Approximately one-fifth of investors expect to dip into home equity to supplement their retirement incomes, says a new survey by Manulife Bank of Canada.
For example, 10% of respondents plan to stay in their homes and borrow against home equity, while 8% want to downsize.
Rick Lunny, president and CEO of Manulife Bank of Canada, says the fact that 20% of homeowners are proactively planning to use home equity suggests they’re struggling to balance saving for retirement with paying off debt.
Still, most respondents (81%) want to be debt-free when they reach retirement. The problem is confidence about reaching that goal was lowest among people between the ages of 50 and 59, and only 39% of respondents overall are optimistic about meeting retirement goals in general.
Even so, almost half of respondents (46%) say they’ll still retire as scheduled even if they have outstanding debt. In that situation, about a quarter (26%) say they’ll scale back their lifestyles until all debts are paid, while 10% will sell assets.
Interestingly, 25% say they don’t consider mortgage or vehicle loans as debts. So make sure to discuss what it means to be debt-free with clients.
MORE EQUITY INCOME.
Dynamic’s Equity Income team introduces four new funds designed to take advantage of opportunities in the U.S. and around the world to help deliver the income your clients need.
LEARN MORE >>>