Inflation spike – how it is affecting senior homeowners
US inflation is officially up to its highest level in four decades, and the rising cost of living and other financial pressures have left seniors worried about their future.
A survey of over 1,500 participants ages 60-75 helps us understand how inflation affects seniors and their retirement. All participants were selected randomly, with age and homeownership being the only qualifying factors.
The survey showed that accelerating inflation was a major concern for seniors, with two-thirds (66%) of older Americans thinking that it would negatively impact their retirement. More than half (53%) said that the cost of living is higher in retirement than anticipated.
Not only is life more expensive for seniors, but 36% said they have less money than they thought they would at this point in their life. Additionally, 37% of seniors feel like they would need to increase their cash flow in order to retire comfortably.
Many seniors in this country are discovering that their retirement plans aren’t working out as they had hoped, and inflation is only making that reality worse. With older Americans searching for ways to afford the cost of living and increase their cash low, it’s no surprise that so many are turning towards reverse mortgages.
With housing prices at record highs, seniors across the US are tapping into their home equity and using the funds to create a comfortable retirement.
According to the National Reverse Mortgage Lenders Association (NRMLA), senior home equity exceeded $10 trillion in the third quarter of 2021. Homeowners 62 and older saw their housing wealth grow by 4%, or $396 billion.
“One of the biggest fears that workers and retirees have is running out of money in retirement and having to subsist solely on Social Security,” said NRMLA president Steve Irwin. “That’s why housing wealth should be considered with other financial assets when developing a comprehensive retirement plan.”
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Source: Mortgage Professional America