The Coming Retirement Crisis
The Center for Retirement Research at Boston College recently published a short brief titled “Falling Short- The Coming Retirement Crisis and What to Do About It.” Many factors are working together to create a real crisis in retirement income for most Americans. More and more people are approaching retirement age with less money saved for retirement than what they will need to survive and live with dignity through their retirement. Lower levels of retirement plan funding, longer life expectancy, rising medical care costs and many other factors have caused the average older American to have a significant shortfall in funds to meet their long term needs.
The Coming Retirement Crisis brief from the Center for Retirement Research at Boston College expresses serious concern for the financial welfare of the Baby Boomer generation. They offer a number of potential solutions to the lack of funding, though some are unpalatable, and others impossible for many people. They suggest an increase in retirement age to 70 years old, and a ban on healthy retiree’s taking Social Security benefits at age 62. That would prevent someone from accepting the lower benefits offered at that age because the Center believes they are insufficient. The average person will require significantly more in monthly benefit from Social Security to help bridge their funding gap.
Accessing the massive amount of home equity held by the Baby Boomer generation is another potential solution to the coming retirement crisis. Many older Americans have the majority of their wealth in the form of home equity, particularly with home prices continuing to rise across the nation. One suggestion is to consider downsizing to a smaller, more affordable home and keeping the realized home equity for retirement funding. Another excellent option that is suggested is the reverse mortgage. There is also always the possibility of using the reverse mortgage to purchase a smaller home, allowing you to retain even more cash than you would otherwise. The coming retirement crisis does not have to be your crisis. There are options, and there are solutions available. Be sure to investigate them all thoroughly and prepare yourself for what will come!
These materials are not from HUD or FHA and were not approved by HUD or a government agency.