It's no secret that Americans are largely unprepared for retirement. But according to some financial advisors, they could be improving their financial standing significantly by factoring in home equity into a comprehensive retirement income plan.
Reverse mortgages give seniors who are at least 62 years old a way to convert their home equity into cash. Given that for the average American, 75 percent of net worth is tied up in their homes, it makes sense to use them as a retirement asset, some in the financial-planning community argue.
"People are coming to retirement, and they don't have much," said Jamie Hopkins, associate professor of taxation at The American College of Financial Services. "They have their home, Social Security and a little bit of savings. Why not use the home equity?"