It’s a fact that life changes as we get older. For some of us this means financial concerns, others it may be more physical, such as having a hard time getting around. Or perhaps it’s not us, but loved ones, such as a spouse. It does not really matter what the change is, but rather we can count on it happening at some point as we approach our senior years.
Despite the various and diverse issues that may come our way, there still remains one common solution: The Reverse Mortgage.
The reverse mortgage can be a great financial tool to cover many of the needs that seniors will face, as they get older. Similar to a retirement plan, the reverse mortgage allows seniors to pull equity out of their home in the form of cash, with the added benefit that 1) it does not have to be paid back and 2) and it is completely tax free. The proceeds from a reverse mortgage can be used for any purpose, so long as they are used. (I would suggest talking to an accountant but I have read in my research that the funds do need to be spent as opposed to being reinvested).
The versatility of reverse mortgages have been demonstrated by hundreds if not thousands of seniors who have used the funds to alleviate financial worries and make their retirement more comfortable. Some illustrations of how seniors used reverse mortgages to cover a variety of medical and healthcare costs.
Joanne from Virginia lost her husband in 1977, just two days before his retirement. As Joanne recalls, she not only lost her husband, but also insurance and his pension. Instead of retiring living off of their savings, she was now left with virtually nothing except $534 in Social Security. Going to the grocery store, buying prescriptions, or enjoying a dinner with friends, out on the town, became an enormous struggle. Those days ended in October of 2000 when she received a reverse mortgage, allowing her to receive an additional $632 a month for the rest of her life. Joanne’s life has completely changed and she is now enjoying the retirement she longed for.
Bill from Kansas had a different story. He and his wife were living the good life in their golden years. They had saved, and planned their future well in advance and now it was paying off. That is, until Bill had a massive stroke leaving him paralyzed. The hospital bills presented one financial concern, although they could have overcome that, but it was really that Bill was left in a wheel chair, and their two story home no longer accommodated the new arrangement. Neither Bill nor his wife wanted to leave the home that they had raised their children in, but something had to be done. Fortunately through their reverse mortgage, they were able to widen some door ways, and add a master bedroom downstairs, allowing them to stay in their home, without having to dip into their retirement beyond what they had budgeted.
And finally there is Glenna from Arizona. At 80 years of age, she still has a quick wit about her and until very recently was able to drive to the store, go out to dinner and enjoy her grandchildren, and great grandchildren. Glenna was diagnosed with Parkinson’s disease and could no longer leave the house alone. Her children did not want to put her in a nursing home, thus a reverse mortgage was the perfect solution. With the funds of the reverse mortgage, Glenna was able to have a nurse come to the house to take care of her, and cater to her medical needs. Now Glenna can still have her great grandchildren come over to bake cookies.
As you can see, a reverse mortgage is not just about supplemental income, or taking cash out of the home. Its about providing a safety net when the unexpected happens, and meeting the needs of our ever-changing lives.
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All these examples show that reverse mortgage help to guarantee our prosperity, especially when our children won’t support us anymore.