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Market Watch - Boomers turn home equity into 401(k) funds

They are borrowing against the equity in their homes at low rates and then investing the money in tax-deferred accounts, according to the co-authors of a new study, “Financial Sophistication and Housing Leverage among Older Households,” scheduled to be published in the Journal of Family and Economic Issues.

In other words, these people, mostly baby boomers, are getting a tax break on both sides of the deal, according to Hyrum Smith, an assistant professor at Virginia Tech’s College of Agricultural and Applied Economics; Michael Finke, an associate professor at Texas Tech University; and Sandra Huston, who is also an associate professor at Texas Tech University.

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