How Homeownership Affects Retirement Readiness | Real Time Headlines

own a home That gives some people more confidence in their retirement prospects, but some experts say it could be misguided.

About 37% of polled workers — including those with part- or full-time jobs, or who are self-employed or business owners — say they are “ahead of schedule” (7%) or “on schedule” (30%) in their retirement savingsaccording to the “Your Money Retirement” survey performer SurveyMonkey and CNBC.com.

Of those who said they finished ahead of schedule or on schedule, 42% said start early Retirement savings helped them succeed. Other factors motivating them to be prepared include having little to no debt (38%) and home equity or ownership (37%), the report found.

The survey was conducted in August among 6,657 adults, including 2,603 ​​retired adults and 4,054 adult workers.

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But homeowners’ wealth confidence in their home’s value may be misplaced, said Angie Chen, senior research economist and assistant director of savings research at Boston College’s Center for Retirement Research.

“Homeowners are actually more likely to be overconfident in their retirement readiness,” Chen said. “There are a lot of misunderstandings about how to evaluate whether you want to retire early.”

Winnie Sun, co-founder and managing director of Sun Group Wealth Partners in Irvine, Calif., says owning a home can still help bring other benefits in retirement.

Here’s what to know.

The Center for Retirement Research’s National Retirement Risk Index measures the share of working-age households that are financially unprepared for retirement. CRR analysis when comparing 2023 individual household assessments to NRRI established 28% are “not worried enough” – meaning they don’t think they are at risk, whereas the index predicts they are.

“People who own a home but still have a lot of housing debt are more likely to be overconfident or not worried enough,” Chen said.

To better assess retirement readiness, “it’s important to consider not only the value of your home, but also how much money you borrowed,” Chen says, and how much you still owe.

For example: If you buy a house worth $500,000 and still owe $400,000, your equity is actually $100,000, she said. Leverage this equity Experts say loans aren’t always cheap and borrowing against your home can be risky.

“Housing is not really about mobility,” Chen said. “You might be happy to have this huge asset, but you can’t spend it in retirement. You can’t spend it in a way that you can spend and spend other types of savings.”

On the other hand, experts say there are certain benefits to owning a home.

“Owning a home is twofold,” said CNBC cast member Sun. financial advisory committee.

One, you’re establishing equity. Sun explains that when you sell your property — for example, if you downsize after retirement — you can access the money as a lump sum.

Plus, Sun said, while you own the property, “your housing costs are controllable,” which may include a fixed mortgage payment.

While the cost of home ownership is as home insurance Property taxes have increased in recent years, and you may qualify for premium pricing on utilities when you retire, Sun said.

“A lot of my clients, as they get older, they also qualify for premium pricing on their utilities,” Sun said. “So some of their costs may go down as they age.”

Although the house is not mobile, it may be Leverage your home equity If you need it, experts say.

“In most cases, for retirees, they view stocks as an emergency fund,” Sun said.