b'CHAPTER 3 | ECONOMIC PREPARATION FOR RETIREMENTFIGURE 3-4aTotal income of single and coupled households by age: 2003 Making Money Last $100,000 Households have a number of options to help maintain their standard of living in retirement.$80,000Products like reverse mortgages and home equity$60,000 loans allow them to access wealth held in housing equity, and long-term care insurance (LTCI) can$40,000 help prevent large OOPM expenses. Those who expect to be very long-lived face a greater risk$20,000 of running out of money before they die, and private annuity products allow them to convert$050-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90+ some or all of their wealth into a guaranteed income stream for life. Yet none of these financial FIGURE 3-4bTotal wealth of single and coupled households by age: 2003 products is particularly popular. HRS research shows that the strategy of holding onto assets as a form of self-insurance can make sense for some$600,000 groups. Other research provides insights into the conditions under which households can expect to$450,000benefit from these financial products.$300,000Housing equity is a large part $150,000of the retirement wealth $0 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90+ of Americans.FIGURE 3-4cTotal spending by single and coupled households by age: 2003Housing equity is a large part of the retire- $50,000 ment wealth of Americans that is often liquidated when homeowners experience health problems at$40,000 older ages or need long-term care. Davidoff (2009)explores the relative benefits of annuitization$30,000 and LTCI for those with more rather than less home equity. For both single and married house- $20,000holds over age 62 at the median, nearly 40% of$10,000 portfolio wealth is home equity. For nearly half of homeowners, home equity is twice as large as$0 non-housing assets. As one indication of the low 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90+Source: Hurd and Rohwedder (2010b). Singles Couples 63'