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Released: August 04, 2011

Loss of home equity downsizes retirement for many

Source: Sandra Block, USA Today

Paul Trigili, an information technology professional in Las Vegas, is 65, has back problems and would like to retire at the end of the year. There's just one thing standing in his way: his house. Trigili bought his home three years ago for $350,000. At the time, he thought it was a good deal, because the home originally was priced at $450,000. Today, it's valued at $184,000. Trigili made a large down payment when he bought the home, so he doesn't owe more on his mortgage than the home is worth. But his plans to sell his home and use the proceeds for retirement income have been placed on indefinite hold. Nearly 32% of adults over age 50 say their home has declined substantially in value over the past three years, according to a survey by AARP. Many won't recover those losses by the time they reach retirement age, says Jay Butler, associate professor of real estate at the W.P. Carey School of Business at Arizona State University.

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