With the incoming influx of baby boomers entering retirement age, the number of older homeowners will soar in the near future. While many will prefer to age in place, certain challenges will prevent these desires from becoming reality. But here is where a reverse mortgage can be a financially realistic option to help older homeowners alleviate cost burdens and comfortably age in place, according to a new report from Harvard University.

More than one in five people in America will be aged 65 or older by 2035. Furthermore, one in three households will be headed by someone 65 or older, according to the report released Tuesday by the Joint Center for Housing Studies of Harvard University.

During an era that will see vast quantities of older people with low incomes and high housing costs, reverse mortgages—if used strategically—could provide another solution for helping older homeowners facing cost burdens.

“For those homeowners with mortgages they cannot afford but who still have substantial home equity, reverse mortgages may make it more financially feasible to age in place,” the Harvard report states. The report also includes information on projections of older population and households, tenure and housing circumstances of older adults, disabilities of older adults, the financial situation and implications for housing.

May this holiday season be happy and bright for you, always full of hope and gratitude.

For many American workers today, the road to a comfortable retirement is paved with many challenges, both within and outside of retirees’ control. Not the least of these issues is the fact that a shortfall in savings will force retirees to consider non-traditional retirement funding solutions, particularly home equity and reverse mortgages, said one official from a Washington, D.C.-based think tank this week.

“Home equity, we think, is underutilized in retirement planning,” said G. William Hoagland, senior vice president of the Bipartisan Policy Center, a Washington, D.C.-based non-profit organization that aims to promote health, security and opportunity for all America.  The final report can be seen here Securing our Financial Future

Hoagland, who helps direct and manage fiscal, health and economic policy analyses for the BPC, presented on the retirement security and personal savings challenges facing today’s Americans at a policy forum hosted by the Employee Benefit Research Institute and the Education and Research Fund on Thursday.

Citing that Americans own an aggregate $12 trillion in home equity, and that for many retirees home equity represents a significant portion of their assets, Hoagland suggested reverse mortgages will become an even more popular retirement solution.

“Fifty percent of all homeowners age 62 are home-rich and cash-poor in the sense that more than half of their net worth is held in home equity,” he said. “The reverse mortgage market is small and the product carries some risk, but nonetheless we [BPC] think it could be a valuable tool for retirees with significant home equity.”

Two years ago, the BPC launched the Commission on Retirement Security and Personal Savings with the aim of addressing some of the most important financial issues faced by all Americans. Since then, the Commission has extensively analyzed certain challenges and has developed a bipartisan package of solutions.

Such challenges addressed in the forthcoming report include ways to expand access to “well-designed” workplace retirement plans, facilitate personal savings for short-term needs as well as retirement, and strategies to preserve and strengthen Social Security for current and future generations of American workers.

Reverse mortgage policy recommendations will also be included in the final report, Hoagland said, though he did not expound on the finer details of what these proposals might entail.

 

 

 

 

This video is a replay of a live webcast REALTOR® Magazine presented on April 21, 2016, about selling a home that has a reverse mortgage. The program featured Leslie Flynne, chief operating officer of Reverse Mortgage Solutions, Inc., and Steve Irwin, executive vice president of the National Reverse Mortgage Lenders Association. Jon Boughtin of NAR Public Affairs hosted the program.  At a minimum listen to the first 20 minutes! Please contact me if you have further questions.