Changing Homebuying Patterns Could Delay Retirement

Many U.S. citizens are able to take advantage of generous tax breaks created to encourage people to buy homes and invest in real estate.

Perhaps in large part due to these incentives, real estate in America is one of the biggest sectors of the economy. Updates are provided daily on interest rates and listing prices, which help drive purchases and sales.

Besides the economic reasons, are the social ones. For many, homeownership is seen as a major accomplishment, something to be proud of.

It’s this combination that makes a person’s home their biggest asset and investment in millions of cases around the nation. For most, the home makes up the majority of a person’s wealth.

That said, according to Forbes1, homeownership is at a 19% low, with only around 65% of Americans making up this demographic. The article also say that a huge proportion – half – of homeowners don’t believe homeownership is the essential way to maximize their growth in today’s economic environment.

Considering that a person’s home makes up so much of their wealth and many don’t own homes anymore, this marks a considerable decline in the assets available to many Americans. For those who do, the return they see on that investment could be significantly diminished.

Because of this, many people have chosen to rent, rather than own. This helps them live a reasonably comfortable life while also having a little extra money than they might otherwise have to save for retirement.

For Many, Annuities May Be Able to Help

These conditions have led many seniors to push back their retirement further and further. Those who don’t push back their retirement are sometimes finding that they have to accept a lower quality of life than they’re used to.

Both of these less-than-ideal outcomes can be mitigated by implementing a few retirement strategies early in the game.

For this reason, annuities and other insurance products are becoming increasingly popular choices for seniors around the country. Annuities have the benefit of offering a guaranteed* income through the life** of the holder. These consistent payouts can often help seniors retire when they want with the lifestyle they desire.

*Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

** Some annuities may have a lifetime income guarantee as part of the base policy; others may have riders available for additional premium that provide this benefit.

1 Hopkins, Jamie. “Why Housing Is A Bad Long-Term Investment But You Should Buy Anyways.” Forbes, Sept 25, 2014. http://www.forbes.com/sites/jamiehopkins/2014/09/25/why-housing-is-a-bad-long-term-investment-and-why-you-should-buy-anyways/