Then you may want to speak to a licensed mortgage loan officer that has a strong emphasis in retirement planning. Few seniors understand reverse mortgage products, and many figure they can barely survive on social security and therefore do not take advantage of higher end Medicare supplemental programs that could save them thousands of dollars a year.
The average senior citizen who is 65 and on Medicare will be contacted by an insurance agent in regards to acquiring additional supplemental insurance. There are many companies that sell supplemental, and with the ever increasing costs of doctor services, mental health care, and rising prescription drug cost's, the protection that basic Medicare provides maybe just a drop in the bucket in regards to your overall health plan.
Seniors have a plethora of products available to alleviate overall costs. The first step is to determine what coverage you will need when you turn 65 years old.
So what do you do if you can't afford the extra premium. Think about your biggest asset! That's right, your HOUSE that your living in now. Most seniors are either close to paying off their mortgage, or they have mortgages that are less then six figures. In other words they have UNTAPPED EQUITY and if managed correctly, this EQUITY will be their salvation in their Golden years.
How do you ask...It's called a reverse mortgage. The reverse mortgage is probably one of the most under utilized products in the mortgage market. Most of this comes from misunderstandings about what a reverse mortgage is or does. But once the myth's are removed and real education takes place, then the reverse mortgage becomes one of the best retirement tools available. I think one reason many insurance agent's fail to point this out is that they know very little themselves in regards to the program, and in some cases they may not see how it will benefit themselves in pushing a reverse mortgage. This is a big mistake for themselves and their clients. Because a reverse mortgage can greatly improve the lifestyle of their senior clients.
Here is an example of how to utilize a reverse mortgage to someones advantage. Jim Beam is 72, and his wife Carol is 71. Both are finally ready to retire. The regular IRA that Jim has is now paying out $600 a month. Carol didn't have an IRA or pension and so both receive Social Security benefits that combine to equal about $1300 a month. Jim also has a rental property that is netting $350 a month. The total inflow is about $2250 a month for all their expenses. But they're worried, because currently they have a mortgage of $150,000 and a home that is worth $360,000 (*FHA possible limit, high end metro). They have thought about getting an equity line but their lender has told them they don't qualify with their current income. They then think of selling, but they'll still need a place to live, and in their city it would be close to their mortgage payment, which is $1400 a month with taxes and insurance. So at this point they start panicking, because they also have daily living expenses that total up to over $700 a month. This leaves them with $150 a month for food, entertainment and travel. Finally Carol is worried, Jim is currently healthy, but his older brother's have both found out in the last five years that they have prostate cancer. Their bills are astronomical, and even though they both have Medicare, they still have sold asset's and have borrowed from their children to pay for the costs to treat the disease. Carol is worried that they maybe doing the same for Jim.
So Jim and Carol's son approaches them about a new lender named Karl who can help them out. Karl sits down with the couple, looks over their situation and suggests the following. First they'll get a
Now Jim and Carol have NO MORTGAGE PAYMENT. They also spoke to their financial planner who suggested they get an upgraded supplemental
This is just and example of one case I recently worked on in real life. These cases will become more common in future years. If you are looking at retirement, or if you have older parents that are nearing their Golden Years. It wouldn't hurt to speak to a qualified mortgage planning specialist.