Limited Public Funds
Three out of five retirees rely on Social Security income to fund at least half of their monthly expenses, according to a Gallup poll of pre-retirees. Survey results also suggest that nearly nine out of ten seniors will need some form of Social Security to make ends meet during their golden years. This data is grim since the Social Security Board of Trustees projects that the trust’s more than $2.8 trillion in asset reserves could be depleted by 2034. With funds set to dry up in as little as 17 years, where does that leave American seniors?
Unless your income earned was substantial enough to enable you to meet living expenses and save a large nest egg, you could be discouraged by the financial road ahead. The Consumer Expenditure Survey (CE) shows where seniors spend their income:
- Contributions for pensions (which proportionally decreases with age)
- Healthcare spending (which proportionally increases with age)
Senior Financial Picture
With so many demands on senior finances, it’s little wonder so many feel stressed. A recent Gallup Economy & Personal Finance Survey showed 60 percent of people surveyed worried about not being able to pay medical costs for an illness/accident. And 64 percent said they were worried about not having enough money for retirement. The poll also showed that seniors are afraid they would:
- Not be able to maintain the standard of living they currently enjoy.
- Not have enough to pay their normal monthly bills.
- Not be able to pay medical costs for normal healthcare.
- Not be able to pay rent, mortgage or other housing costs.
- Not be able to make the minimum payments on credit cards.
Gallup first began polling Americans about their financial concerns in 2001. Results show that respondents have continually worried about not being able to afford retirement. In fact, that concern ranked number one in each of the surveys over the past 16 years. So, instead of spending their retirement years enjoying the life they have worked so hard to build, most are worried about just making ends meet.
So, what’s the answer?
- Start saving now. Since you can’t go back in time, there is never a better time to start than now!
- Look for creative ways to supplement social security. If you don’t want to apply to be a greeter for Wal-Mart, you could potentially earn a little extra cash by making crafts or baked goods to sell at art fairs or online.
- Sell assets. Of course, you could put your home on the market. But it takes money to make money. So, be prepared to de-clutter, sell possessions and relocate if you go this route.
- Investigate a reverse mortgage. Once considered a “last resort” move, reverse mortgages have come into their own. With new regulations to protect borrowers and loans guaranteed by FHA or private lenders, you might be surprised at how much extra cash you could enjoy each month with an HECM Reverse Mortgage. Wouldn’t you rather have extra spending money instead of struggling to come up with your mortgage payment each month?
If you have questions about how much reverse mortgage capital you might qualify for, contact Manny LaFosse, your certified reverse mortgage consultant. Residents of Los Angeles County and North Orange County should look to the experts at Reverse Mortgage Certified for great rates and information about the reverse mortgage loans as well as several other available financial options.