Want financial security? Home equity and retirement accounts are key
It might seem obvious, even simplistic. But having home equity and retirement accounts are key to most families’ financial assets and — by extension — retirement security.
According to new research from the nonpartisan Employee Benefit Research Institute (EBRI), home equity and retirement accounts — 401(k)-type plans and IRAs — account for nearly all the assets that many families have to depend on in retirement outside of Social Security and traditional pension plans.
In its research, EBRI looked at the level of assets held by families with a working family head ages 25‒64 in so-called “individual account” retirement plans and compared those levels with all of their financial assets, as well as equity in their homes.
And what EBRI discovered was this: Families with individual account retirement plans and home equity will have something to draw from for retirement expenses, outside of Social Security, while those families without retirement plans won’t.
So, what might those saving for or living in retirement do or not do given EBRI’s findings?
For those saving for retirement. Sterling Raskie, a certified financial planner with Blankenship Financial Planning recommends that you start saving for retirement as early as possible using either an employer-sponsored plan such as a 401(k) or an individual plan such as an IRA.
And don’t worry if you’re not socking away as much as possible in your retirement accounts when you’re in your late 20s, early 30s. The EBRI research seems to suggest that you’ll build your nest egg over time. In fact, in the EBRI research, assets in retirement accounts represented 47.1% of all financial assets held in families with a working head of household ages 55-64.
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