Boomers and Seniors Financial Insecurity

The news out of Washington to resolve the nation’s debt ceiling continues to drag on due to the inability for the Republicans in the House to come to a majority vote to pass their proposal, which as we all know will not get passed in the Senate.

What a mess and the financial markets are negatively reacting to this continued uncertainty as to whether or not the country will be able to pay their bills next month.   And if this does happen, this may mean that Social Security checks will not be going out to seniors which is unthinkable.  And now the latest figures are indicating that the Boomer generation is very worried about their financial future as well as their retirement funds have dropped to such low levels, that they will be unable to retire.

My personal feeling is one of frustration but I do feel that in the future the importance and value of Reverse loans will finally gain some respect.   As the population ages into the future, more people will make a Reverse mortgage part of their over-all financial plan & will be simply become another option for additional funds to live life and pay the bills each month.

Following is the remaining portion of the article that I posted yesterday:

Percentage of Economically Insecure Senors Surges to 75% and Counting

“Not only are 36% of seniors economically insecure, but also 40% of seniors are classified as financially vulnerable, meaning they’re neither secure nor insecure, for a total of 76% of seniors in what IASP calls an “economically precarious position.” And minorities have been hit especially hard, with 52% of African-Americans and 56% of Latinos experiencing economic insecurity.

Nearly half of single female seniors are at risk, too, at 47%, as women generally outlive men and thus face a higher chance of outliving their resources. This, says IASP, is especially true since women generally earn less than men and often spend less time in the workforce due to raising families and fulfilling caregiving duties.

In order to alleviate and even reverse these trends, says IASP, action must be taken. However, contrary to some proposals to “dramatically alter” Social Security or Medicare benefits, IASP says it’s better to work on policies and interventions designed to reduce expenses and boost income.
Suggestions along these lines include increasing asset-building opportunities throughout the life-course, expanding low-income housing options for seniors, and strengthening Social Security for vulnerable groups.”

By Elizabeth Ecker Published in Data, News, Reverse Mortgage 7/26/2011

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Financially Insecure Seniors

These are the most difficult times I have ever seen our country experience and no one is immune to the financial and economic insecurities that our nation is struggling through at this time.   Every day it seems as though we only hear more bad news…layoff’s, mass murders, another politician being exposed for some sort of sexual impropriety, climate change and on and on it goes.

I would prefer to post something cheery and encouraging here, as we all need something to make us laugh a little and put a smile on our face.   However, we are pretty powerless over the events that are unfolding each day and it simply comes down to ourselves and our families to make the most of where we find ourselves.

Some may find having those options more unlikely, especially if you happen to be a senior citizen.   More bad news….I am going to re-post and article in two parts that discusses the latest findings regarding how many seniors find themselves very, very financially insecure.

Percentage of Economically Insecure Seniors Surges to 75% and Counting

July 26th, 2011  |  by Elizabeth Ecker Published in Data, News, Reverse Mortgage

“Circumstances for retired seniors have gone from bad to worse, according to a July 2011 Research and Policy Brief, as household budgets are increasing while household assets drain away. The Institute on Assets and Social Policy (IASP) released a brief titled From Bad to Worse: Senior Economic Insecurity on the Rise, which examines the economic security of seniors and an increasingly common fear of outliving resources.

Declining household assets, inadequate household budgets, and increasing housing costs are the three main trends driving economic insecurity, says IASP. The number of households experiencing financial burden due to increased housing expenses rose to 50% in 2008, defined by the federal standard as 30% or more of a senior’s annual income going toward housing. And although many seniors have equity in their homes, says IASP, many of those homes require extensive—and expensive—maintenance, while other seniors are renters and don’t own their own properties.

Additionally, retirement assets are no longer as substantial as they once were, especially with the shift from defined-benefit plans to defined-contribution plans, and many senior households end up with a negative balance after taking care of necessary expenses.

Overall, economic insecurity among senior households experienced a notable rise from 27% to 36% between 2004 and 2008, the IASP found through using the Senior Financial Stability Index. And, says IASP, this began to happen even before the Great Recession, leaving the concern that seniors’ future prospects may get even worse.”

