Home equity is an important part of the assets that families depend on later in life—in fact, it is one of the top two assets that households rely on in retirement, outside of a pension or Social Security benefits, according to a new report titled, “
Importance of Individual Account Retirement Plans and Home Equity in Family Total Wealth.”
Researchers at the Employee Benefit Research Institute compared assets in households headed by those between the ages of 25 and 64 to learn the impact of home equity and retirement plans, such as 401(k) and IRA, on retirement. Researchers found the median share for these two assets was 78.2 percent. Among those ages 55 to 64, it was even higher: 87.4 percent.
“Individual account [IA] retirement plan assets, plus home equity, represent almost all of what families have to use for retirement expenses outside of Social Security and traditional pensions,” says Craig Copeland, author of the report and senior research associate at the Employee Benefit Research Institute. “Those families without IA assets typically have very low overall assets, so they have almost nothing to draw from for retirement expenses.”
Source: “Want Financial Security? Home Equity and Retirement Accounts Are Key,” USA Today (May 31, 2017) and “Research: Home Equity Major Retirement Asset for Most,” RISMedia (June 6, 2017)
