Here’s how many Social Security recipients have their home paid off


The Social Security Administration’s report provides a treasure trove of data


What do the vast majority of age-eligible potential homeowners have in common? Social Security and for most it’s the linchpin of their retirement security.




With The Senior Citizens League reporting over 40 percent of retirees rely solely on Social Security benefits to survive, it is no surprise that 62% of program recipients report they are dissatisfied with their 2024 3.2% cost-of-living adjustment. Next year’s cost-of-living-adjustment may be disappointing as well. The projected cost-of-living adjustment for 2025 will be only 1.75 percent, a significant decline from the 3.2 and 8.7 percent increase in 2024 and 2023.




While Social Security benefits are adjusted annually based on the percentage increase of the Consumer Price Index (CPI) the accumulated cost of living far exceeds any boost in monthly payouts. We covered some of this in last week’s episode which exposed the CPI lie.




A survey from Atticus found nearly two out of five respondents plan to return to work due to the modest 2024 COLA increase. One 65-year-old woman responded to the survey saying, “Utility, insurance, heating, and food costs have risen 8-14% in the last year. The 2024 COLA doesn’t offset these rising costs”.




A 75-year-old woman said, “My medical insurance supplement nullifies the Social Security increase. The spike in food prices hits hard, especially for those relying solely on Social Security.”


Nadia Vanderhall, a financial planner at The Brands and Bands Strategy Group, told Newsweek, “Even though people can be within retirement for over 30 years, Americans are living longer while things are becoming more expensive.”




In response to the pressures of inflation, older Americans are making financial changes to cope with the higher cost of living. 64% are cutting back on their discretionary spending. This typically means less dining out or shopping. However, even more painful are the 36% who are cutting back on daily essentials. Consequently, older Americans are cutting back on groceries, medications, or healthcare visits.




Could a reverse mortgage provide some much-needed cash flow? Could these cash-strapped Social Security beneficiaries find relief by tapping into their home’s value?




To answer that question we look at the 2021 bulletin Housing Expenditures of Social Security Beneficiaries from the Social Security Office of Retirement and Disability Policy. The report data comes from Census Bureau data that surveyed households with at least one person receiving Social Security. Here’s what they found as of 2018. Renters accounted for 32.5% of Social Security recipients. Homeowners with a mortgage balance represented a median share of 25% of households, and only 12% owned their homes free and clear.


What HECM Pros Should Know About Inflation

There’s one conversation that every financial advisor should have with their clients. A conversation that should also be explored by reverse mortgage professionals with every potential borrower. Inflation. Questions such as “How are you coping with the higher price of everyday goods and services you’re paying today?” can reveal a cashflow crunch that needs to be addressed.

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Don’t Believe the CPI ‘Lie’


The CPI sleight of hand

Yeah! The consumer price index for January only increased 3.1% higher than one year ago! Is this reason to celebrate? Not necessarily. Welcome to the wretched inflation ratchet- note not ‘racket’ although some may beg to differ.

When it comes to inflation the Federal Reserve’s mandate is to keep the annualized rate at two-percent or lower. This works well in a modestly-expanding economy as long as wages and retirement benefits  increase by roughly  the same amount. A lower the annual rate of inflation makes it more likely higher wages will offset the difference in the consumer’s purchasing power. 

However, after two years of inflation well above the Fed’s target and beyond any Americans wage increases the pain is felt. Many are beginning to ask if inflation is only 3.1% why don’t they feel the ‘improvement’. 

The answer lies in the dirty little secret about inflation few financial pundits will discuss. 


Welcome to the inflation ratchet

The secret is while the annual rate of inflation has dropped considerably from it’s high of 9.1% in June of 2022, the cost of most goods and services remains well above their prepandemic levels. This has carved out a large part of middle class wealth and decimated retiree’s casfhlow Unfortunately, most consumers find themselves attached to 2021 wages with 2024 prices eating away at their pocketbook. 

Much like a ratchet, gains in the rate of inflation are ‘locked in’ with higher prices becoming the new norm. The future growth of inflation is added to the existing inflated cost of goods and services. While the rate of which the ratchet advances may have slowed the higher prices of 2021-2023 become the new baseline for American consumers.

For example, on average Americans are paying 25% more for their groceries. The price of a eggs has fallen from it’s high of $4.82 a dozen in January 2023 but remains 71% higher than they were just three years ago. The price for a pound of bread is 25% higher than it was in January 2021. 

But what about the GDP?!

Today, despite the problematic effects of inflation, many financial pundit are touting the positive GDP numbers released earlier this month. While true, the GDP or Gross Domestic Product reveals strong economic output but prices remain stubbornly higher than they were just two or three years ago. So is deflation the answer? Will your $7 latte ever go back to its 2019 $5 price? The answer to both is no.

While falling prices or deflation sounds like an attractive proposition it actually can wreak havoc on an economy. Falling prices can lead to a spike in unemployment and postpone consumer purchases which fuel our economic output. Why buy that new washing machine when it will be cheaper in a few months? In fact, the Federal Reserve prefers modest price increases or inflation averaging an annualized rate of two percent.

How are today’s retire’s faring? Not so well. Even with Social Security benefits being increased thanks to the Cost of Living Adjustments of 5.9, 8.7 and 3.2% in the years 2021-2023 respectively, the aggregate increase of 17.8% while helpful doesn’t fully offset the increased cost of auto, home or health insurance. Should they need a car Kelly Blue Book reports the average auto transaction will cost 6,500 higher than it did in 2021. curated the cost of common everyday goods and found the following price increases.

Again, a slowing annualized rate of inflation only means that the cost of a select ‘basket of goods’ has increased by a given percentage (CPI0 any given month- an increase that’s added to the already baked-in inflated costs of everyday goods and services that remain well above 2020 and 2021 prices.


Another good reason to pick up the phone or contact those homeowners who said “no” just one or two years ago.