This probably seems like an odd, if not rude, question. But with approximately 10,000 people turning 62 years old every day there is a swelling rank of seniors who must look at their long term desires regarding where they choose to spend their final years.
One national survey states that 62% of seniors want to remain in their home. With many seniors living into their eighties and beyond this means planning for a retirement period of 20 or more years.
Being that many seniors will stop working at some point in their sixties or seventies, this means a declining income during this phase of life. And for some it might mean a complete cessation of any income besides Social Security. Since many seniors are already faced with Social Security payments that do not allow them to meet their monthly budgets, there is a significant need for financial planning to offset this burden. And then, what about the kids? And grandkids? Many grandparents want to help their children and grandchildren financially. Sometimes seniors are in a position where they are cash poor and equity rich in their homes.
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For seniors who own their homes a very viable solution for managing finances during retirement years is a Reverse Mortgage. A Reverse Mortgage? Everyone knows the bank will take your house if you get one of those - not true. There are many, many myths circulating about Reverse Mortgages. To dispel one, when taking out a reverse mortgage the home always remains in the senior's name and passes to the senior's estate upon their death. How much equity is in the home at that point will vary depending on many factors, but any equity remaining in the home goes to the senior's heirs or estate upon their death.
Why can a Reverse Mortgage help with financial planning? Because it can free up funds normally used for mortgage payments, or health costs, college tuition for grandkids, or any other use the senior sees fit to use the money for. A Reverse Mortgage can provide financial freedom for seniors with equity in their homes, and will also allow them to 'age in place', meaning they can stay in their home until they choose to leave, or remain in their home until their death.
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Age in Place as a concept gives seniors the option to eliminate a monthly mortgage bill and divert those funds to in-home healthcare, housekeeping services, and any other services that will make their lives easier as they age. And for some, it will simply be the freedom of never having to make another mortgage payment as long as they live, and the ability to remain in the home they love.
A Reverse Mortgage is not right for everyone, but when looking at the long road, it's an option that should be reviewed as a financial management tool for the Baby Boomer Generation.
Have questions? Contact me and I will help you.
Angela Knight
