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Ecology of Money

Is the 'Fourth Leg' of Your Retirement Stool Wobbly?

Investors can no longer rely on home-equity growth as part of their retirement plans, writes contributor John Wasik.

For many retirees, home equity has traditionally been a steady fourth leg of their retirement stool. In the past, growing home values could prop up one's total wealth when the other legs (Social Security, pensions, and savings) appeared wobbly.

But changing demographics, the housing crash of 2008, and the future of U.S. residential real estate are leading many to reconsider how to view home equity in a retirement plan. That fourth leg of home equity may not be all that sturdy for future retirees, who number some 44 million between the ages of 50 and 60.