Tag: Financial Planning

Silver Separation and the Forty-Year Itch

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

They call it Silver Separation, or the Forty-Year Itch, and it’s one of the nation’s fastest-growing trends: divorce among couples aged 60 and older. In fact, though divorce rates nationally have dropped over the past decade, among older baby boomers divorce rates have risen more than 50%, according to a 2012 study published in the academic journal Gerontologist.

Experts cite many reasons for this trend, including longevity, greater financial independence among women, and less social stigma toward the divorced.

A study conducted by Bowling Green State University states, “Lengthening life expectancies decrease the likelihood that marriages will end through death and increase the length of exposure to the risk of divorce.”

For many, retirement becomes the watershed moment: kids are grown and gone, career battles fought, most major life-choices made.

“It’s a time some boomers look around and ask, ‘Is this how I want to spend the next 30 years?'” says Beth Von Keller, an elder law attorney in Manassas, Virginia. “In some cases a spouse decides the answer is “no.'”

However, later-life divorce can create vulnerabilities. “When older couples divorce, there is less time to recover financially,” Von Keller states. “Also, historically husbands and wives played a major role in spousal caregiving, and couples relied upon each other for emotional support. That falls away when older couples divorce.”

No one plans to divorce, but no life unfolds according to plan. And no amount of planning can insulate one from the unexpected. However, a solid “Plan B” can determine how successfully one navigates a new reality.

Reverse mortgage can play an important role in later-life divorce, providing funds for property settlements where one party wishes to remain in the home. It can also be an important means of income stream replacement.

If you need – or someone you know needs – to assess options, 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 ∙ Ashburn, VA 20147 ∙ 703-477-1183 Direct ∙ LMacNaughton@MiddleburgBank.com ∙ www.MiddleburgReverse.com

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/