I will post the remaining part of this article on 7/29/11


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HUD and a Homeowners Assistance Program

As the nation continues to stumble through the housing crisis, the government is coming up with another program that might be of help to people who are struggling with making their mortgage payments.

It seems that HUD Secretary Shaun Donovan has announced that they are working in conjunction with NeighborWorks America to launch this program in a limited number of states.  And those who are lucky enough to live in one of them , might be eligible for a loan up to $50,000 that could be used to pay part of the homeowners mortgage payment.

Here is the article for further information:

HUD Launches $ 1 Billion Homeowner Assistance Program/ Written by Brett Varner

“As the government debates ways to reduce the size of their involvement in the housing finance market, HUD announced the launch  of a $1 billion assistance program designed to offer interest free loans to borrowers who are at risk of foreclosure.

The program, called the Emergency Homeowners’ Loan Program (EHLP) has been made available in 27 states and Puerto Rico. It offers interest free loans up to $50,000 to pay a portion of their monthly mortgage payments for up to two years.

“Through the Emergency Homeowners’ Loan Program the Obama Administration is continuing our strong commitment to help keep families in their homes during tough economic times,” said HUD Secretary Shaun Donovan. “Working with our community partners across the nation through NeighborWorks® America, we are pleased to launch this program today in 27 states and Puerto Rico to help families keep their homes while looking for work or recovering from illness.”

HUD expects the programs to help about 30,000 distressed borrowers with an average loan amount of $35,000.

Considering that the majority of homeowners who have their mortgages modified re default within a short period of time, adding additional debt to distressed homeowners, even at an interest free rate, may merely delay the inevitable and lead to significant losses of the $1 billion allocated to the program.”

Obviously this won’t make much of an impact on the overall level of foreclosures but if you are the “one’ that is lucky enough to take advantage of the program, it certainly will make a difference in your life, wouldn’t it?

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National Council on Aging

A recent article by NCOA discusses Pres. Obama’s White House budget and how it will effect the senior community due to proposed cuts of 45% in the Community Service Employment Program.

For many seniors, they are using these extra funds from part-time employment to maintain their ability to survive from month to month and without them will experience severe difficulties in paying for their day to day needs.  And on top of this blow, more will come from each state as they look for ways to cut back on spending by eliminating some programs that seniors have come to rely upon.

As much as some seniors don’t want to consider using a Reverse loan to stay in their homes and self-fund their costs of living, they at least have this as an option to increase their cash flow. 

Seniors need to get past their fears about the myths concerning the loan program and take advantage of the free HUD counseling that is available as of this post & find out how a Reverse loan can help them.

Once they have done some research from reliable and credible resources, will they be in the position to decide if using one is right for them.

NOCA:  Obama Budget Slashes Jobs for Low Income Seniors

“Spending cuts included in the White House Budget released this week ”would drastically slash initiatives that empower older Americans to sustain their health and economic independence,” according to a statement from the National Council on Aging (NCOA).

The organization points to a proposed 45% cut in the Senior Community Service Employment Program, which it says is the only major jobs program targeted toward helping disadvantaged older adults who need to remain in or return to the workforce to avoid financial crisis.

The program serves the extremely low income population, and NCOA says the proposed budget cut would lead to the loss of 55,000 part-time jobs, as well as struggle among thousands within the senior demographic who need to remain employed.

“At a time when Democrats and Republicans are both talking about jobs, it just doesn’t make sense to cut the only jobs program for seniors,” said Jim Firman, president and CEO of NCOA. “The unemployment rate just went down in December as 36,000 new jobs were created and now the Administration wants to give them right back.”

Among other points in the budget aimed toward seniors, NCOA expressed disappointment in response to a proposed cut from the the Low Income Home Energy Assistance Program (LIHEAP) budget by almost half, and praise for continued funding for family caregivers under the Older Americans Act.”

NCOA is one resource for home equity and reverse mortgage counseling for seniors.

Written by Elizabeth Ecker

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