HECM for Purchase: An Under Used Tool for Older Adults. Reverse mortgages haven’t lived up to expectations, that doesn’t mean there hasn’t been visible success with the HECM for Purchase program. It is still one of the resources that older adults and realtors use the least. However, the possible boost would help loan originations and home sales.

Even though not many Millennials are buying homes, they tend to dominate the national conversation about real estate. Still, about a quarter of all buyers are over 60.

In the United States, there are 75 million baby boomers and 80% of them already own their own homes. From a realtor’s point of view, older homebuyers are different from younger ones in since they have their unique challenges and benefits.

That is why the Senior Real Estate Specialist designation exists. A perk to being an SRES is you’re not only going to get a purchase — you’re going to get the sale of their existing home. Knowing a reverse mortgage specialist is a great place to start if you are not SRES certified.

How do HECM for Purchase Help

HECM for purchases can help older adults who are going through “grey divorce.” This is when an older couple decides to end their marriage. This usually results in selling the family home because it has too much emotional baggage.

Specialists knowledgeable about the HECM for Purchase can assist the realtor in helping both individuals. This program can help people buy a home they couldn’t afford otherwise and back on their feet.

HECM for purchase is distinctly different from traditional HECMs (Reverse Mortgages). HECM specialists have pointed out that this product caters to a different potential user than a regular HECM.

Buyers will be interested in this option since the HECM for Purchase allows them to pay a portion of the total purchase price of the house.

With the rising cost of living in hot markets like Los Angeles, older couples may be unable to afford the next move. Usually due to not having enough money from selling their home.

For realtors who find their older clients in a similar situation, Hecm for Purchase is a possible option.

Medical expenses are a significant source of concern for many Americans. However, there are methods that people may take to prevent medical debt in retirement. Thanks to Danielle Kunkle at Boomer Benefits, who gave some practical tips we can use in his Forbes article “How To Avoid Medical Debt In Your Retirement.“

On-Time

The most important thing to remember is to sign up for Medicare on time. Late enrollment in Medicare carries significant penalties. You can avoid penalties by enrolling in Medicare when you first become eligible. The longer you wait to register the more penalties you will incur, which can be very costly.

Mind the Gaps

People should also think about filling coverage gaps by purchasing Medicare Advantage or other Medicare supplements that cover healthcare services not covered by traditional Medicare.

Do a Double-Take

Retirees can protect themselves from overcharging by carefully reviewing their medical bills. Don’t just assume that the statement for your medical care is right. Billing mistakes happen so often that insurance companies ask their policyholders to send them their bills before they pay them so we can check them.

Hedging Bets

Working individuals are encouraged to contribute to their health savings account (HSA). The money they put into this account is tax deductible. Then, when they retire, they can use these funds to pay for medical bills. Individuals should do everything possible to maximize their yearly contribution under their qualified employer health plan.

Stay Plastic Free

Health care is expensive and unpredictable. Do not use credit cards to cover medical expenses. As they strive to pay off their debts, financing fees are added to the cost of medical care when you pay with a credit card. Ask your medical provider about a direct-payment plan option. This is an excellent way to avoid paying interest.

By making wise healthcare decisions by planning, hopefully, individuals can avoid medical debt that would otherwise put a strain on their golden years.

If you consistently run out of money before the end of the month, you may need to take some drastic measures to get your finances under control. Consider the following Get-Tough budgeting tips:

• You can avoid paying bank fees by maintaiting a minimum balance and preventing overdrafts.
• Avoid paying fees by stop using ATMs that charge for withdrawals.
• Stop receiving cash back on debit or credit card purchases to use as spending money
• Leave your debit and credit cards at home and only use cash or money you already have.
• Don’t use credit cards.
• If you have to, refinance credit card debt with a credit union.
• Eat meals at home. Do not eat out.
• Consider switching your carrier and reduce your overall usage of the phone.
• Take advantage of free activities rather than paying for entertainment.
• Cut back or avoid buying frivolous or luxury items such as designer labels or subscriptions to streaming services like Netflix or similar services.
• If you still have a landline service, cancel it and use only a cell phone.
• Shop your auto insurance.
• Call your current carriers for discounts or deals most companies will sometimes reduce monthly charges when asked.
• You can save $10 a month by plugging your TV and electronics into a power strip and only turning them on at night.
• Install a programmable thermostat to shave as much as 15 percent off your cooling and heating bills.
• Downsize or comp away with your storage unit. If you honestly haven’t used it for a year, sell or give away all that stuff in that unit.
• Change income tax withholding to increase take-home pay
• Take a list when shopping, and stick to it.
• Avoid shopping malls and discount stores.
• Sell an asset, especially one that costs you more money, like a boat or second car.
• Save money for an emergency fund, even if it means cutting back on your retirement plan contributions for a while.
• Use second-hand items
• Make holidays “non-spend” events or re-gift unused, like new items, or get crafty
• Move to lower-cost housing.
• Work extra hours or get a second job to make more money.

Did you know that American families spend twice as much money on adult children than on retirement savings, according to a Merrill Lynch survey. It is time to explore the empty nest and tough love.

