September 14, 2007

Workers/Retirees Hanging Onto Homes

Americans worry about quality of life in retirement, but won't seek a reverse mortgage, survey finds

Amid a shaky housing market, the majority of Americans (73%) say they plan to hold on to their homes--one of their biggest assets, while 21% of working Americans who are five years from retirement also plan to stay in their homes during their golden years, according to the latest Principal Financial Well-Being Index.

The index, released quarterly and conducted by Harris Interactive, surveys working American adults at growing businesses with 10 to 1,000 employees, as well as retirees. The most recent survey also found that while the majority of retirees (60%) have paid off their homes completely, a pretty sizeable 36% of retirees have less than 20% equity built up in their homes. The bulk of retirees and workers polled (78% of retirees and 76% of workers) also said taking out a reverse mortgage or selling their homes is not an option they would use to fund their retirements.

Despite the fact that more than one third (39%) of the workers polled are worried about maintaining their current quality of life in retirement, and fret about being able to afford medical care, 45% of workers and 61% of the retirees polled have not received any financial planning assistance, the index reveals. While 42% of workers think they should have 11% or more of their pretax salary for retirement, the survey says, only 11% actually do.

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