Tag: Estate Planning

Adult Children of Aging Parents

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, FHA HECM, Retirement Planning, Reverse Mortgage

The vast majority of aging Americans want to remain in their own home as they age. However, making the necessary home modifications and paying for appropriate in-home care can create a serious financial drain on adult children. Increasingly, long-term retirement planning includes a reverse mortgage as a means to make it possible for our parents to age in place, and to address their income shortfalls in retirement.

Following is some helpful information when considering an FHA-insured reverse mortgage (or HECM) for your parents:

• The bank does NOT get your parents’ home once they permanently leave the home.

• The home always remains titled in your parents’ name.

• If the home goes down in value, neither your parents, nor you, nor your parents’ estate can ever owe more than the value of the home when it is sold. If you or your siblings wish to purchase the home, you secure your own financing and buy the home – just as you would if your parents had a traditional “forward” mortgage.

• Proceeds from the reverse mortgage are tax-free.

There are unique challenges that face families as loved ones age. As the daughter of an aging mother, I know first-hand the challenges of helping an older parent, and I understand what you’re going through as you assist your parents with their financial needs.

Call me at any time with questions…or if you just want to discuss needs, as I maintain an extensive list of aging-related service providers. I look forward to speaking with you.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant, President’s Club · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com

There is No Stage 5

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story

I don’t know when I dozed off, but it was sometime after watching the mercilessly utilitarian clock above the door turn one. I do know when I awoke.

The petite night-duty nurse, in for her 3:00 rounds, was saying, “Wait – wait, Ms. Jean. Let me unplug you.”

Unplug? Unplug? Scary things come to mind when that word is uttered in a hospital room.

And as I stirred to wakefulness I saw the unbelievable: my mother, not 10 hours out of surgery – and who had not eaten for two weeks – was struggling to get out of bed to use the restroom. “Lollipop,” she said, using a nickname I probably last heard when I was three, “Lollipop, can you grab the blanket so it doesn’t touch the floor? And see if you can find my robe and slippers.” No wristband ID confirmation necessary here.

My mother has Stage 4, primary-site pancreatic cancer; there is no Stage 5. She has multiple, large liver lesions, “hot-spots” on her bones, and a spot on one lung. When I arrived last Friday she was slipping in and out of consciousness, so jaundiced and gaunt she resembled the figure in Edvard Munch’s The Scream, if someone had taken a yellow highlighter to it.

Four o’clock Wednesday she was rushed into surgery to have a stent inserted into the common bile duct in hopes of making her more comfortable. Now here she was, not just intent on getting up, but on doing so under her own power – and with attention devoted to tangential issues. I half expected her to ask me if there were fresh guest towels in the bathroom and roses in the guestroom.

This woman, my mother, needs no urging from Dylan Thomas: she goes not gentle into that good night. I flew to Arizona assuming I would plan a funeral. Instead I have had truly intimate hours with a woman to whom intimacy does not come easily.

But no matter how feisty, how determined, how strong – or strong-willed – the person, pancreatic cancer always wins. Additionally, her cancer came as no surprise: my mother is a Wasserman, and it’s always cancer that kills Wasserman women.

The surprise came, rather, in what preparations remained unaddressed, issues that almost assuredly would have created unnecessary distress if she had slipped away last weekend as roundly anticipated by doctors and family alike.

The following is not intended to be a complete list of vitally-important documents, but it includes some biggies which can be easy to overlook.

1)      A professionally prepared, recently updated will. My parents have had a will for decades, but it was last updated 10 years ago and was woefully out of date.

2)      Trust documents.

3)      A professionally-prepared power of attorney.

4)      An advanced medical directive, prepared by an attorney.

5)      A letter of competency, prepared by a medical doctor who has known the patient dating back to the time the patient was mentally competent. I highlight this because this letter of competency can be almost impossible to obtain once the patient has lost mental competency – whether it’s due to the onset of dementia, a coma, or any other condition that might render the patient unable to make his/her own legal, medical, or financial decisions. I have included two samples, below.

6)      Home mortgage information.

7)      A list of bank and brokerage accounts, life insurance policies, annuities or other managed accounts, along with user-names, passwords, and account numbers.

8)      The whereabouts of the key to the safe deposit box.

9)      The whereabouts of any handguns. When my father died I thought ours was the only family who struggled to locate the handgun. I have since heard from many others who have had similar issues.

