Following the wildest economic ride most of us have ever experienced many find retirement plans now require remaining employed, if possible, to pay off debt or to afford simple daily expenses. Most frequently the baby boomer generation has done all the right things to plan for their retirement. Yet, here we are in the midst of an economic recovery (thankfully!) and still wondering how to enjoy life with disappearing retirement investments, and the real possibility that Social Security might be the main source of our income.
According to a recent AARP Public Policy Institute survey, middle-income Americans age 50 and older are carrying more credit card debt on average than younger people ($8278 vs. $6258). The survey report suggests that credit card debt among Americans 50+ is primarily a reflection of difficult economic times and not lack of personal financial responsibility. The survey also found:
- 50% carry an average of $893 in medical expenses on their credit cards with medications and dental expenses the highest contributors to that debt;
- 49% reported that car repairs contributed to credit card debt;
- 38% report that home repairs contributed to credit card debt;
- 34% use credit cards to pay for basic living expenses such as mortgage payments, groceries, utilities, or insurance because they do not have enough money in their checking or savings accounts;
- About 23% of people age 50+ report that money given to, or used to pay the debts of relatives added to the balance on their credit cards.
A Reverse Mortgage (Home Equity Conversion Mortgage – HECM) can be part of your plan to overcome dwindling income and unexpected debt. A HECM can provide immediate access to the available equity in your primary residence allowing you to pay off an existing mortgage while eliminating future monthly mortgage payments. You will continue to make your property tax and homeowner’s insurance payments, but the income once budgeted for your mortgage payment is now freed up for other uses. And most importantly, you still own your home and can savor life rather than stress over debt.
Would you like to discuss how a HECM might benefit your situation? Please contact us and we’ll schedule an in-person meeting.