Just about everyone has concerns about money, income and retirement don’t they? Well, this is particularly true if you are an “older person” such as a senior.
10,000 Americans are turning 62 every day and most of them are financially unprepared for retirement and the costs of aging in the next several years. With “care giving” costs averaging $7,000 a month and increasing, a senior who does not have Long Term Care Insurance will most likely run out of money at some point to pay for caregivers.
And if it’s not the costs of medical expenses or care giving, it will simply be the costs of daily living and paying for normal monthly expenses. Plus, many seniors are carrying a large mortgage and can’t even consider retirement because they have a mortgage payment that needs to be made each month.
Financial advisers are learning about the power of using a Reverse loan as part of the overall retirement plan for their clients, as a method to leverage what the client may have accumulated in savings and investments.
This can very effectively extend the longevity of of their client’s portfolio for many years, which I have mentioned in previous posts.
Following is a summary of an article that was recently published in The Dallas Morning News column.
Reverse Mortgage Line of Credit: A ‘Powerful’ Retirement Tool
Posted ByJason OlivaOn October 26, 2015 @ 5:01 pm In News,Retirement,Reverse Mortgage | 1 Comment
“The line of credit feature on a reverse mortgage has garnered considerable attention lately for its usage as part of a coordinated retirement planning strategy. And for many people, a reverse mortgage line of credit can be ‘the most powerful tool,’ according to a recent The Dallas Morning News column.
A reverse mortgage line of credit can be especially valuable for retirees who own a nice house and don’t have any debts, but aren’t satisfied with their savings as they approach retirement, says syndicated columnist Scott Burns, who is also a principal of the Plano, Texas-based investment firm AssetBuilder, Inc.
“Indeed, if you are looking for a big lever, a reverse mortgage line of credit will be the most powerful tool available for many people,” Burns writes in The Dallas Morning News column.”
I will share the remainder of the article in the next post to this site.
The Cost of Transportation for Seniors
Most of us ( Especially those of us who regularly drive cars for our transportation) take for granted, that we will always be able to drive our cars for all of the various reasons that we are currently using them for.
However, there may come a time when we won’t be able to drive for ourselves as we age and our reflexes and other age related issues come into play, in our ability to hop in our car, back out of the driveway and go about our business.
Investment News recently published an article about the importance of calculating the costs of transportation that most Financial Advisers are missing and not even considering for their clients. And honestly, I hadn’t thought about it, either.
Here is a copy of a summary of the article, but I will also include a link to it as well.
The Critical Retirement Costs Many Advisers Aren’t Discussing With their Clients
October 18, 2015 By Jason Oliva for Reverse Mortgage Daily
When it comes to retirement planning, some financial advisers may not be discussing the most important costs their aging clients face, suggests a recent article from Investment News.
While housing and health care costs remain top of mind in retirement planning discussions, transportation is the second-highest expenditure for Americans age 65 and older, and is something advisers need to factor into a financial plan, writes Investment News.
“Helping a client or couple navigate their mobility needs in retirement is the new job of retirement planning,” said Joseph Coughlin, director of the Massachusetts Institute of Technology AgeLab and the New England University Transportation Center, in the article.
Whereas other expenses tend to decline later in life, many transportation costs are fixed, thereby giving them greater scale on the balance sheets of older Americans, Coughlin said.
Approximately 79% of seniors age 65 and older live in car-dependent suburban and rural communities, according to a report by Transportation for America, an organization that lobbies for investment in local transportation.
Despite the necessity transportation plays in a person’s life, a survey last year from the Insured Retirement Institute noted that only 66% of advisers discuss retirement lifestyle issues such as housing and relocation with clients.
“Advisers’ role is getting bigger and bigger,” said Mike Lynch, vice president of strategic markets at Hartford Funds, in the article. “It’s not just managing investments, but managing their lifestyle.”
Read the Investment News article.
Written by Jason Oliva
Reverse Loans are Bad, Aren’t They?
There was an interesting column that was written recently in Forbes that questioned why more seniors aren’t researching the benefits of using a reverse mortgage to extend their retirement funds.
I of course, have the answer.
It’s fear and the unwillingness to even speak over the telephone with a qualified Reverse loan consultant. I know, because I speak from experience.
The general public, professionals and the media that continues to churn out inaccurate stories of someone’s bad experience with the loan, is driving a mindless and inappropriate fear about them.
And this idiocy and ignorance is hurting the senior community, because they don’t know what to believe and because of “what they have heard”, they have an opinion that is solely based on hearsay and inaccurate portrayals of the Federal loan program.
The home is the biggest asset anyone has and for a senior, it can be used to help them extend any savings or retirement funds further into the future and pay for medical and caregiving expenses.
Using a reverse loan in lieu of drawing down on any savings or investments, is a smart decision.
Currently, people over age 62 retain $4.08 trillion in home equity. Yes, you read that and it’s a huge number, isn’t it?
But people get weird and defensive when you mention “reverse mortgage”, because of the bad things that they have heard about it
“The biggest hindrance: long-held misconceptions and miseducation of the reverse mortgage product in the eyes of the consumers”. Forbes
I have been a Reverse loan consultant for almost 14 years and it has been a continual struggle to develop consistent business because of the incessant, negative pounding that doesn’t stop.
However, I do feel that it has become less of an issue and there is more positive press than in the past, as professionals and the general public are becoming educated about why this is such a great retirement tool and a positive experience.
Costs have been reduced ( That was always a BIG objection) and with the new Financial Assessment in place, they are safer than ever.
And in closing, it may not be appropriate for everyone, but it’s great to have it as an option, wouldn’t you agree?