With what he sees as today’s seniors being “home-rich” but “cash-poor,” G. William Hoagland, senior vice president of the Washington, D.C.-based think tank Bipartisan Policy Center (BPC), suggested that seniors look outside traditional forms of retirement planning and start thinking about reverse mortgages, according to an article from Reverse Mortgage Daily.
Speaking before a policy forum hosted by the Employee Benefit Research Institute, Mr. Hoagland said the untapped home equity could provide senior homeowners with the financial resources that they need to set themselves up for retirement. “Home equity, we think, is underutilized in retirement planning,” he said.
Mr. Hoagland cited data which showed that Americans own an aggregate $12 trillion in home equity — showing that, for many retirees, home equity comprises a majority of their assets. With that in mind, he sees nontraditional retirement planning methods such as reverse mortgages becoming a growing trend.
“Fifty percent of all homeowners age 62 are home-rich and cash-poor in the sense that more than half of their net worth is held in home equity,” Mr. Hoagland said. “The reverse mortgage market is small and the product carries some risk, but nonetheless, we think it could be a valuable tool for retirees with significant home equity.”
The BPC is currently working on a report on ways to expand access to “well-designed” workplace retirement plans, provide personal savings for the short term and retirement and preserve and strengthen Social Security for years to come. It is scheduled to be released on June 9.
The attorneys at the Law Offices of Hunziker, Jones, and Sweeney understand that the aging population has specific and diverse needs. The firm helps seniors and their families by handling all aspects of elder law, including end-of-life planning, asset preservation, Medicaid planning, and trusts and estates issues. These issues can range from simple to complex, and can often be emotional. The attorneys at the firm can be trusted by their clients to handle each legal matter with diligence and compassion. For more information, call (973) 256-0456.