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Is Home Equity an Underutilized Retirement Asset?

Last Updated March 28, 2017

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Sourcehttp://crr.bc.edu/briefs/is-home-equity-an-underutilized-retirement-asset/ " target="_blank"> http://crr.bc.edu/briefs/is-home-equity-an-underutilized-retirement-asset/

IB#17-6

The brief’s key findings are:

  • Home equity, the largest asset for most households entering retirement, can be tapped by downsizing or by taking a reverse mortgage.
  • Few households currently use either option due to behavioral and informational barriers, a preference to stay in one’s home, and high transaction costs.
  • To the extent that behavioral and informational barriers impede downsizing or reverse mortgages, home equity is an underutilized retirement asset.
  • An open question is whether more retirees will overcome these impediments and tap home equity in response to growing financial pressures.