Most people are completely unprepared to pay for any costs associated with “care-giving” because it never occurred to them that at some point in the future they may very, well need help as they age.
And unfortunately if you haven’t purchased a LTC policy by the time you are in your 50’s, the premium will be very expensive later on, especially if you have developed some health issues and qualifying for the insurance will now be difficult and or too expensive to obtain.
Everyday a senior experiences either a fall, a stroke or a medical procedure that will require nursing and help of some sort within the home and since few people have purchased Long Term Care Insurance, they and their family will find themselves in a crisis to come up with a solution.
If the senior has a substantial amount of money they have saved over the years, they could use it to pay for their care but if they don’t then maybe it will be the adult children who will have to use their own funds to cover the expenses associated with hiring a service to take care of the family member who needs it.
And a very frightening fact is that 70% of those who are 65 or older will have some sort of situation happen where they are going to need help and they won’t have any way to pay for it.
Typically it becomes the responsibility of a family member and the burden of that responsibility is extremely difficult as it up ends the family dynamic, the caregiver is unqualified to care for the parent and their own life becomes overwhelmed and in some cases, they develop serious health issues of their own due to the ongoing stress of being a caregiver.
An excellent option for the entire family is to use funds from a Reverse loan to pay the costs, plus any cash reserves the senior and their family may have, will be protected from being drawn down and the real fear of running out of money is eliminated.
I have found that more Financial Advisors are suggesting this alternative to their clients and families in lieu of drawing down on their investments and possibly experiencing tax consequences and it is an excellent solution to use to pay for the care-giving expenses and removes the fear and stress a family is experiencing when they don’t have the funds to pay for the services that are needed for the family member.
Funds from a Reverse loan is an excellent option to consider to cover these costs and relieve the worry and burden the senior and their family.
I have been a Reverse Loan Consultant for almost 17 years and until the last five or so of them, most articles that discussed reverse loans and media pieces were not only incorrect but very negative and certainly created the wrong impression and more than likely, turned off a number of seniors who could have benefited from using it to provide additional income.
However, we in the reverse loan industry have seen quite an “about face” in the last few years and more and more positive and encouraging articles and media news are promoting the benefits of the FHA HECM reverse loans to the public.
After taking a “beating” for too many years, each day seems to have another article or something on the news that not only is more often correct than it was in the past, but is seriously letting people know that a reverse loan is a good option to use in lieu of drawing down on a retirement fund.
In particular, the Boston College Center for Retirement Research has published a number of studies over the last few years, pointing out the reasons why seniors should not rule out using a reverse mortgage as part of their retirement plan.
And just recently they published a new report addressing the reasons why some seniors are resistant to the idea of using their equity in their home to sustain their lifestyle and to pay for any unplanned medical expenses and that their reasons are not “rational”.
I’m going to share a summary of their findings in the next few posts.
My previous two posts share information from a study that was completed this year by the Harris Poll for Northwestern Mutual to investigate how many Americans will be prepared to retire and what are their concerns about the possibility of outliving their funds?
Social Security provides an iota of money each month to seniors but certainly not enough to pay ongoing cost of living expenses, medical expenses or caregiving costs and if the senior doesn’t have a pension or other funds to use, what are they going to do?
New Study Underscores Retirees’ Need for Non-Traditional Funding Sources
Posted By Jason Oliva On June 7, 2016 @ 5:32 pm In News,Retirement,Reverse Mortgage
“Non-retirees also plan to rely upon Social Security less than their retired counterparts, with 35% of non-retired Americans expecting this benefit will be their sole or primary source of retirement income, compared to 49% of current retirees.
Social Security is often one of the main sources of income for people over age 65. But this stalwart asset, which has long been considered one of the three legs of the traditional retirement stool, may soon face depletion by 2034, according to the Security Board of Trustees for the Social Security Administration in a report submitted to Congress last summer.
But while there has been some talk that reverse mortgages could support the traditional retirement stool, joining Social Security and personal savings as defined benefit pensions become increasingly less common, the acceptance of using housing wealth as a retirement funding source is hobbled by a widespread apprehension to borrow against home equity.”
American seniors currently retain over 12 trillion dollars in home equity and honestly? In spite of the fear and misunderstanding of the Reverse loan, it will come to the rescue for many seniors and their families.
They are now affordable, even a No Costs version is available, non taxable because it’s not income, they continue to own their home, it never goes to the “Bank” and its very, very safe.
But then again, I am a Reverse Loan Consultant…..