A new report from Smart Money shows that after almost five years of falling home pries, many retirees must consider what to do with their homes should prices continue to collapse.
Many who are approaching retirement have been counting on their home equity as a way to finance their golden years, but the real estate downturn has made it more difficult.
In the past, Americans hoped to age in place and viewed the equity in their home as the break-in-case-of-emergency asset, the one asset they would use to pay for long-term care or nursing homes.
Today, however, aging in place isn’t the option it once was, especially given the possibility that the equity in one’s home might be falling in value, while the cost of keeping a home real estate taxes, property insurance premiums and utilities is rising.
“The vast majority of people are looking to age in place,” said Kenn Tacchino, a professor at Widener University as well as the director the New York Life Center for Retirement Income at the American College. Unfortunately, keeping a home a person used to raise his or her family “may not be the most cost-effective or accommodating place for retirement living,” he said.