While many people may have plans for major excursions or tasks they want to accomplish when they reach the milestone of retirement, sometimes the reality of living on a fixed income can conflict with the desires people have in their post-working years. However, aging in place is increasingly becoming a popular method of not only remaining in the home that is preferred by the retiree, but also just to save money.
This is according to a column published at Yahoo Finance. While the reverse mortgage industry is all too accustomed to the concept of aging in place, the column makes mention of several differing definitions for what the term can mean for different people. This understanding may benefit reverse mortgage professionals seeking to tailor their client’s desires with what could be accomplished for a qualifying borrower.
“The easiest and most common option for seniors to ‘age in place’ is simply to remain in the family home,” the column reads. “If you’ve paid off your mortgage by the time you retire, you’ll save a ton of money by remaining in your ‘free’ lodging rather than traveling and incurring additional expenses. This isn’t to suggest that there are no costs involved with living in a paid-off home.”
These costs include things like taxes, homeowner’s insurance and (if applicable) homeowner’s association (HOA) fees, costs that would continue to be present for reverse mortgage borrowers. Interestingly, the column does make direct reference to a reverse mortgage as an option for extracting home equity, and discusses the necessity of speaking with a financial advisor regarding the specific realities of a reverse mortgage for a particular client.
“If you live in a home with a paid-off mortgage, it also opens the door to more advanced financial planning options,” the column reads. “For example, you can take out a home equity loan or line of credit against the equity in your house to help pay for any number of expenses, such as landscaping, plumbing or roof repair. Just know that you’re using your house as collateral in the event you’re unable to pay back what you borrow. Reverse mortgages are another potential option, although you’ll want to talk to a financial advisor to see if this potentially expensive choice is right for you.”
Other definitions of aging in place explored by the article include with other family members (potentially in the same family home), or “in an assisted living facility,” which some reverse mortgage professionals may contend should not really count toward the concept of aging in place since it would require relocation. The column, however, contends that this doesn’t always need to be the case.
“Aging in place doesn’t necessarily mean you have to live in a place owned by you or your family members,” the piece reads. “There are many assisted living facilities and retirement homes available for seniors looking to develop a sense of community while saving on their expenses.”
Read the column at Yahoo Finance.