How a Reverse Mortgage May Help You in the Retirement Crisis

Retirement CrisisThe United States Senate reports that “As a country, we are woefully unprepared for retirement. Half of all Americans have less than $10,000 in savings and nearly half of the oldest Baby Boomers are at risk of not having sufficient resources to pay for basic retirement expenses and healthcare costs.

The Center for Retirement Research at Boston College estimates that our “retirement income deficit” is $6.6 trillion. That number represents the gap between pension and retirement savings that American households have today and what they should have to maintain their standard of living in retirement.” This is not only a major issue for seniors, but also for their families who may be responsible for caring for them.

After a lifetime in the workforce, many retired seniors are having trouble making ends meet and affording basic living expenses. According to the report: “In 2010, nearly six million Americans aged 65 and over were living in poverty or near-poverty. By 2020, that number is expected to increase by 33 percent.

Given that an increasing number of older people are reaching retirement age without income to supplement Social Security, we could see even higher poverty rates in the future.”

Many seniors will be forced to make difficult decisions regarding their finances if their retirement savings are not enough. This could mean moving to a smaller home or choosing not to receive medical care in order to save on expenses.

A reverse mortgage loan could be a good financial solution for those ages 62 and older that either own their home outright or have significant equity in their home. Reverse mortgage loans require that homeowners live in their home as their primary residence.

Loan proceeds can be used for a variety of needs. Many borrowers use their loan funds to pay for medical bills, travel or making home improvements.  A reverse mortgage loan requires borrowers to continue paying property taxes and homeowner’s insurance and maintain the home according to Federal Housing Administration guidelines.

The loan becomes due when the home is sold, the borrower moves out of the home as their primary residence or the borrower passes away.  Typically the home is sold to repay the loan.

For more information about reverse mortgage loans and how one could help you live a more financially secure retirement, call 800.976.6211.