10)   Funeral and burial instructions, and documents for any pre-paid arrangements.

There is not much one can do to make the loss of a parent easier. But, there are many ways to make it harder – and a frantic search for crucial items can be a monumental source of distress.

Against all odds, against all professional assumptions, my mother came home today. But we all know the day is hard upon our heels when she will not come home at all.

But now at least we can devote these last days to her, rather than to a mad scramble to assemble critical documents.

If you have stories or experiences you would like to share, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant, President’s Club · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com

Below are sample letters of competency. I typically encourage family members to print these off for the attending physician so s/he is sure to include necessary elements:

Physician’s Letterhead Here

Date

To Whom It May Concern:

Jane Doe (DOB 06/06/30) has been a patient under the care of this medical practice since 19**. She has been seen on a regular basis throughout this time. Medical records indicate that at no time during her care has she lacked capacity to make independent legal, medical, and financial decisions.

Ms. Doe was diagnosed in (month, year) with _________. However, it is the professional opinion of this medical practice that this has in no way impaired her ability to make her own legal, medical, and financial decisions.

Feel free to contact me at (000) 123-4567 if you require further information.

Sincerely,

­­­­­­­­­­­­____________________________________

John Brown, MD

Or:

Date

To Whom It May Concern:

Jane Doe (DOB 06/06/30) has been a patient under the care of this medical practice since 19**. She has been seen on a regular basis throughout this time. Medical records indicate that until (month, year) she had mental capacity to make independent legal, medical, and financial decisions on her own.

Ms. Doe was diagnosed in (month, year) with dementia. It is the professional opinion of this medical practice that she no longer has the ability to make independent legal, medical, and financial decisions.

Feel free to contact me at (000) 123-4567 if you require further information.

Sincerely,

­­­­­­­­­­­­____________________________________
John Brown, MD 

Did you hear the one about the lawyer?

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, FHA HECM, Retirement Planning, Reverse Mortgage
Laurie MacNaughton

Friday I ran into the office to pick up some papers when the phone rang. It was a Virginia attorney with a knotty case involving a profoundly handicapped, aging client. “I’ve looked at many options,” the attorney said, “and I’m wondering if a reverse mortgage might be a solution.”

After describing the situation, the attorney mentioned, “This person has no one left who cares, and for my part, he’s really become more family than client.”

Not the first time

This was far from being the first time I have heard a similar story, so perhaps it was the direness of the client’s situation that made me reflect – reflect on the unwavering, unflagging, relentless effort Elder and Disability Law attorneys expend advocating for their clients. Reflect on the extraordinary measures attorneys go to in seeking justice for the vulnerable. Reflect on the care and concern – at times without pay – attorneys pour out protecting the seemingly forgotten members of our communities. I probably know a hundred Elder Law attorneys, and I can honestly say I can’t name one I would not entrust with the affairs of my own family.

I’m not naïve – I know there are bad lawyers, just as I know there are bad doctors, teachers and clergy. We all know there are bad loan officers – I’ve known some of them. Heck, over the years I’ve worked with some of them. But as a group, I would have to say lawyers get a disproportionately bad rap.

So here’s an open letter of thanks to the attorneys of our communities, those who spend time, talent, and at times even their own treasure, advocating, protecting, interceding on behalf of those whom many of us will never meet.

As one who also spends countless hours working out solutions for our seniors, personally I thank you. And please know I consider you among the unsung heroes of our age.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant, President’s Club · Middleburg Mortgage · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · Laurie@MiddleburgReverse.com

   Visit me on Facebook at www.facebook.com/MiddleburgReverseMortgage

Harland, Hindenburg…and Harney

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story
Laurie MacNaughton

April 15, 1912, while on its maiden voyage, the RMS Titanic struck an iceberg and sank within three hours. The ship carried far too few lifeboats, and 1,502 passengers and crew died. Harland and Wolff, who hired the naval architect, was not available for comment for this blogpost.

May 6, 1937, German airship Hindenburg caught fire, exploded, and plunged to the ground at Lakehurst Naval Air Station. Thirty-six people died. The German dirigible had not been designed to use hydrogen; rather, the Nazi government switched to the alternative gas when helium was not available. Neither the Hindenburg’s pilot nor its designer was available for comment for this piece.

