Home Equity Helping Single Seniors in Retirement

Inflation and the current economic climate have put a financial strain on older Americans, and new data from American Advisors Group (AAG) show that unmarried seniors are the most affected. To learn exactly why single seniors are struggling to afford their retirement years, AAG conducted the Modern Retirement Survey with over 1,500 participants ages 60 - 75.

"Single seniors face a lot of additional challenges, such as receiving only one Social Security income or lacking a second retirement savings, and that can make traditional retirement strategies less effective," said AAG Chief Marketing Officer Martin Lenoir. "For many unmarried seniors, their home is their most valuable asset, which is why we often see them utilizing their home equity to help fund their retirement. Especially in times of inflation, it's common for senior homeowners to take out a line of credit using a reverse mortgage to preserve their retirement portfolios."

The survey reveals just some of the difficulties senior singles are facing upon retirement:

Single seniors are less comfortable with their current financial state and have more desire to increase their cash flow. Forty-six percent of single seniors said they need to increase their monthly cash flow as compared to only 32% of married seniors. Single women answered the highest at 50%.
Single seniors struggle more to create the financial nest egg they planned to have saved. Forty-four percent of single seniors said they have less money than they thought they would have as compared to just 32% of married couples. Single women answered the highest at 45%.
Retirement plans have been less successful for single seniors. Thirty-six percent of single seniors said their retirement did not work out as planned, while only 23% of married couples answered the same. Single women answered the highest at 41%.
Traditional retirement strategies have worked less often for single seniors. Thirty percent of single seniors feel the financial advice they were given did not work out for them, while only 20% of married couples answered the same. Single women answered the highest at 34%.
Single and married seniors rely on different sources of income to fund their retirement. When given a list of options for primary income, the most popular answer among single seniors was Social Security at 39%. Married seniors selected pension as the most popular response, with 31% of couples claiming it as their primary income.
One commonality between married and unmarried seniors is the concern over inflation, with over 65% of each group expressing worry that it will negatively impact their retirement.

While Americans search for ways to increase their cash flow, senior housing wealth reached a historic high at a record $10 trillion, according to the National Reverse Mortgage Lenders Association. Through a federally insured Home Equity Conversion Mortgage (HECM) loan, more commonly known as a reverse mortgage, seniors aged 62 and older can access their home equity, eliminate their monthly mortgage payments and remain in their home long term.

Seniors who use a reverse mortgage loan to remain in their home long term are required to continue paying their taxes and insurance, maintain the home and comply with all terms of the loan. Be advised, a reverse mortgage is not a sound idea for everyone, so be sure to consult your financial advisor and local real estate expert to explore the viability of this option.