“Be faithful in small things because it is in them that your strength lies.”– Mother Teresa
BABY BOOMERS RETIRING WITH LESS SAVINGS & MORE MORTGAGE DEBT
It’s no surprise that life expectancy is continuing to get higher today and baby boomers are expected to live longer than previous generations.
Experts predict a record number of boomers will be entering retirement in the near future and according to a report by the Stanford Center on Longevity entitled “Seeing Our Way to Financial Security in the Age of Increased Longevity”, they are heading into this next phase of life with less savings and more debt.
The report highlighted an increase in mortgage debt among older homeowners as a big concern pointing to data showing that in 2012, one-third of homeowners 65+ years of age were still paying off a mortgage – up from less than a quarter of homeowners in 1998. The amount owed on a mortgage has also nearly doubled from $44,000 to $82,000.
The report states:
“Considering the vast size of the Boomer population, increased life expectancy, and the rate at which today’s Boomers are retiring, being ill-prepared for retirement has profound implications for the overall well-being of individuals, families, and society today and for generations to come.”
But it’s not all bad news. Baby boomers have options for supplementing their retirement income and better preparing themselves for what should be their golden years. Leveraging home equity could be an ideal solution.
For many people home equity represents the largest component of personal wealth and should be seen as an asset to consider in a comprehensive financial plan. Reverse mortgages can be a strategic way to tap into your home equity, pay off an existing mortgage and increase your retirement income.
Reminder of how a reverse mortgage mortgage works:
- Reverse mortgages are loans for people 62+ years of age that allow you to borrow against home equity without being required to pay a monthly mortgage payment.
- You can continue to live in the comfort of your home.
- Some of the equity in your home is first used to pay off any existing mortgages, and the remaining loan amount is converted to non-taxed cash that you may receive in a lump sum, a monthly disbursement, or a line of credit.