Let’s add another historical tragedy:

According to a July 19, 2013 Washington Post article by Kenneth R. Harney, in 1997 Sarah C. Hoge took out a proprietary reverse mortgage. This private-label mortgage was not the FHA-insured reverse mortgage overwhelming represented by today’s reverse mortgages. The terms of Ms. Hoge’s mortgage were apparently horrendous, and her estate is still seeking resolution of issues caused by this terribly-designed product.

Early private-label, non FHA-insured reverse mortgages were filled with structural peril and some left true devastation in their wake; few reasonable minds differ on this point.

The Post’s Mr. Harney, however, appears either remarkably biased against today’s reverse mortgages, or woefully uninformed on their basic tenets, as evidenced by his statement, “Reverse mortgages…can be…potentially costly for [elderly borrowers’] heirs.” I respectfully refer him to the FHA HECM website http://www.hud.gov/, specifically section 6 which states, “No debt is passed along to the estate or heirs.”

Mr. Harney, if you are seeking a crusade, let me recommend you turn your sites toward the proliferation of hard-money lenders, the financial source some seniors seek out when scared away from the FHA-insured reverse mortgage – by articles such as yours, as self-reported by seniors themselves. This scaremongering is unbefitting a contributor to a reputable publication, and is a tragedy in its own right.

The historical movement of tragedy is regulation, redesign, redress and remediation – whether we’re speaking on topics of engineering, medical techniques, political systems – or financial products. As it has matured into the mainstream of financial products, reverse mortgage has gone through these selfsame stages, and has come out far better for it. I believe I am not alone in wishing journalism would go through its own maturation process, moving from sensationalistic pieces to well-researched reporting.

The FHA-insured reverse mortgage is never going to be the full solution to financial needs in retirement. However, when used as part of a comprehensive financial plan, it is going to be an increasingly important part of funding Americans’ ever-increasing longevity. Irresponsible or ill-informed reporting does no one any favors – not seniors, not their heirs, and not an esteemed publication.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · 20937 Ashburn Road, Suite 115 · Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgReverseLady.com

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

Don’t Tell Me You Missed National Nursing Home Week?

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, FHA HECM, Retirement Planning, Reverse Mortgage

Last month’s National Nursing Home week is unlikely to ever find itself prominent on calendars across America. Why do I say this? Primarily because the vast majority of Americans want to remain as long as possible in their own home.

Anyone surprised?

This being said, however, as a reverse mortgage specialist who deals every day with aging-related housing matters, I can attest to the fact there are issues to address when planning for aging in place.

Common considerations include:

  • Are homeowners able to take care of daily needs – or is in-home care required?
  • Are there available community resources, such as day centers, medical facilities, recreation, and transportation?
  • Do homeowners have family, friends, neighbors, or a faith community who can be involved in their care?

But the biggest factor is the home itself, as most homes were not built with aging in place in mind. For this reason, homeowners must ask themselves if their current home can be adapted to meet their needs as they age.

Fortunately for those of us in the greater Washington, D.C. area, close by are some of the nation’s most recognized contractors specializing in retrofitting homes to meet the needs of aging occupants.

Aging in place adaptations usually involve three elements, including:

1)    adding hardware such as grab bars, lever-handled faucets, and hand-held showerheads;

2)    installing ramps, lifts, and extra lighting;

3)    making architectural changes such as wider doorways and curbless shower stalls, and relocating master bedrooms, full baths, and laundry rooms to the main floor.

While some modifications can be done by a general handyman, larger projects, particularly ones involving actual design changes, should be done by a contractor specializing in aging in place remodeling. Specialists who carry the Certified Aging in Place Specialist, or CAPS, designation are typically the most versed on industry standards and age-related modifications.

While some municipalities offer low-cost or no-interest home modification loans to seniors, these are not universally available, and often are for relatively small amounts. Additionally, many include a monthly repayment schedule.

Reverse mortgage fits perfectly into home modification needs, as there is never a monthly mortgage payment required. When the last homeowner permanently leaves the home, the loan is repaid, and all remaining equity goes to the senior or to the heirs or estate.

Reverse mortgage is never going to be the full solution to financial needs in retirement. However, when used as part of a comprehensive financial plan, it is going to be an increasingly important part of funding our ever-increasing longevity.

If you are, or someone you know is, looking into reverse mortgage, give me a call – I always love hearing from you.