According to a study done by Merrill Lynch and Age Wave, the most expensive stage of parenting is when the kids move out, the empty nest stage.

When the kids move out, it is supposed to be the time when you can save money, spend more time on yourself, and save more for retirement. Unfortunately, more often than not, parents continue to be the “family bank” for their adult children, tossing the supposed plans out the window.

In June 2018, 2,500 parents with adult children (18+) were asked questions about their current parenting stage. Most parents with adult children reported that they financially supported their children, especially throughout college. Most also admit that they placed their children’s interests ahead of their own retirement plans.

Some parents postpone retirement because they are willing to dip into retirement assets or assume new debt. This assumed obligation brings them unhealthy stress and creates situations that may impact their quality of life in retirement. If the parent had set appropriate boundaries and said no to continuing financial help that they could not afford, their health and retirement would not have been spoiled.

According to a Pew Research Center survey, six out of ten parents with at least one adult child indicated they gave financial assistance. This supports that even if the kids have moved out, they are still a part of the parents’ financial picture.

Put It On the Tab

So, how much have the adult children racked up? Loosely, a cool $500 billion. Yes, that is billion with a B. Estimation put about $54 Billion towards food and groceries and $18 billion towards cell phone plans. A contributing factor comes from the student loan crisis. It should be noted that this tab does not include costs like weddings or first-home down payments.

Today’s parents are more likely to contribute to their adult children’s expenses like housing, automobile, and even vacation costs. Since the future is uncertain, it is not unreasonable for parents to have this type of behavioral bias. After all the parents are around to enjoy it.

Many experts believe it is critical to encourage children along and ensure they are prepared to leap into financial independence. The sooner they complete the pivotal shift, the sooner parents will be able to free up much-needed funds. This is for the benefit and self-care of the parent’s goals, such as boosting a retirement account, chipping away at debt, or having money for a car and home repairs.

According to experts, tough love is required for parents to develop financial confidence in their adult children. They need to sit down and have a hard conversation. With them, take a close look at the children’s expenses and set goals with a hard target date. Allow them to set self-imposed goals with accountability checks.

Estate and end-of-life preparation are two topics that frequently make individuals nervous. Many people seem uncomfortable or anxious while discussing such things, or appear too big and hard to consider. This does not have to be the case. Use this estate plan review checklist for a starting point. This list is not all-inclusive, but it is a good start.

Here are a few ideas to help you cope with the anxiety of estate and end-of-life planning:

• Create or update a list of all assets you and/or your spouse own. This includes description, how title is held, location, and value.
  • If you have a trust, ensure the transfer of all assets are correctly showing in the exact name of your trust’s name.
• Create and maintain a complete list of all your usernames and passwords for digital accounts. Close down any accounts that are no longer in use.
• Review beneficiary designations on all assets.
  • bank accounts, insurance policies, retirement plans, etc.
  • Make sure you have a copy of the most recent form.
  • Determine whether you want the trust or an individual listed.
  • Be sure to list alternate beneficiaries so the asset does not go to your estate and possibly cause probate.
• Make sure you have a copy of the most recent deed to your house and any other property you own.
  • If you have a trust, make sure that these properties are in your trust.
    • Note that real estate properties held in corporations, LLC, and/or
      partnerships should not be in your trust, but your interest in that entity should be in that trust.
• Review all estate plan documents, including your Will, Advance Health Care Directive, Durable Power of Attorney, and Trust.
  • Determine whether you need to change beneficiaries, agents, successor trustees, custodians for minor children, and nomination of conservator of your estate or person if that should become necessary because of death, incapacity, age, marriage, or change in your relationship with that individual.
  • Additionally, review how your estate distribution plan lays out upon your death to ensure it is still appropriate.
  • Always consult your attorney regarding previous documents before shredding them.
• Call your Estate Planning Attorney if they have not reviewed your documents in the last few years.
  • Discuss the need to revise your documents due to changes in the law.
    • For example, many older trusts that provide for the trust to be split into a survivor’s trust and a bypass trust may no longer be a suitable plan for many couples today.

Haven’t Started Yet?

If you don’t have a Will, Durable Power of Attorney, Advance Health Care Directive, and possibly a Trust you may want to call an Estate Planning Attorney to discuss the need for you to have such documents.

We welcome you to call us if you need a referral to a trusted advisor for these matters.

The Crack Down on Senior Fraud is coming. U.S. Senators Susan Collins (R-ME), Chairman of the Senate Aging Committee, and Amy Klobuchar (D-MN) co-sponsored the Seniors Fraud Prevention Act, which the Senate Commerce Committee has approved. The bill is now awaiting review by the full Senate.

The Seniors Fraud Prevention Act (S. 512) would help protect seniors from scams by making it easier for people to report fraud and ensuring the right law enforcement agencies handle complaints quickly. The bill would also require the Federal Trade Commission (FTC), the agency in charge of dealing with consumer complaints will work with other agencies to keep an eye out for scams that target seniors.

Also, the bill would require the FTC to give seniors, their families, and their caregivers information about how to spot fraud schemes and get in touch with law enforcement if a senior is a target.

