Traditional Retirement Planning Is Failing Today’s Modern Homeowners Ahead of Their Golden Years

Americans are living longer, and while a longer life may seem ideal, the reality is that careful financial planning is required to sustain a lifestyle for 30 years past retirement.

Many adults, however, aren’t sure they are financially prepared to go the distance.

The Western & Southern Financial Group surveyed nearly 1,000 adults aged 30 and older about their retirement expectations and financial planning. Among the respondents, 35% said they expect to live to 90 or beyond, yet only 16% are planning financially for 30 or more years of retirement.

Retirement planning has already become complex, but owning a home in retirement introduces a unique set of challenges. Truth is, you’ll need to account for a significant number of bills even after the mortgage is paid off.

And without careful planning, you might not be able to keep your home at a time when you’ll need it most.

The reality of rising housing costs

Longer lifespans are fundamentally changing the question of when to retire. A 65-year-old has an average life expectancy of 86, and a 65-year-old couple has a 64% chance that at least one partner will live beyond 90. This stretches retirement from the 15 or so years common just a generation ago to nearly three decades today.

While global geopolitical tensions and fluctuating mortgage rates have affected consumer confidence right now, it is the rise of "hidden" costs that often makes homeownership unsustainable for seniors no matter what the country is going through.

For instance, while a property tax revolt may be surging across the U.S., most states continue to collect—and rates have risen across the board. Nationwide, the effective tax rate for single-family homes in 2025 was 0.9%, up from 0.86% in 2024. This marks the highest level since 2020, according to a recent property tax report from data analytics firm ATTOM. The average single-family home, now valued at $494,231, generated $4,427 in taxes—a 3% increase over 2024.

Meanwhile, insurance premiums are climbing as well. Home insurance coverage varies by policy, but aside from the value and age of a home, factors like climate change are increasingly influencing premiums.

Florida, a traditional hot spot for retirees for instance, has seen a massive spike in premiums recently.

"If you live in an area at risk for a disaster, you’ll pay insurance rates that reflect the level of risk. You could pay twice as much as someone in a low-risk area," Melanie Musson, home insurance expert with Quote.com, tells Realtor.com®.

"Many homeowners in the highest-risk areas find securing coverage at all a challenge, and some are forced to turn to state-sponsored insurance programs."

And that's just the start of their problems.

"Older homeowners could also struggle with insurance lapses or nonrenewal (increasingly common in high-risk states such as Texas, Florida, and California), HOA fees and special assessments, and deferred maintenance that compounds into uninhabitable conditions, any of which could ultimately cost them their home," adds Realtor.com senior economic research analyst Hannah Jones.

A significant retirement savings gap

The Western & Southern Financial Group survey found that 43% of respondents are not confident that their Social Security or pension benefits will last 30 years. Their fears are backed by data: Analysts at the Congressional Budget Office suggest that without congressional action, the Social Security trust fund will be depleted in 2032.

For many seniors, Social Security benefits are a critical component of retirement income. They account for about half (52%) of a retiree's budget, according to a report from the National Institute on Retirement Security. 

However, today, Social Security benefits alone are sufficient to cover living expenses in only 10 states, according to a Realtor.com analysis and the Elder Economic Security Standard Index.

More and more, financial experts are advising to save as much as possible for retirement, as soon as possible. The current "magic number" for retirement rose to $1.46 million in 2026, up from $1.26 million in 2025, a 13.6% jump, according to Northwestern Mutual's 2026 Planning & Progress Study.

“People are realistically adjusting their expectations to account for a more complex retirement landscape," explains Charlene Quaresma, wealth management adviser with Northwestern Mutual and founder of House of Q Wealth Management.

"With advancements in healthcare extending lifespans, funding a 30- to 40-year retirement requires significantly more savings than in previous generations.”

Leveraging your home to fund retirement

Interestingly, the Western & Southern Financial Group found that nonhomeowners (73%) expressed higher levels of concern regarding outliving their savings than homeowners (59%).

This confidence likely stems from the fact that homeowners know they can tap into their property for funds if necessary. In fact, 43% of respondents noted that if their savings fell short, they would downsize or sell their house to make up the difference.

While downsizing is a time-honored strategy, today’s housing market makes it more difficult. Mortgage rates remain high and inventory is low. Regions that were once "retirement havens" are now seeing insurance premiums so high, they are difficult to manage on a fixed income.

As a result, financial products like reverse mortgages or HELOCs are being touted as modern safety nets.

Data from the Federal Housing Administration and the Department of Housing and Urban Development shows that demand for federally backed reverse mortgages jumped 6.25% in the past fiscal year—a sharp reversal after two years of decline. That growth is expected to accelerate: The global market is projected to swell from $1.83 billion in 2023 to $2.71 billion by 2030, according to Grand View Research.

“People believe these products are for lower-income, desperate people ... but these products are actually for everybody who’s either entering or thinking about retirement and owns a home,” explains Chris Moschner, chief marketing officer of Finance of America, one of the country’s largest reverse mortgage lenders.

Having said that, older homeowners should understand the danger.

"Relying primarily on home equity as a pension supplement carries real dangers," says Jones. "Home values can drop precisely when you need to tap them, HELOC rates can climb with the broader rate environment, and reverse mortgages carry strict requirements that, if unmet, can trigger early repayment."

Perhaps the most surprising way seniors are using reverse mortgages today is to buy rather than simply borrow against their current home. Eligible borrowers can use the equity in their current home to buy another—often closer to family or in a more manageable location—without a traditional monthly mortgage payment.

“If you have sufficient equity in your current home, you can actually buy a new house without taking a dollar out of your bank account,” says Moschner.

But that may end up sounding better than it actually is.

"Zooming out, if enough baby boomers try to liquidate simultaneously, it could destabilize local housing markets," adds Jones.

"With Social Security facing potential benefit reductions, home equity becomes a backstop for a backstop, a fragile single-point-of-failure structure that also ties your financial health entirely to your ZIP code's economic fate."