The High-Class Problem That Comes With Home Equity

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A lot of money is tied up in people’s homes. Those who need to tap it most, however, may have the hardest time doing so. Paying a mortgage is a form of forced savings. If you want to stay in your home, you have no choice but to make each payment. That money — plus appreciation in the home’s value — now equals $31.8 trillion for all households, according to the Federal Reserve, more than three times what it was in 2012. Saving for retirement, on the other hand, is not mandatory. As a result, some homeowners end up with a lot of home equity but low retirement savings. Here’s the problem with that situation. A retirement account is relatively easy to tap, and you can do it quickly. Home equity? Not so much.