Times are changing and not necessarily for the better. There was a time when we could look forward to working for 30 some years and then retire. We could rely on a pension from our employer, some savings and Social Security. If we were lucky we would have minimal debt and good health. We could look forward to spending our retirement days travelling, enjoying our grand kids or our hobbies.
But not so any more for many seniors, especially those Boomers just entering their golden years. Many have found that their pensions have been dismantled by their employers, or like me, have bounced around too often to really development enough of a pension to rely on. Social Security is in trouble and can’t be relied on for more then another 20 or so years.
In an excellent article, Boomers’ Financial Future Spells: W-O-R-K, Doug Bates of the Oregonian, writes that many seniors will need to continue to work or go back to work to make ends meet. He quotes John Rother of AARP “we estimate that approximately two-thirds of early boomer households, who are aged 54 to 63, are financially unprepared for retirement — that is, they have not accumulated enough savings to maintain their lifestyle as they age. Meanwhile, their predicament is worsening with the fall in home values and stock prices that began in 2007.”
For many, working at least par time will be ok. It will keep them active, help them to meet their needs and stimulate the economy. But for those who were expecting to have a retirement like their parents, there might be a surprise waiting for them.
Just getting rid of their mortgage or debt would allow many to retire. This can be accomplished by accelerating their current payments, or using a Reverse Mortgage to eliminate their monthly mortgage payment. For others, it will be staying in the work force in their current jobs or finding another job more appropriate for their aging bodies.
Those who plan to stay in their current home for many years, and who qualify for a Reverse Mortgage, could find that a wonderful solution is to trade their current equity for a more comfortable retirement. They need to speak with an expert who will put their long term best interests at heart. A properly structured Reverse Mortgage can provide access to he equity and well as protect it. A poorly structured one will deplete the equity quickly and leave the senior with few options in the future.
For those who need to aggressively pay down their debt, or get better advice on retirement planning, a company like Financial Destinations, Inc (FDI) is a good alternative. FDI can provide a blueprint for paying debt off in a fraction of the time as well as access to CPA’s, Financial Planners, Atty’s, 24/7 access to a Physician, discounted prescriptions and an excellent investment product. For more information, visit www.MorrisEquityGroup.com or call me.
If you desire to help others become debt free and financially literate, there is an excellent income opportunity as well. This could be a great way to reduce your spending and increase your income in retirement, or as you approach retirement.
I think that everyone agrees that walking is good for our health. The problem often is doing it. Some of us really enjoy it, others find it boring and a waste of time. Or for me, it’s just finding the time or making it a priority. Once I get started I really enjoy it, but it’s a matter of getting started. My Doctor and wife tell me I need to and I agree….but….there is always something else I feel that I should be doing.
In a recent AARP Bulletin article by Lambeth Hochwald, Walking a Little Can Go a Long Way, she expounds on some of the merits of walking. Included in her list are:
1. It’s great for the heart 2. It cuts breast-cancer risks 3. It helps you sleep 4. It cuts down on aches and pains 5. It makes you happy 6. It keeps you slimmer 7. It staves off senior moments 8. It protects your bones
It’s a nice article, I encourage you to click on the link above and read it.
One of the things that make walking easier is to have a fun place to walk. A new website WalkScore.com has the ability to tell you how walkable your neighborhood is, or those around you. Plug in a city or address and see what’s available. Portland, OR is the 10th best city in the nation. Check it out below. You can also use it find places to visit while you are getting healthier.
What does this have to do with a Reverse Mortgage? Nothing, and everything. A Reverse Mortgage can help you financially stay in your home while walking can help you physically stay in your home.
Whether or not we are in a recession or just feeling the effects of inflation, the bottom line is things are more expensive then they used to be. And I’m not talking about nickle candy bars costing a dollar.
Gas is now over $4 per gallon and expected to keep going higher. This has affected almost everything we buy since it takes trucks to get most of our goods to market. One solutions seems to be to switch to ethanol. Many farmers have jumped onboard and are growing corn to sell for fuel. This has added to the rise in cost of food as less land is available for growing crops.
The end result is that most people are feeling squeezed by the economy and having problems making ends meet. Senior citizens are not immune to this either.
In a recent poll, AARP reports, in it’s June 08 Bulletin, that 69% of seniors age 50-64 indicated that they are finding it more difficult to pay for essential items like food, gas and medicine. 59% of seniors age 65 and older reported the same. The scary fact is that 26% of seniors age 50-64 and 19% age 65 and older have prematurely withdrawn funds from the retirement accounts. This is alarming!!
For those seniors who haven’t retired yet, this will drastically affect their ability to enjoy their retirement, or force them to work longer. For those already in retirement, pulling from the principle of their retirement accounts throws off track their retirement income. For many, the goal is to live off the interest and leave the principle alone.
Financial planners I speak with tell me that most of their clients have done a good job planning for retirement, but they couldn’t anticipate $4 per gallon gas and the trickle down impact of that. They are fearful for their clients future. For many, a Reverse Mortgage can provide a solution to this problem.
One of the benefits of the recent Real Estate boom was an unexpected increase in property values. For those who have owned their homes for more then 5 years, and didn’t pull the equity out, there has been an incredible increase in equity. This also wasn’t part of their retirement plans. The usual “expected” property value increase is 4-6%. Over the last few years we saw values increase in some markets by 25% or more per year for several years in a row.
I believe that many seniors can benefit from tapping into this unexpected gain to counter the impact of the current economic woes.
In Oregon, we are still seeing modest increases in most markets. More then anything, we are getting back to normal. Many of us however are sitting on a small fortune. The question is whether or not it can easily be accessed. Following are several ways:
Family Gifts or Loans - While this is probably the preferred method, many seniors will not ask their kids for money. Also, most of us are in the same situation. In order to help others we have to give up something ourselves. For many, helping their parents means delaying retirement themselves.
Home Equity Line of Credit- This is an inexpensive way to unlock the equity, but as you use it, you have to pay it back. The more you use, the larger your monthly payment will be. If you stop making a payment you risk going into foreclosure. If you know for sure that you will be selling you place within a year or two, this is still one of the best options.
Sell and move to a smaller home or condo - This can be a good solution if you truly want, or need to move, but it also comes with expensive closing costs on 2 properties and and you will leave many memories behind. This may also be your only solution if you don’t have a lot of equity in your property.
Reverse Mortgage - For many, this will be the best solution. A properly structured Reverse Mortgage will improve the quality of life for those who find themselves short of cash or concerned about the future.
These are just a few exanples of how a Reverse Mortgage can help you or your loved ones through these trying times.
My advise? Call me. Let’s discuss your options and see if a Reverse Mortgage is the best option.
Larry Morris, CMPS 503-476-3854
