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As older people increasingly express a desire to live out their retirement years in a fixed position at home, families are often required to provide some form of care for their loved ones in later life. According to a column published by Reuters, the caregiving challenges can be even worse when there is only one child in the family, but a reverse mortgage could be a solution.
Michael Hausnost, a financial planner in Long Beach, Calif., is at the forefront of caring for his 90-year-old mother, her only child. One of his pieces of advice for only children caring for their parents is to start caregiving early.
“I started planning, [this] That was 20 years ago,” Hausnost told the magazine. “My family is long-lived, her mother wasn’t going anywhere anytime soon, and she didn’t have the means herself either, so she saved accordingly.”
Hausknost’s mother costs about $6,000 a month just for room and board, and additional costs such as medication are regularly added to that amount, so this money-saving exercise will likely be a big help, the column said. explained.
But according to elderly care consultant and author Joy LaVerde, “eaten into” savings to pay for retirement care can seriously jeopardize the financial stability of parents and children, leaving children with no idea how much they are paying for the costs. He says people need to make wise decisions about whether to contribute.
“If you start putting money into your own pocket, you could end up paying all the costs and being disqualified from state and federal programs,” she says.
This is where alternative financial products come into play.
“There are many options, including selling your home and downsizing, taking out a home equity loan or line of credit, or taking out a reverse mortgage,” the column says.
Industry educators have long sought to position reverse mortgages as a retirement planning tool. Experts such as Wade Pfau and Jamie Hopkins have long sought to communicate the potential of reverse mortgages to increase retirement cash flow, and Pfau often describes reverse mortgages as an investment tool. There is.
“An important aspect of retirement planning is the risk of sequence of returns.” […] Spending from your home equity can help you keep more of your investment. So ultimately there will be a bigger legacy,” Pfau told Investment News last month. “The beneficiaries can benefit more. They can pay off the loan and still get a net profit.”
recent data WSFS Home Loan 79% of respondents nationwide agreed that a reverse mortgage “allows you to stay in your home longer,” and 76% of respondents agreed that the loan “can provide you with the cash flow you need.” , suggested that awareness of reverse mortgages may be warming. retirement.
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