August 2012

The Journal of Financial Planning

As Rodney Dangerfield used to say, ” I don’t get no respect”.   Well, that seems how its been for Reverse loans, too.   They have had such an image problem for a long time because most people fail to understand exactly what they are and how they function.

The financial advisor community has remained steadfast against them because they feel that seniors “wealth” will not be protected.   But if used correctly under certain circumstances, they can extend a client’s “principal” by approx. 2 years or more.

A recently published article by The Journal of Planning discusses the benefit of using a “Standby” Reverse ;mortgage.

Please read it below:

Financial Planning Journal: “Standby” Reverse Mortgage Helps Retirement Success

An article on “Standby” reverse mortgage use as a retirement strategy was published this week in the Journal of Financial Planning. The article, based on research done at Texas Tech University, considers a Saver reverse mortgage as a risk management tool for retirement saving.

The Home Equity Conversion Mortgage (HECM) Saver, used as a “standby” reverse mortgage, the research states, increased retirement portfolio survival rates significantly.

With Saver benefits spanning a lower cost, non-cancellable line of credit, borrower control over when and if the credit line is used and the ability to repay the loan at any time without penalty, the loan offers “unique and attractive features,” the authors, including Dr. John Salter and Harold Evensky write.
“We find this risk management strategy improves portfolio survival rates by a significant amount. The improvement in survival rates is attributable to the mitigation of the volatility drain—the risk of having to sell investments when depreciated,” the research states.

The Saver strategy was used in 1,000 simulations testing its efficacy as a retirement savings strategy, using the credit line against a cash reserve bucket under different withdrawal and debt preference scenarios.

“The main conclusion of this study is that HECM Saver reverse mortgages do have a place in mainstream retirement distribution planning, and have a significant impact on the probability that some clients will be able to meet their predetermined retirement goals,” the authors write.

“Updating plans during prolonged bear markets or severe market drops, along with this strategy, has the possibility of further increasing this chance of success.”

If you wish to read the entire study, please click here:

 

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Caregiver Burnout

As mentioned in my previous post, I would continue to share an excellent article regarding how to survive caring for your Senior parents and how to watch for the indications that you are on the brink of burning out from the unrelenting responsibility.

This article was provided by Viki Kind, MA a clinical bioethicist, medical educator and hospice volunteer.

http://thecaregiverspath.com

viki@kinethics.com

Part II
Are You in Caregiver Burnout?

Here are just some of the signs of caregiver stress and burnout: feeling physically exhausted, emotionally overwhelmed, anxious, hopeless, angry, depressed, isolated, mentally drained, lonely and frustrated. You may be too tired to make the effort to do the things you used to do for yourself or your loved one.

You might be getting ill yourself. You may feel as though nobody is listening to your concerns. You may want to lash out at your co-workers or your friends and family.

Why Do Caregivers Burn Out?

•Caregivers may not be able to sleep because their loved ones are up all night.
•Caregivers may not have the necessary training to offer the care that is needed.
•Caregivers may be physically doing more than they can.
•Caregivers may have to quit their jobs to stay home with their loved ones.
•Caregivers may go bankrupt because of increasing expenses.
•Caregivers may feel guilty if they take time out for themselves.
•Caregivers may feel that they should be strong and not need any help.
•And caregivers usually don’t ask for help.

Unfortunately, by the time you need extra help, you may be too tired, emotionally fatigued or depressed to ask for it. You have to get a support team in place when you begin caregiving so that you don’t get to your breaking point. Start planning ahead of time, before you need the help.

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Caregiving and Your Senior Parents

I never intended this site to be limited to the discussion of Reverse loans but also be a resource and platform that would allow others who specialize in the Senior market, to share valuable information, that otherwise may be difficult to locate.

And one difficulty  for the adult children is that of their aging parents and how best to help them through this life process, treating them with respect and at the same time, maintaining their own sanity.

I will be posting the following article that has been provided by Viki Kind, MA, discussing this very issue.   Because of the length of it, I will share it within three different posts over the course of the next seven days.

About the Author: Viki Kind, MA
Viki Kind is a clinical bioethicist, medical educator and hospice volunteer. She has lectured across the United States teaching healthcare professionals to have integrity, compassion and to improve end-of-life care through better communication.

Patients, families and healthcare professionals rely on Viki’s practical approach to dealing with challenging healthcare dilemmas. She has also been a caregiver for many years for four members of her family in the Los Angeles area.

http://thecaregiverspath.com

viki@kindethics.com

Part I

This is an edited excerpt from “The Caregiver’s Path to Compassionate Decision Making – Making Choices for Those Who Can’t,” pp. 107-110, by Viki Kind, MA, (2010, Greenleaf Book Group)
Savvy Caregiving —Getting the Support You Need

I was the caregiver for a number of family members for many, many years. Sometimes I could manage just fine. But at other times I felt overwhelmed and unappreciated. Even when I knew what to do, I was still exhausted and worried all the time. All I wanted to do was to crawl into bed and just sleep.

Even though I wanted to take care of the seniors in my life, sometimes it all became too much. I admire professionals who take care of those who are disabled, sick or dying every day. But I also know it comes at a cost to the person doing the caregiving. So, let’s talk about the signs of caregiver stress and then discuss ways you can ask for help. (Help is out there, even if it doesn’t come from your family.)

 

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