Our blog post features David Parker from Your Reverse Mortgage Resource

I talk with a lot of retirees in my capacity as a loan officer specializing in reverse mortgages. While you would think you could make a simple calculation and figure out a “magic” number it is not that easy.

Lets say your cash flow (income minus expenses) would be positive if you were to retire today. What is the most likely scenario as you age? In almost all cases, your income over time will decrease while your expenses increase.

If you have a pension, will it end for your spouse if you die? 70% of retiring workers pick the higher option that ends when they die. If you die, your spouse also loses the lower of your two social security incomes.

While health care insurance can be obtained cheaply for most retirees this doesn’t cover long-term care done in your home or in an assisted living facility. 20-hour per week non-nursing in-home care can cost at least $1000 per month while assisted living can cost from $3000 to $6000 a month. What is the likelihood you will need that? Can you get family or friends to support you instead? How do you plan for such a large expense? Do you buy long-term care insurance? Can you even get it now?

If you have a new medical condition, it can add up to $800 per month in prescription drug costs. Generic versions of most drugs can be obtained very cheaply but some drugs have no generic versions. How do you plan for that? What about hospital stays? What are the limits to your coverage? When does your family have to start paying?

A reverse mortgage cannot fix all financial woes. It is just a tool to access your equity and help pay for these and other things without messing up your cash flow.

Dave Parker
602-750-8166
ParkerInReverse.com
At The Lending Company

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