Mainstream press coverage of reverse mortgages have been portraying reverse mortgages through a variety of lenses. While some of the most common articles have focused on using a reverse mortgage as a retirement planning tool, a recent piece published in TIME’s Family Finance section describes how these loans can help borrowers pay for caregiving costs.
Written to an audience of adult children who might be caring for either one or both aging parents, the article provides an overview of some challenges facing the “Sandwich Generation,” which are older adults sandwiched between providing care for their parents as well as their own children.
Considering 70% of people age 65 and older will require some form of long-term care during their lives, according to health insurer Genworth’s 2015 Cost of Care Survey, paying for these likely necessary services creates quite a financial burden. For example, the national median costs to live in an assisted living community are $43,200 annually, according to the 2015 survey. Additionally, for nursing care, a private room is likely to run $91,250 per year.
“That is more than enough to blow up any financial plan,” writes TIME, which then proceeds to list several suggestions to help foot the bill for these expenses, including using a reverse mortgage.
“With the bank paying you every month, instead of the other way around, that check can help cover costs for in-home caregivers,” the article states.
The article also cites Tom Davison, a financial planner in Columbus, Ohio who is also a member of the Funding Longevity Task Force. Davison was working with a 90-year-old woman whose daughter moved in with her as a caregiver.
“A reverse mortgage could help (the daughter) pay her wages she has given up,” Davison said in the article.
Read the TIME article.
Written by Jason Oliva