In its latest Retirement Outlook report, Vanguard projects 42 percent of Americans are on track to maintain their current lifestyle in retirement.
The report suggests that for individuals facing a retirement spending shortfall, one possible solution is tapping into home equity.
“Retirees could downsize to a smaller house, relocate to an area with a lower cost of living, sell the house and become renters, or use a reverse mortgage,” says the report.
Go deeper: Fiona Greig, global head of investor research and policy at Vanguard’s Investment Strategy Group, says the figure of 42 percent of Americans on track for retirement does not indicate that the other 58 percent is far off track.
- An American with the median income of $51,000 will have a retirement savings shortfall of only $5,000 annually. Greig says future retirees could “make up” the shortfall by working slightly longer, spending a little less in retirement and leaning on family, among other solutions.
