The 4 Biggest Risks for Senior Homeowners

As senior homeowners approach retirement, there are 4 big risks they face, which are:

  1. Healthcare costs
  2. Inflation
  3. Longevity, and
  4. Taxes

Risk 1 – Healthcare

It seems as if each week or month the rising cost of healthcare is in the news. Politicians can’t seem to figure out what to do about this and as the baby boomers enter retirement, the cost of healthcare will increase as it is a supply and demand issue. That is, there will be more demand (boomers needing care) than the supply available (trained healthcare workers) which will drive up the price.

Risk 2 – Inflation

Then, there is the silent tax of inflation. If inflation averages 2.4% a year for the next 30 years (the last 30 years, the average was 2.51% per year), the cost of goods will double. Said another way, purchasing power will be cut in half by year 30. So, someone with an income of $50,000 a year in 2020, will need $100,000 in 2050. We don’t recognize it easily because it is happening gradually over time, weeks, months, and years.


Risk 3 – Longevity

With advances in healthcare in recent years, people are living longer. Studies show that close to half of Americans age 62 in 2018 will live to age 90. The biggest fear that seniors have is outliving their money. All of their adult life they have seen the money come in from working. Now in retirement, they see prices increasing and money going out. And this kind of freaks them out.

Risk 4 – Taxes

Finally, there are taxes from the federal, state, and local governments. Many feel that tax rates are as low as they may ever be in their lifetime. Politicians are getting creative now when looking for additional revenue, calling tax hikes ‘fees’, ‘assessments’, ‘dues’, ‘tolls’, or ‘charges’. They are even so bold as to say it’s our duty, responsibility, or obligation to pay more taxes. I have yet to meet the senior homeowner who is excited about paying more in taxes while on a fixed income.


Reverse Mortgage as a Solution

There is a solution to this pressure that senior homeowners face. In fact, in 2020 approximately 3% of Americans have discovered and benefitted from a mortgage that suits a senior homeowner approaching or in retirement. Mitigate against these risks by utilizing your largest asset, your home. A reverse mortgage helps a senior homeowner remain at home, maintain their independence, retain title as an owner, and eliminate their monthly mortgage payment. Or, if they have enough equity, they can access their equity 3 ways tax-free.

A reverse mortgage can help hedge against and mitigate the four biggest risks the senior homeowners are facing.

I always tell people, learn about your options for home financing in retirement. Then, when you know what is available to you, make an informed decision. I’d be happy to sit down and talk. In about 7 minutes, I’ll be able to tell you if a reverse mortgage makes sense for your situation. Give me a call at 719-302-5820.

Thanks. -Kevin