    Laurie

 Laurie Denker MacNaughton[NMLS# 506562]∙ Reverse Mortgage Consultant, President’s Club∙ Middleburg Mortgage, a Division of Middleburg Bank ∙ 20937 Ashburn Road∙ Ashburn, VA 20147∙ 703-477-1183 Direct ∙ LMacNaughton@MiddleburgBank.com

Visit my informational blog at:  MiddleburgReverseLady.com

Planners who Plan, Fixes that Fix – and Real Solutions for Real Life

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, FHA HECM, Retirement Planning, Reverse Mortgage

Solutions Looking for a Problem

I stood at the paper towel machine waving my hands like a feeble magician trying to conjure paper towels when the thought occurred to me: I frankly can’t remember the last time I heard someone complain about pulling a paper towel from a dispenser. Self-dispensing paper towels solve a problem that was never a problem.

This got me to thinking: how many other fixes fix problems that aren’t problems? And if you can believe it, I actually came up with several – but that’s a different commentary altogether. It’s the corollary that hit home.

Finite choices

Remember functions? Those funky f(x) equations in math class? Basically, a function is a set of inputs and their corresponding outputs. Put another way, a function says if I do this, I get that – one solution for each problem. There is a finite list of outcomes.

Fortunately, most day-to-day issues are not direct functions, and multiple solutions exist for many of life’s problems. But often, the farther one travels into retirement the more limited the solution set becomes. Options become limited and outcome becomes a direct function of input.

Larger solution sets

In what I consider one of the most encouraging transformations in the history of the reverse mortgage product, I am seeing a regular stream of clients referred from the financial planning community. Seniors seeking informed input are turning to an informed source, namely their financial professional. Of course, I’ll never know how many financial professionals steer their senior clients away from reverse mortgage – but I do know an increasing number tell me they view reverse mortgage as a legitimate financial tool when used in concert with a comprehensive financial plan.

Financial professionals refer clients well before catastrophe strikes, before clients’ means have dwindled, before financial limits are reached – before the financial boat plunges over the cliff of desperation. Planners understand multiple inputs equal a bigger solution set.

Real solutions for real life

I hear the same stories everyone else in the financial industry hears: seniors unable to return to full-time employment. A spouse lost, and the resulting 50% drop in income. A catastrophic event – or a chronic condition that became financially catastrophic. Or, simply, too much life left at the end of the money.

Unlike the motion-detecting paper towel dispenser, reverse mortgage is a real solution to a real problem.  When put in place preemptively, before it’s just a crisis management tool, reverse mortgage can be part of a sound retirement plan that maintains independence as long as possible and slows burn-through on other retirement instruments.

If you are – or someone you know is – looking for ways to increase financial options, give me a call. I always love hearing from you.

Laurie

Laurie Denker MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant, President’s Club · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 · Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com · www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

Good time to Buy? Oh Yeah

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, Retirement Planning

This week there was good news on the economic front: the May 17 Thompson Reuters/University of  Michigan preliminary index of consumer confidence posted the strongest gain since July 2007. In addition to this news was the Conference Board’s higher-than-forecast growth projections for the coming three to six months.

Jim O’Sullivan chief economist at High Frequency Economics in Valhalla, New York, says consumers’ gain in confidence “is testimony to underlying growth in spending power.”

Home Prices

The biggest winner was housing prices, which historically have represented the biggest portion of household wealth. The S&P/Case-Shiller index of home values shows housing prices in 20 markets 9.3 percent higher than a year ago.

This is good news for those selling their existing home. However, there is still good news for those looking to purchase: interest rates remain at or near all-time lows, boosting purchasing power when shopping for a new home.

Purchase Your Retirement Home

The FHA HECM for Purchase is an outstanding seniors’-only home purchase product for homebuyers aged 62 or older. Since there is never a monthly mortgage payment required, seniors have access to more of their monthly income as they move further into retirement.

If you are aged 62 or older and are looking to purchase a home, give me a call. HECM for Purchase may be the perfect way to get you into your new retirement home.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant, President’s Club · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

The Incredible Journey Revisited

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story

Today was one of those days – filled with one weird difficulty after another. But late in the afternoon my phone rang. It was Lisa Thomas, inviting me to her grandmother’s 88th birthday party.

