Seniors are facing issues in retirement, whether due to inflation outpacing the increase in social security benefit payments, balances dwindling in retirement accounts or costs continuing to rise.
While some seniors may find these financial hurdles difficult, leveraging the home in some way continues is a viable option, and there are multiple ways to do so, according to a financial planner writing at Kiplinger.
One way of shoring up finances in later years could be to take a hint from a 1980s sitcom and put the home to work for its owners, according to columnist Erin Wood.
“[Y]ou could be like ‘The Golden Girls’ and get a roommate or two to help you with the mortgage — and to split up other bills like utilities, cable and internet connection,” Wood wrote in the column.
“The Golden Girls,” which ran from 1985 to 1992 and featured Bea Arthur and Betty White, revolved around four women who shared a house in Miami after becoming widowed or divorced, and one of the characters had their former assisted living facility burn down in a fire.
The show was a success, and in its prime, had as many as 33 million people tuning into new episodes on a weekly basis.
Wood also notes a reverse mortgage as a potential option for leveraging a home for additional cash.
“For many retirees, their home is among their biggest financial assets in retirement,” she said. “Why not use this asset strategically to improve your retirement? For some, that might mean downsizing to something smaller and more affordable or taking out a reverse mortgage.”
Homesharing is becoming an increasingly regular topic for seniors looking for new ways to make ends meet. Wood also shared a story from her financial advice business, one in which clients purchase a vacation home together. When nobody in the families are using it, they rent it out for the remainder to create additional cash flow.
A 2022 story aired by the NewsHour on PBS detailed ways that inflation drove more seniors to consider cohabitation.
Two decades ago, the number of older adults who were cohabitating with a non-relative stood at about 1%. That figure has since increased by more than double, at over 1 million older adults, according to Jennifer Molinsky, project director of the “housing an aging society” program at the Harvard University Joint Center for Housing Studies (JCHS), who spoke to PBS for the story.
The reverse mortgage industry also plays a part in this trend. In 2018, Finance of America Reverse (FAR) entered into a partnership with senior homesharing platform Silvernest, which occurred in conjunction with a rebranding initiative to address housing and cohabitation or homesharing needs for seniors.
The Silvernest partnership was cited in Finance of America Companies (FOA)’s recent Q1 2023 earnings call as a key element of its future opportunities.
“This is the market opportunity: Helping older homeowners use their homes’ ‘superpower’ to achieve their financial goals, whether by tapping home equity via AAG or FAR, securing the Finance of America Home Improvement Loan or generating additional income by home sharing with Silvernest,” said FOA CEO Graham Fleming.