As Gen Xers approach retirement age, many are facing a stark reality: they may not have enough saved to sustain their golden years.

A recent study from Bankrate revealed that nearly half of Gen Xers feel behind on retirement savings. And to make matters worse, many of them are house-rich but cash-poor.

According to the study, roughly seven in 10 Gen Xers own their homes, but accessing that equity is no easy feat. As housing finance policy expert Laurie Goodman explains, people are only doing cash-out refinances when they have no other choice. This often means they have lower credit scores and have already depleted their other sources of cash, such as savings.

And it's not just Gen Xers (43 year-olds to 58 year-olds) who are struggling. The first half of 2023 saw a decrease in overall refinances, but of those who did refinance, a staggering nine in 10 were cash-out refinances, according to Freddie Mac.

So why are people tapping into their home equity? In many cases, it's to consolidate debt. Roger Moore, CEO of Loan Pronto, notes that this is a major reason for using home equity. Others are choosing to renovate or expand their current homes instead of moving.

But even for those who want to move, the high fees associated with unlocking home equity can be a major barrier. In cities like Denver, where real estate agents are seeing an influx of clients using their home equity to purchase their next home, the fees can significantly increase mortgage rates.

However, there is a solution for those with good credit scores. People with a credit score of 700 or higher can utilize HELOCs (home equity lines of credit) or HELOANs (home equity loans) to access their equity without incurring higher rates on their primary mortgage.

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It's a tough situation for many Gen Xers who are nearing retirement age. As they watch their home equity continue to grow, they are unable to tap into it without facing high fees and potential financial struggles in the future.