social security retirement income seniors

			When Mom & Dad Run Out of Money... Creative Financial Options to Assist with Geriatric Care Needs

Part one of four- Creative financial options for baby boomers to assist their parents with their costs of living

It’s a dilemma for the ages. As Depression-era elders reach their declining years, their baby-boomer children worry that their parents will run out of money before they run out of years.

Even supplemented by Social Security and pension payments, the nest egg that your parents took a lifetime to build isn’t likely to be enough to cover an extended stay in a nursing home, assisted-living facility or even geriatric care assistance at home. Few seniors carry long-term-care insurance or have enough savings to cover the bills. Most people go through their assets within a year of requiring this type of assistance.

Your first impulse is likely to become the hero and come to the rescue of your parents. But what about your own mortgage payment? Your own retirement nest egg? Your families living expenses? How about the college savings for your children? So, what are your options when Mom or Dad runs out of money?

One of the financial options available for seniors and their family members that is not understood very well are reverse mortgages.

As with any financial transaction, there are pros and cons to reverse mortgages. However two large organizations support and advocate them, especially for seniors who need long-term care. The National Council on Aging and AARP both support the use of reverse mortgages in certain circumstances.

A study released by The National Council on the Aging (NCOA) shows that reverse mortgages can be used effectively by more than 13 million Americans to pay for long-term care expenses at home, allowing many to remain independent and in their homes longer.

A reverse mortgage is also called a home equity conversion mortgage. These loans are backed by the federal government (HUD and FHA). Seniors age 62 and older are eligible to use this federal program. This is a "non-recourse loan," which means that heirs of the seniors are not responsible for repaying the loan. In fact, a reverse mortgage is a loan that does not have to be repaid unless both homeowners (assuming a couple) leave the home permanently, or both pass away. No monthly payments are required. The senior is the one who gets paid. Finally, the money seniors receive from a reverse mortgage is tax free, and does not interfere with Social Security or Medicare benefits.

As with any financial option, reverse mortgages are not for everyone. However, for the senior or couple who are having trouble making ends meet, this can be a life saver. Some seniors are using the extra cash flow to pay for in-home care, adult day care, prescription drugs, to pay off credit card debt, and make necessary home repairs so they can live safely and more comfortably.

To contact a "Senior Savvy Verified" advisor in your area that can provide more information on a Reverse Mortgage, please fill in the form below and click submit.

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