Thursday, June 26, 2008
Home-price declines will eat into boomer retirement nest eggs: report
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 picture gets even worse if real home prices fall more. If prices, adjusted for inflation, fall 10% by 2009, the median household would see a 35% drop in wealth compared with the same age group in 2004; and if prices fall by 20%, there would be a 46% difference. Plus, many of these boomers are "going to be facing a mortgage payment well into retirement," Baker said. That's a shift from past generations: The major asset that most middle-income families in years past would bring to retirement was their home - and it was often paid off, the report noted.