It has been a couple years since I have thought deeply about what came to be called The Thomas Project. But hearing Lisa’s voice made me track down the piece that originally ran in a Loudoun County publication. The intervening years have made the story seem even more remarkable than it did at the time.

Loudoun County Area Volunteers Assist Elderly Couple

September 2011

In 1952 when Ed Thomas and his bride Virginia bought a home on the outskirts of Leesburg they were young, full of expectation, and looking forward to life together.

It was in this small wooden home that Ed and Virginia raised their children, played with their grandchildren, and experienced the joys and hardships that make up the fabric of life.

But by 2009, both Ed, now ill with cancer, and Virginia, suffering from diabetes, had had extensive medical procedures and were hospitalized. They wanted nothing more, however, than to live out their days in the home they had shared for more than fifty years.

The home, however, was now uninhabitable: the toilet had partially fallen through the floorboards, an exterior bearing wall had major damage, the chimney had collapsed, there was no central heating, and the front steps had rotted and fallen off the porch. Both the home and yard were filled with decades’ worth of cast-offs belonging to extended family. Restoring the home to a livable condition was beyond their reach.

Beyond their reach, that is, until the Thomases’ granddaughter, Lisa Thomas, contacted Laurie MacNaughton, reverse mortgage specialist with Wells Fargo Home Mortgage. MacNaughton, after fruitless calls to multiple local organizations, contacted Round Hill United Methodist Church of Round Hill, Virginia, which counts several contractors among its members. Professionals from the congregation inspected the home and agreed to take on the project.

“Our goal, plain and simple, was to repair the Thomases’ home to habitable condition. They spent their entire married life there, and understandably they want to spend their final days together in their home. There are those of us in the Leesburg area with the professional skills necessary to carry out this project, and the determination to make it happen,” says Steve Simons, area manager of Handyman Matters.

Manpower for the ground-up renovation was provided by professionals and volunteers from Round Hill United Methodist Church and the local community. The Home Depot in Leesburg supplied building materials, and McCrea Heating and Air provided an HVAC unit. Thousands of man-hours over the course of more than two years, and overseen by Handyman Matters’ Simons, went into the reconstruction.

“I am so overwhelmed and blessed that there are actually people in this world willing to help,” says Lisa Thomas, granddaughter of Ed and Virginia. “For a year I tried to help my grandparents get back into their home, but I didn’t have the resources to make it happen. All my grandparents wanted was to be together again. Round Hill [Methodist Church] has done a wonderful thing. Steve [Simons] has been amazing. And none of this could have happened without Laurie [MacNaughton]. Honestly, I have to keep pinching myself to be sure is really happening.”

“This entire journey has been one of a church’s and a community’s generosity, love, and remarkable perseverance,” says MacNaughton. “I think of it as ‘NIMBY’ in reverse. This community came together and said, ‘We simply are not going to know about this kind of suffering in our own backyard and just turn our back. As long as we have the ability to remedy this, we are putting our hand to the plow.’ I only wish Mr. Thomas had lived to see this day.”

The Thomas home is now fully complete, and has all the charm associated with a grandmother’s cottage. It has been outfitted with handicapped-accessible amenities, including a roll-in shower, transfer toilet, wide doorways, and a specially designed kitchen.

On September 28th the extended Thomas family, along with members of Round Hill Methodist Church and the community, will welcome Virginia Thomas home with a ribbon-cutting ceremony and celebration.

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant, President’s Club · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com ·  www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

Adult Children Supporting Aging Parents – The Gift That Keeps on Taking

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story

A question I get asked a lot is whether I run into greedy adult kids who don’t want their parents to do a reverse mortgage.

Answer? Yes. But rarely.

More common by far is the family I met with Sunday – a wonderful, functional extended family which includes two adult sons and their widowed mother. Since their father’s passing three years ago the sons have been supplementing their mother’s meager income. However, each son has children approaching the college years, and the mother’s medical expenses are on the rise. They know they cannot continue supporting their mother at the current pace.

The gift that keeps on taking

We all have heard one thing or another referred to as “a gift that keeps on giving.” I have come to call the financial support of an aging parent by an adult child “the gift that keeps on taking.” Money the adult child should be setting aside for retirement is instead being gifted to an aging parent to augment insufficient income.

A short aside about gifting

Currently you can gift another person $14,000 per year before hitting a tax liability. This is called the annual gift exclusion.

