Dollar Earned

“The eagerness to spend more casually and live a noticeably rich lifestyle gets more intense with each generation. Put simply, earning a dollar yourself tends to make a person a little more cognizant about how that dollar is spent.” -Natalie Schmook

Reverse Mortgage Considerations

“A recent survey showed that more than 40% of Baby Boomers (those born between 1946 and 1964) have less than $100,000 in retirement savings. That means those right at the retirement window won’t be able to maintain the lifestyle they want once they retire. You might think Social Security will help. Think again – the average monthly Social Security check in 2018 is just $1,404….

Reverse Mortgage Recap:

In a typical mortgage, you obtain a loan for the purchased real estate and then slowly, over the life of the loan, pay it back to the bank. The reverse mortgage works exactly the opposite… We get the bank to pay us while our health is good, and we don’t have to pay it back until we die or move out of the home.

Once approved, you can receive your loan money in several ways. You can take the money as a lump sum, a stream of payments, a line of credit, or a combination of the three.

Reverse Mortgage Precautions:

Depending on how you receive your reverse mortgage payment or payments, you could risk losing your eligibility for Medicaid.

Maybe you aren’t thinking about Medicaid just yet. After all, Medicare covers a wide range of health services. Here’s the kicker: Medicare only covers short-term care in a skilled nursing facility or rehabilitation care in a nursing facility. Medicare will not cover any long-term care, including care at a nursing home.

That’s where Medicaid comes in. Medicaid is the primary payer for nursing-home care in the U.S.

That means if you take out a reverse mortgage now and suffer a stroke two months later, you might not qualify for Medicaid and will have to pay out-of-pocket for all your nursing-home care.

Taking a lump sum payment or getting monthly payments that you don’t exhaust each month (meaning you’re building up your savings account) triggers something called the spend-down rule.

Basically, you only qualify for Medicaid if you meet the financial requirements. In other words, if you have too much money in your bank account, Medicaid expects you to spend that on your care before you qualify for assistance. You have to “spend down” what you have to reach that point.

And keep in mind, nursing-home care runs up the bill. In 2016, the national average for a shared room in a nursing home was $225 per day. That’s more than $82,000 a year.

The second consideration for taking out a reverse mortgage is the possibility of moving. If you don’t live in your home for at least one year (for instance, if you’re in a long-term care facility) or if you sell the home, the loan would come due. That means paying it back in full….

Also, if the housing market drops or your home loses value for any reason, you might not be able to sell it for the full amount of the loan. In that case, you’d have to make up the difference….”

-Dr. David Eifrig

Basic Lifestyle

“Nearly 51 million households – or more than 40% of all U.S. households – can’t afford even the basics of a middle-class lifestyle.” -Justin Brill

Retired Income

“You need more than a high income to be wealthy.  It’s amazing how many people, young and old, don’t understand this.  Too many folks equate making ‘mucho dinero’ with being rich….  A big income can give you a great lifestyle. But if you’re spending it as fast as you’re making it, when you stop working, or when a financial emergency arises, you’ll very quickly find out how un-rich you really are.  If you want to become wealthy—in terms of having lots of money put away for a rainy day or money to spend after you stop working for it—you are going to have to learn how to save and invest a significant portion of your income.” -Mark Ford

Lifestyle Cost

“The cost of your house determines the cost of your lifestyle.” -Michael Masterson

Poor Lifestyle

“Holding on to a lifestyle you can’t afford will make you poorer—every month.” -Mark Ford

Monthly Poor

“Holding on to a lifestyle you can’t afford will make you poorer—every month.  And it will make you more fatigued and more angry.” -J. Reeves