Earlier this year, Senator Collins released the Aging Committee’s 2019 Fraud Book in a hearing titled:”Fighting Elder Fraud: Progress Made, Work to be Done.“

Saving money is the real struggle for many people regardless of socioeconomic status. Most people know that saving money has many benefits … so why is it so hard?

There are many; some say it is an earning problem, not a saving problem; others say they can’t pass up good deals when they see them, and a few say it’s because they deserve it. Maybe the inability to save comes from a generational imprint steaming from the financial havoc that was wreaked on American households- the Great Depression followed by the more recent Great Recession. All are justifiable points, and some will resonate with many people.

These historical events caused Americans to shift priorities if they wanted to survive. In this historical time of economic turmoil, the rise of instant gratification became paramount. People highly sought out things and events that brought “fun” to their lives and allowed them an escape from the gloom that awaited them once the “fun” was over.

People continue to seek pleasurable activities that stimulate the brain’s reward centers. According to a 2014 study done by Cardratings.com, 77 percent of men and 81 percent of women can not go more than seven days without using their phones. Similarly, 41 percent of men and 57 percent of women could not go seven days without checking Facebook.

Phones and social media are not life essentials; however, these outlets provide something that the brain loves: instant gratification. Unfortunately, saving money does not give the luxury of instant gratification. Forgoing instant pleasure is a requirement for saving money. Long-term goals – like buying a car, buying a house, or saving for retirement require people to resist the impulse of instant gratification to prepare for a future reward. After all, forgoing pleasure brings frustration and “pain” triggered by the void.

Fortunately, there are some saving approaches people can try to get them through this behavioral bias. Thanks to The Penny Hoarder and GoBankingRates, they found a few creative ways to save money and conceal the “pain” of saving money.

1.)Pretend you make less than you do.
2.)Be your own competitor.
3.)Save with retail debit cards and reward programs when you have to spend.
4.)Find a job you love – easier said than done.
5.)Put your bills on autopilot.

It is critical to “think single” in money matters when it comes to financial problems. This applies to everyone! Single, divorced, or widowed adults will have to learn to manage their finances independently at some point in their life. You have to decide that no one will take care of your financial needs and come to terms with the fact that you are the only one responsible for meeting those needs.

Adults who have never been married, divorced, or widowed are considered single. There are 110 million single persons in the United States, accounting for more than 40% of all adults. Fifty-three percent are female, while 47 percent are male. That means there are 88 single guys for every 100 single women. Single Americans are becoming more common, accounting for one-quarter of all households.

Sixty percent of singles have never said, “I do.” Divorce affects 25% of single people. Half of all first marriages result in divorce, with 40% of those ending within ten years.

The death of a spouse happens in half of all marriages, and it is most common before the age of 62. Seventeen percent of singles are widowed, and 18 percent are 65 or older. Smart people should always think single! All adults, on their own, must develop this thinking for a successful financial future to cope with these life events.

The Organization for Economic Development reports that Americans pay more for prescription drugs than people in other wealthy countries. The average American spends $1,100, compared to $742 in Germany, $619 in Australia, $509 in Sweden, and $478 in Britain. These are exclusively insured payments. Drug pricing hurts older adults and others. Overpriced drugs can be disastrous for the 40 million Americans without health insurance.

Younger generations don’t need as many medicines as older adults. 10,000 Baby Boomers turn 65 daily, increasing the number of Americans on fixed incomes facing exorbitant prescription prices and insurance deductibles. Forcing many to choose between quality food or medication. Both shorten an individual’s lifespan.

The pharma industry claims subsidized programs exist for such folks, but it merely highlights the lunacy of the system. The mere fact that a discount program is even needed for individuals to receive the medication they NEED.

Reverse mortgages have the potential to save lives. Do you know a retiree who is struggling to make ends meet and is still living in their own home? A program provides enough income to cover basic needs and medication, which can be a lifesaver and ensure that they can comfortably age in place.

Many say how immigrants, and illegal ones, are draining resources from the American people. Conservative politicians, right-wing voices, and Fox News hosts have banged this drum for some time. However, studies don’t bear this out. Immigrants are Essential to Social Security.

A recent study has shown that “3.1 million undocumented immigrants were working and paying Social Security taxes. Those contributions, estimated at $13 billion in 2010, mostly went into the administrative void. The workers who paid them had virtually no chance of ever collecting benefits. In 2010, only $1 billion in benefits were paid based on unauthorized work”. This is all in print in a recent article in the Los Angeles Times.

So what does this mean for older adults who are receiving or who will soon receive Social Security benefits? It means that undocumented workers are helping to guarantee that you won’t lose your benefits. In fact, those workers are even fattening up the entire system and making it more sustainable.

The conclusion for an aging country like the US, immigration is a necessity for economic sustainability. It also means “the biggest threat to your Grandpa’s Social Security is coming from anti-immigrant and anti-worker ideologues like Sean Hannity and Mike Huckabee.”

So get the facts before you vote or criticize immigration policies. Also, the next time you see an immigrant working to make ends meet and send money home for their family, stop for a moment and thank them in your heart for helping guarantee your retirement benefits.