Posts Tagged ‘retirement’

“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

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“The way we treat retirees in this nation is broken…

When the government created Social Security, it was as an anti-poverty insurance program… not a way to pay for your entire retirement. In fact, it began with only a 2% payroll tax and promised to never take more than 6% of a worker’s pay.

That promise was broken.

Today, Social Security takes a combined total of 12.4% of your pay.

And what do you get guaranteed in return?

Nothing.

According to the Social Security Administration’s own website, the Supreme Court ruled in 1960 that citizens have no legal rights to Social Security, no matter how long they paid into the system.

Social Security’s costs this year exceeded its income for the first time since 1982.”

-P.J. O’Rourke

Debt Trend

Posted: June 5, 2018 in Debt
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“We’re seeing people carrying much more debt than in previous generations into retirement.” -Ron Rhoades WKU

“Younger people are taking on debt at a higher rate and paying it off at a lower rate.” -Lucia Dunn  OSU

Money Magazine

“Your retirement… and wealth that you accumulate across your lifetime… depends almost entirely on just one factor: Your savings rate.  It doesn’t matter whether you make $30,000 per year or $300,000.  It’s all about the percentage that you can save.” -David Eifrig

“But you must replace the old, defective idea that retirement means living off passive income only. Paint a new mental picture of what retirement can be: a life free from financial worry that includes lots of travel, fun, and leisure. Funded in part by active income from doing some sort of meaningful work.” -Mark Ford

Wealth Preserve

Posted: January 29, 2016 in Money Matters
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A cardinal rule for preserving wealth is never overpay for anything.  The more money you keep, the more you can save for your retirement.” -David Eifrig

Barring an utter collapse of the U.S. government, Social Security should still be around when you’re ready to collect.  But it shouldn’t be the only thing you’re relying on.  Ultimately, it’s up to you to ensure your comfortable retirement.” -David Eifrig