Homeownership: A Key to Well-Being in Retirement

There has been much talk about homeownership and whether it is a true vehicle for building wealth. A new report looks at the impact owning a home has on the financial wellbeing of people closing in on their retirement years (ages 55-64).

In recently released study by the Hamilton ProjectTen Economic Facts about Financial Well-Being in Retirement, it was revealed that:

1. Middle-class households near retirement age have about as much wealth in their homes as they do in their retirement accounts.

“Over the past quarter century the largest single source of wealth for all but the richest households nearing retirement age has been their homes, which accounted for about two-fifths of net worth in the early 1990s and accounts for about one-third today.”

2. Home equity is a very important source of net worth to all but the wealthiest households near retirement age.

“Home equity is an important source of wealth for middle income households, accounting for more than one-third of total net worth for the second, third, and fourth quintiles of the net worth distribution… The fifth quintile has a much larger share in business equity—almost a quarter—than any other quintile. (The figure leaves out the bottom quintile of households because they have negative net worth. It is likely that these households will rely almost exclusively on Social Security in retirement.)”

Here is an asset breakdown for the middle 20% of Americans determined by median net worth ($165, 720):

Components-of-Net-Worth

Obviously, the data again proves that homeownership has a big role in building wealth for American families.


207d5dda 44e0 473b bbb1 8e95c88fdfa4 cff8e78b 3117 4e11 91be d3f704dec972 1a108bc2 ff30 4c11 8c7e 14ca5859ace7 d001d79c d4a0 4fcc 801e 24cd407d5707 241e8717 5ec2 46fb a0b5 8024ff1e2a71 683d8c0b ab61 4312 8bc3 b566f042cf5c c7031ca2 c894 47e3 8849 68fd3d9a023d 7df6a173 dc2f 486d b672 4290d65b7808 b13116d6 c7bb 4da0 a7a9 b2b30a14e665 2615e1a6 e728 43c1 974a 256840c34697 65882c1b 38cf 4a01 b6d4 4111a1d8e39e bcf11c6b c114 43f0 b884 73492248f6d4 41f6e155 2c90 49a5 9aeb 8c75cbd31da9 a1da52ef 1e10 4b04 9541 f9ea14ab1f41 031c87cf 7ce3 4679 9d0d 28227aa37227 77357932 de14 41aa ab5d d2b962927c79 9e05bc63 43a6 4825 8fc4 34981711df51 597c6ee8 258c 45ba 946e 768d46a96ce7 baf7a54c d17b 435d 98d6 f8096b4c0550 22551e89 7589 41fc b965 0638cb3ba6cd d89ab762 9819 46ae 82de e0968617b947 d6756b78 a808 47e5 ba78 7633181e8300 c6b33066 df0a 414d b122 482a2b45af47