Despite HECM changes & cutbacks, more seniors stand to benefit eliminating their mortgage payments
To say that today’s retiree is not prepared to retire is an understatement. More American’s approaching retirement have little or no savings to fund their non-working years. Not surprising in light of fewer pensions, higher inflation and rising healthcare costs. Many find themselves unable to adequately invest for retirement struggling to cover their daily living expenses. However, one of those expenses can be a forced retirement savings plan- the home mortgage.
Since the post-depression era, American homeowners dutifully paid their mortgage throughout their working years while raising a family or paying for their child’s college education. Years later, many were able to participate in the rite of passage transitioning from work to retirement paying off their mortgage. The elimination of their largest expense allowed them to enjoy a modest but comfortable retirement. At this moment more seniors are waking to the reality of just how fragile their finances truly are. Much of this can be attributed to the shift away from company pensions to workers funding their own retirement accounts such as 401(k)s and IRAs, two recessions and higher costs of living. Many older Americans find themselves forced to work well into their golden years. In 2017 it was reported that over 9 million seniors 65 and older continue to work compared to 4 million in 2000. For older Americans, the fear of death often pales in comparison to outliving their money.
The good news is despite numerous product changes, millions of seniors stand to benefit using a reverse mortgage to…