In a report dated June 2013, The National Institute on Retirement Security (NIRS) examined the financial readiness of working-age households, based primarily on an analysis of the 2010 Survey of Consumer Finances from the U.S. Federal Reserve. The author, Nari Rhee, Manager of Research for the National Institute on Retirement Security discusses the reality facing many seniors today. The report claims that working American households age 25-64 are collectively short between $6.8 Trillion to $14 Trillion in retirement savings.
In this uncertain environment, many workers do not realize the amount of money they will have to save throughout their careers to maintain a similar lifestyle in retirement. NIRS states that “to maintain its standard of living in retirement, the typical working American household needs to replace roughly 85 percent of pre-retirement income. This replacement rate may seem high, but it does not fully account for medical costs which can escalate rapidly during retirement.” With 45 percent of all U.S. working age households not having any savings for retirement, this may seem a daunting task.
Not only are living expenses increasing, but people are generally living longer than previous generations. As reported by ABC News , “with the aging of baby boomers, born between 1946 and 1964, America’s older population will double by 2030, reaching some 70 million. Life expectancy for Americans age 65 in 2000 is 18 years, on average. In 1900, 65 year-olds could expect to live, on average, another 12 years.” With life expectancy increasing, it makes sense to save more for retirement.
If making ends meet has become a struggle for yourself or a loved one, a reverse mortgage loan may be the right option to supplement your retirement income. A reverse mortgage is a loan that allows you to access a portion of the equity in your home. Loan proceeds can be received in a variety of ways. Borrowers may choose from monthly payments, a lump sum, a line of credit or a combination of these options.
There are some basic requirements to be eligible for a reverse mortgage loan. Borrowers must be 62 years old or older, have sufficient equity in their home, not be delinquent on any federal debt, live in the home as their primary residence and participate in a counseling session with a HUD-approved reverse mortgage counselor. Eligible homes must be a single family home, a two to four unit home where the owner occupies one unit, an approved condominium or manufactured home.
Many seniors seeking greater financial security may find a reverse mortgage loan provides the extra assistance they are looking for. For more information about reverse mortgage loans and how they can help offer financial freedom, please call 866-751-6105.