In addition to what you can give per year, there is a lifetime exclusion. In 2013 the lifetime exclusion is set at $5.12 million. Gifts that exceed the annual $14,000 limit count against the lifetime exclusion. Frankly, for most Americans this is not an issue. However, if you do go over this amount, the tax liability packs a wallop.

And just exactly how big a wallop? Up to a cool 35%.

Gifting among family members is often under the table. However, make no mistake: this is not a gray area. The IRS requires you to keep tabs on your gifts – and to report these gifts – so it will know how much of your lifetime exclusion has been used up when you die. If the Internal Revenue Service catches you exceeding the annual amount, you will pay taxes, interest, and penalties.

Meanwhile, back to…

Sunday’s family. Not only are the two sons are supporting their mother with after-tax earnings, but over the past couple years they have found themselves having to watch the annual gift exclusion. This is a pricy fix – and one that has long-term implications.

For the average family, the biggest financial boon an aging parent can give an adult child is financial self-sufficiency. This increases the likelihood adult children will head into their own retirement with savings intact.

Life is long and getting longer. Medical costs are high and getting higher. And few people get 10 years down the road into retirement and find themselves financially better off.

Reverse mortgage is not a fit for everyone. But for many, not only is it a good option – it is an excellent option. It lifts the burden on the upcoming generation and allows seniors to live out their final years in dignity, comfort and independence.

If you are – or someone you know is – considering a reverse mortgage, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · Middleburg Mortgage, a Division of Middleburg Bank ·  20937 Ashburn Road, Suite 115 · Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com · www.middleburgmortgage.com/lauriem

Retirement Advice for the Gentler Sex

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story

I like to ask questions, and one of my favorite is, “If you’re a baby boomer, what is your life expectancy?” The most common answer? 78.

Reality is, however, that one in three Americans live to at least 85, and most of these are women. So, as a woman, if your financial plans don’t include at least a decade of leeway the later retirement years can be tricky.

Below is a list of some of the best advice I have compiled regarding retirement.

  1. Continue working part-time during retirement. A wealth manager friend of mine likes to say, “Retirement is a journey, not a destination,” and increasingly seniors seem to assume this will be the case. In fact, according to a recent Pew Research study 3 out of 5 seniors plan to work at least part-time for as long as they can in order to delay a draw-down of savings.
  2. Continue to save. For most people, it’s unrealistic to save enough during the peak earning years to amass a nest egg large enough to carry them through retirement. However, even if you work part-time, put some of those earnings aside. It can make a huge difference.
  3. Don’t assume moving to a location with low housing prices makes your retirement savings go farther. While it may be true that cheap housing translates into a lower cost of living, that is not a given. Several states with low housing costs have high sales tax and high homeowners insurance. Savings from low housing prices can quickly be eaten up by high costs elsewhere.
  4. Lower taxes in retirement? Be careful here. You may very well be in a lower tax bracket once you retire, but as a percentage of income your taxes are likely to be greater. Furthermore, once retired you are likely to lose certain deductions and exemptions. So when planning, be realistic in calculating your tax burden.
  5. Don’t assume long-term care will come to the rescue. Here’s a fact I only recently became aware of: according to data available from U.S. Department of Health and Human Services, many long-term insurance plans only pay out for two to five years. For this reason it is very important to plan a many-pronged approach to long-term care. One misconception I hear frequently is that Medicare or Medicaid will pay for nursing home or in-home care. The issues surrounding government-sponsored care is so complex that there are attorneys who specialize just in these matters. An uninformed – or misinformed – spend-down can have very bad consequences, so be sure to seek counsel before spending down assets in order to qualify for benefits.
  6. I love my job and will work to my dying day. Frankly, I feel the same way. However, barring acquisition of a crystal ball, you just can’t count on working forever as part of your retirement strategy.
  7. Look into reverse mortgage. According to a recent report by the Boston College Center for Retirement Research, adding funds from a reverse mortgage significantly boosts financial wellness in retirement.

Reverse mortgage was never intended to be a replacement for a sound financial retirement plan. However, it can play an important role in augmenting what is already in place, and slow the burn-through rate on other retirement instruments.

Give me a call and let’s talk.

Laurie

Laurie Denker MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant, President’s Club · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com · www.middleburgmortgage.com/lauriem

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/