Nov/Dec 2021 RMM

JOBS HAVE MOSTLY COME BACK, and the stock mar- ket has recovered from the initial shock of COVID-19. Nonetheless, the pandemic may leave a lasting mark on the retirement picture that Americans painted for themselves, potentially sparking a fresh look at reverse mortgages. In a spring 2021 survey by the Pew Research Center, roughly half of nonretired adults said the pandemic would make it harder for them to achieve their financial goals. Three in five, meanwhile, experienced job loss or wage cuts since the onset of the pandemic. Home values, however, continued to rise, meaning there is more equity in what for most people is their big- gest investment. Home prices in the U.S. rose 17.4 per- cent between the second quarter of 2020 and the second quarter of 2021, according to a quarterly report by the Federal Housing Finance Agency. In some cities and states, prices rose more than 25 percent, though they also had begun to slow to single digits in some of the most expen- sive markets, such as San Francisco, the agency said. In recent interviews, academics and reverse mortgage experts put some of those numbers into perspective and discuss how equity release products can help current and future retirees weather these events to secure a safe future. Bearing the Brunt The pandemic’s impact has been particularly severe on women, many of whom had to leave the workforce to care for young children or elderly parents. In a September 2020 survey, one in four women workers, or 24 percent, said their confidence in being able to retire comfortably had declined amid the pandemic, according to the Transamerica Center for Retirement Studies in Los Angeles, CA. “Many women are confronting pressing short-term priorities that may take precedence over saving for retire- ment,” Catherine Collinson, president and CEO of the center, says in a statement. “However, it is imperative that women safeguard their financial futures.” Women already start out behind men when it comes to retirement income, says Cindy Hounsell, president and CEO of the Women’s Institute for a Secure Retirement, a nonprofit in Washington, DC. The average annual Social Security benefit for retired women workers in 2019 was $14,952 compared with $18,816 for men, according to congressional testimony by Hounsell. Overall, retirement income for women over 65 is 30 percent less than it is for men, yet women tend to live lon- ger. Women also outnumber men in higher age brackets. Academics, Experts Talk Equity Release Reverse Mortgages Increasingly Gain Acceptance in Retirement Landscape By Joel Berg 18 REVERSE MORTGAGE / NOVEMBER-DECEMBER 2021