Data & Research
Analysis Shows How Using Home Equity Can Help in Retirement
Americans' reluctance to use home equity to fund retirement could
result in more not being able to maintain their standard of living in
retirement, according to a new report.
Reported by Rebecca Moore
The NRRI uses very conservative assumptions in its baseline scenario, including that consumers access their home equity through a reverse mortgage and invest the proceeds in an inflation-indexed annuity to help generate retirement income. The CRR said it performed its analysis realizing that very few people actually do that.
The analysis found the effect of not using home equity is greater than the effect the recession had on the Index, which caused a 7-percentage-point rise in the Index (see “Index Finds More not Prepared for Retirement”).
The CRR’s findings are here.