paper, “Planning for Retirement: The Implications of Carrying Higher Housing Debt into Retirement.”
“It is a different world today for retirees,” says Jill
Perlin, vice president, advanced marketing, at Prudential Individual Life
Insurance. “Americans are now carrying far more debt into retirement,
particularly housing debt, and need to protect their families.”
Prudential recommends that people take out life insurance policies that allow cash withdrawals and/or death benefit proceeds.
The white paper is available for download here.