You hear stories all the time of people who run out of retirement savings. They saved plenty, but it didn’t last. With the economy bouncing up and down on a daily basis, it can be frightening to live on a limited income, especially when you walk into the grocery market and see the prices have been raised – yet again. News outlets claim people make more money now, but your retirement income is the same. What do you do?
A Scary Statistic
According to the AARP, 52 percent of those 65 and older will require elder care prior to their death. Many elderly people become disabled whether through an accident or illness, and many more simply get to the point where they cannot care for themselves anymore. This is discouraging for all, especially those who relish in their independence, and it forces many seniors out of their beloved homes, because in-home care rates are markedly higher than extended care facility rates.
No person wants to leave his or her home, particularly if it has been in the family for decades. Yet, how can you afford in-home care at over $10,000 a month on average if needed 24/7? Thankfully, there are insurance and federal programs, including Medicare and Medicaid that offer benefits for aging seniors who require consistent help. It’s better to look into these programs now rather than later, because once you need them, you may be unable to qualify.
When properly insured, you should only have to tap into your retirement savings for a portion of your care costs, which can save you thousands in the end, but this isn’t the only way you can make your retirement savings stretch. Living within your means is another way to ensure your money lasts as long as you need it, so don’t go crazy. If you and your spouse are healthy with no signs of slowing down, yet you didn’t save enough to last you for at least 15 to 20 years, you may have to change your plans.
Traveling around the world or buying a second home in Florida may not be something you can really afford to do. As when you were working, you must establish a retirement budget and live by it, because now, once the money is gone there’s no working overtime to make it up. Your Golden Years should be the best years of your life, but they can become disastrous if you aren’t wise with your money, so live within your limited means. Also, talk with a company such as American Advisors Group.
This company, and many others, offer retired individuals the option of a reverse mortgage, and the number one benefit of a reverse mortgage is it alleviates your house payments. As long as you are not upside-down in your home’s financing, you will likely qualify for a reverse mortgage which leaves the home in your name but lets you enjoy the financial freedom of added monthly income. You will “sell” your home to AAG Reverse but still live in it. Here’s how it works.
In very basic terms, a representative from the reverse mortgage company will have your home appraised. If you have enough equity in the property, it will offer you a lump sum, monthly payments, or a line of credit into which you can tap. This money is the appraised value of your home. You still retain ownership and property tax responsibility, but when you pass, the home defaults to the lender for sale to recover the money you received.
If you are struggling to make ends meet, a reverse mortgage is a viable option to help you stretch your retirement savings. Not only do you receive additional monies for your home, you also remove your monthly mortgage payment from your budget.