The adult children of retirees are worried about the impact that high inflation is having on their parent’s retirement savings, a recent survey said.
Sixty percent of respondents expressed concern that inflation is hurting their parents’ financial situation and many said they are afraid that their parents won’t be able to afford retirement in later years, the survey from American Advisors Group (AAG) said.
Amid this apprehension over whether their parents will have enough retirement savings, a growing number of adults have embraced the idea of using their parents’ home equity as a financial solution, the survey said.
“The retirement savings crisis is real, and many Gen X adult children are telling us that caring for their parents will be extremely difficult and potentially unattainable,” Eddie Herda, AAG’s vice president of brand strategy, said in a statement. “There is interest in finding financial solutions to help fund their parents’ later years and our data show that the majority are now in favor of utilizing their parents’ home equity.”
If you’re interested in tapping your home equity, you could consider a cash-out refinance. You can visit Credible to find your personalized interest rate without affecting your credit score.
CAN YOU USE A HELOC FOR A DOWN PAYMENT?
More than half (55%) of respondents said they would not have the money to care for their senior parents if their help was required.
And sixty percent of survey respondents said their parents’ home equity could be the solution to fund their retirement and make up for any savings shortfalls. However, 76% of adult children said they have never talked to their parents about utilizing home equity.
“Older Americans are feeling the effects of inflation, and their children are worried that their parents aren’t going to have enough money to sustain their retirement years,” Martin Lenoir, AAG’s chief marketing officer, said. “With the current economic environment, it’s no surprise that the majority of adult children are now in favor of their parents tapping into their home equity.”
“For many seniors, their home is their most valuable asset and now may be the time to start utilizing it,” Lenoir continued.
If you are interested in taking cash out of your home, you could consider a cash-out refinance. You can visit Credible to compare multiple mortgage lenders at once and choose the one with the best rate for you.
Home equity levels in the U.S. housing market increased in the third quarter of 2022 despite a softening in home prices, according to real estate data curator, ATTOM.
The portion of mortgaged homes that were equity-rich in the third quarter increased to 48.5%, up from 48.1% in the second quarter and 39.5% at the same time last year.
“Even though home price appreciation has slowed down dramatically in recent months, homeowners have continued to build equity,” Rick Sharga, ATTOM’s executive vice president of market intelligence, said.
“And it appears that many of those homeowners have decided to stay where they are rather than purchase a new home, and are beginning to tap into that equity, as the number of home equity lines of credit (HELOCs) issued in the second quarter of 2022 rose by 43% from the prior year,” Sharga continued.
If you want to learn more about drawing equity out of your home, contact Credible to speak to a home loan expert and get all of your questions answered.
OCTOBER INFLATION DIPS TO LOWEST LEVEL SO FAR IN 2022 — WILL IT SLOW THE FED’S NEXT RATE HIKE?
Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.