A recent study shows that baby boomers may not be able to rely on their home equity as a source of retirement funds. Market Watch reports:

“The collapse of the housing bubble will likely have drastic implications on the wealth and retirement of certain baby boomers, according to a report Tuesday by the Center for Economic and Policy Research.

The median household headed by those between 45 and 54 in 2009 will have about 25% less wealth than the median household of that age in 2004, according to the report. That household’s wealth will decline to $113,268 in 2009, from $150,113 in 2004.”

This is bad news for homeowners who were relying on their equity to cover many years of living expenses. Instead of saving, many intended to take out home equity lines of credit (HELOCs), sign up for reverse mortgage programs, or sell their property and live off the proceeds. Unfortunately, these home equity methods cannot be counted on - especially in the face of the housing bust we’ve seen recently.

See Also: How to Qualify for a HELOC

Tags | Heloc, home equity line of credit, mortgage crisis