Will Home Equity Help Inflation Woes for Retirees?

For adults with living parents, many are concerned that rising inflation is hurting their parents’ retirement.

According to the American Advisors Group, 62% of adults, aged 40-55, said they are worried that today’s inflation is having a negative influence on their parents’ financial status. Forty-three percent said they are worried about their parents’ finances and 35% are concerned that they will end up having to help their parents financially.

However, home equity may be beneficial to their parents as they age. Sixty percent of respondents said they would like their parents to use their home equity to help in their later years if they do not have enough savings. Half of respondents said their parents’ home had more monetary value than sentimental value to them. Yet, more than three-quarters said they have not yet discussed home equity with their parents and nearly half (44%) said they have not discussed finances about the home with their parents.

Will more homes be entering the market thanks to these aging parents? Perhaps. Half of respondents said their parents would be moving into their property as they age out of their own home, but 55% said they are not ready financially to take care of their parents. Nearly 60% said they could not afford for their parents to live in a nursing home or have assistance in their home. Forty-four percent said they do not feel prepared emotionally to take care of their parents in their later years. About three-quarters (74%) would prefer their parents stay in their own home as long as possible, as opposed to moving to assisted living.