Retirement Weekly: Home ​equity may be a ​solution for ​retirees ​​battling ​​inflation

by | Oct 28, 2022 | Stock Market

​With inflation at a 40-year high, many Americans are struggling to make ends meet. Inflation can be particularly problematic for retirees, forcing some to tap their long-term investments much earlier than expected to cover the rising costs of living. In addition to rising costs, inflation has sparked unpredictable investment markets, record-high stock market volatility and rate increases by Federal Reserve this year. What’s more, most older Americans are not financially prepared for the rise in healthcare costs and the impact of inflation on Medicare benefits. The standard Medicare Part B premium will be 14.5% higher in 2022, meaning retirees will spend more money than ever on healthcare, leaving them with less to fund other aspects of their retirement.

Most of today’s retirees are facing financial challenges they didn’t account for when envisioning their golden years. For many, the financial plan they thought would carry them through will need to be adapted to cover rising costs. Those who are unable to increase their cash flow by returning to work or tapping another revenue stream are left with the option of selling investments at a loss. For the retirees who planned to fund their retirement lifestyle with interest income, what does the future hold? As clients raise this concern, it will be crucial to know how to articulate the strategies for using home equity to fill the financial gaps caused by inflation and a volatile market. Mitigating ​sequence of ​returns ​risk There is one bright spot amid the doom and gloom many clients feel when viewing their current retirement por …

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