Study: home equity may not be enough

A new report issued by the Fidelity Research Institute cautioned Americans against relying too heavily on home equity as a significant source of retirement funding.

The institute is an independent organization within Fidelity Investments, the Boston mutual funds giant, and the institute's report is titled "The Equity You Live In: The Home as a Retirement Savings and Income Option."

The report analyzes how cyclical downturns in residential real estate, low historical investment returns relative to other assets, and over-investment in a home can together create a "risky scenario" for investors hoping to rely on their home equity as a primary income source in retirement, the institute said.

"While some experts have dubbed home equity a new leg on the retirement stool, next to Social Security, pensions, and personal savings, our research shows it's not likely to be the silver bullet for filling large funding gaps," Guy Patton, the institute's executive director, said in a statement.

Fidelity Investments gets a chunk of its business from selling financial retirement products to consumers, but an institute spokeswoman said that institute research is not influenced by Fidelity Investments' business interests.
(By Chris Reidy, Globe staff)