More educated Americans stay in workforce longer
March 8th, 2011
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The more education people have, the longer they remain in the work force, according to the Employee Benefit Research Institute (EBRI). In 2009, 63.1 percent of Americans 55 and older with graduate or professional degrees were in the labor force, compared with 22.4 percent of those who did not have high school diplomas. Does that mean that people who had less education are more likely to need to tap home equity with a reverse loan during retirement?
Paying for retirement
Whether you have a lot of education or not, paying for retirement can be challenging. On average, people with more education earn more money over the course of a lifetime and may have more opportunities to build a retirement savings than people with lower wages. But as the economic crisis has shown, having a higher income doesn’t always translate into good fiscal habits. So it’s likely that senior homeowners of all income and educational levels will find themselves considering reverse mortgages if they continue to struggle financially.
Overall, the participation of people aged 55 and up in the workforce was at 40.2 percent in 2010, the highest recorded level since 1975. Many senior citizens believe that they must continue working as long as they are physically able in order to pay for all their expenses. If you are nearing retirement age it may make sense to stay at your job if you can. Doing so could allow you to save more money and enjoy a more secure retirement.
Reverse mortgages during retirement
If working longer is not an option, there are some alternatives you can consider, such as reverse mortgages. There are pros and cons to reverse mortgages so take time to learn as much as you can about them. To apply for a Home Equity Conversion Mortgage (HECM) you must meet with a reverse loan counselor who can review reverse mortgage guidelines.