Nearly 30% of Older Homeowners Say They Can’t Retire On Time

Historically, homeownership has been a cornerstone of retirement security, viewed as a dependable asset that would ensure financial stability for homeowners as they age. However, new research from Point reveals that while many homeowners view their homes as a key part of their retirement planning, a significant number still fail to fully recognize or utilize their home equity as a financial resource. Even though many older Americans see their homes as their most significant asset, many feel unprepared to retire comfortably.

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Point's survey of over 1,000 homeowners aged 50 and older found that, among those not yet retired, nearly 30% lack confidence in their ability to retire on time—or at all.

How confident are you that you’ll be able to afford to retire on time?¹

Savings & Retirement Timing

Financial preparation plays a significant role in the ability to retire on time. Not surprisingly, homeowners who report having more retirement savings express higher confidence in their ability to retire. 

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Among working homeowners over 50, 15% have saved less than $10,000 for retirement.  Eighty-eight percent of these homeowners doubt they’ll be able to retire on time or at all. Among those with $50,000 or less in savings, 72% are concerned about their retirement prospects, whereas only 25% of homeowners with over $250,000 in savings share this uncertainty.

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With average monthly expenses for those over 65 exceeding $4,000², and the average Social Security payment at $1,907³, it's no wonder many older Americans are concerned about their financial security.

How savings impact retirement confidence for pre-retirees

While savings are a crucial driver in the ability to retire, many homeowners face financial pressures that make it hard to save or even get by. In addition to not saving as much as intended, the top reasons cited by those who have had to delay retirement or return to work are interest rates, inflation, and housing costs.

Top five financial pressures respondents reported delaying retirement

Homeownership & Retirement Security

Homeownership remains a critical component of many Americans’ financial security despite the growing uncertainty about retirement. Half of homeowners aged 50 or older said their home is a significant part of their net worth in retirement planning. Almost half of those surveyed have more than $250,000 of home equity. 

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However, tapping that equity through traditional financing is not always easy. According to a Point study, about half of people who attempt to tap their home equity cannot. It can be particularly challenging for older adults to qualify for mortgage products due to factors like income, leaving them with few options except for products like reverse mortgages to access their equity⁴. Additionally, selling has become increasingly challenging, with September 2024 marking the slowest annual sales rate in 14 years, coupled with a 1.5% rise in the inventory of unsold existing homes⁵. These trends highlight the growing difficulties Americans face in leveraging home equity, whether through borrowing or selling, compared to previous years.

How savings and home equity compare

Among retirees, 48% consider their home a major part of their net worth, with 23% holding $500,000 or more in home equity and 57% having at least $250,000. In contrast, only 12% of retired individuals have $50,000 or less in home equity.

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For those homeowners who are unsure if they’ll be able to afford to retire on time, if at all, home equity remains a significant part of their net worth. Of those who aren’t confident they can retire, 45% still see their home as a significant asset. Surprisingly, over 50% of working homeowners with more than $100,000 in equity aren’t confident they’ll be able to retire.

How much equity do you have in your home?

The amount of home equity also influences people’s confidence when they think they can or will retire. More than 30% of those with less than $50k in equity say they don’t believe they will be able to retire, while only a fraction of those (6%) with $500k or more in equity feel the same.

How the amount of home equity impacts retirement confidence

Changing Landscape for Retirement Planning

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As retirement approaches, many homeowners are facing increasing uncertainty about their financial preparedness, with homeownership no longer offering the guaranteed security it once did. The challenges of saving for retirement, rising living costs, and insufficient savings are pushing many to delay their retirement plans or return to work post-retirement.

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However, home equity is at an all-time high and remains a vital asset that can provide a crucial lifeline. For those approaching retirement, tapping into their home equity could mean retiring on time and maintaining financial independence. In fact, 65 percent of survey respondents expressed potential interest in accessing their home equity if it meant they could retire sooner. 

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Accessing home equity can offer retirees a financial cushion without the need for significant lifestyle changes. By utilizing the value in their homes, retirees can create a reliable income stream to cover essential expenses and preserve their standard of living. While many homeowners already have this equity built up, others, especially those with years until retirement, could benefit from maximizing their home equity. However, for those struggling financially, these strategies may not always be feasible—but even small steps can help build equity over time and improve financial security.

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For those looking to tap into their equity sooner, a Home Equity Investment (HEI) offers a flexible way to access the funds they need without increasing monthly expenses, giving homeowners more financial freedom to enjoy their retirement years fully. Other options include Home Equity Lines of Credit (HELOCs), reverse mortgages, cash-out refinancing, and home equity loans, each providing ways to leverage home equity based on individual financial needs and goals. By exploring these alternatives, homeowners can find the best solution to help secure their financial future. 

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With the right strategies, homeowners can unlock the resources they need to retire confidently, ensuring a more secure and fulfilling retirement.

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