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A Tale of Two Widows With Harlan Accola
Episode 299
“If anyone does not provide for his own, and especially for those of his household, he has denied the faith and is worse than an unbeliever.” 1 Timothy 5:8
It’s a pleasure to welcome Harlan Accola back to the program. Harlan is with Movement Mortgage, an underwriter of this program. He is also the author of Home Equity and Reverse Mortgages: The Cinderella of the Baby Boomer Retirement.
WHY ARE REVERSE MORTGAGES REFERRED TO AS THE CINDERELLA OF RETIREMENT PLANNING?
- Reverse mortgages are seen as the Cinderella of retirement planning because they have been underestimated but hold significant potential for aiding in financial stability, especially for widows.
- These government-insured tools have been marginalized but can provide significant help for those living longer, particularly by offering financial support without the burden of monthly repayments.
- The concept resonates with the Cinderella story due to its transformative potential and the gradual recognition of its value in the retirement planning space.
WHAT IS THE TYPICAL FINANCIAL CONDITION OF MANY WIDOWS?
- Many widows end up in poverty post their spouse's demise. Currently, 20% of women over 65 are in poverty, and that number is increasing.
- Half of women over 65 are single.
- Most live only on social security.
- 50% live into their 90s, while only 30% of men make it into their nineties.
- Women are four times more likely to outlive their spouses.
- 85% of people over 85 are widows.
- After a spouse's death, income usually decreases by 40% because only one social security check continues.
HOW CAN REVERSE MORTGAGES AID?
Reverse mortgages can provide financial relief by allowing access to home equity without requiring monthly repayments, thus offering a consistent income stream to manage living expenses and maintain a standard of living.
WHAT ARE SOME SPECIFIC WAYS REVERSE MORTGAGES CAN BE USED TO AID WIDOWS?
- Delaying Social Security: Reverse mortgages can help individuals delay taking Social Security benefits, thereby increasing the eventual payout and providing a larger financial safety net.
- Long-term Care: It can be used for covering long-term care expenses, often a significant financial burden, without depleting other retirement savings drastically.
- Increasing Generosity: By alleviating financial strain, reverse mortgages can enable individuals to continue or even increase their charitable giving, as they find more financial flexibility.
- Provides Peace of Mind: Utilizing a reverse mortgage can offer significant peace of mind by securing a source of income and potentially freeing up resources for other necessary or desired expenses.
WHY IS IT CHALLENGING FOR PEOPLE TO UNDERSTAND THE BENEFIT OF REVERSE MORTGAGES?
- Cultural Perception: Reverse mortgages are often seen negatively due to cultural misconceptions and the general aversion to debt, despite being a unique form of debt with no mandatory monthly payments.
- Misinformation: There's a lack of understanding and misinformation about how reverse mortgages work, their safety, and their place in a comprehensive retirement plan.
- Stewardship Aspect: Understanding reverse mortgages as a form of stewardship, using all resources God has provided wisely, including home equity, is crucial but often overlooked in the broader context of financial planning.
SUMMARY AND FINAL THOUGHTS ON REVERSE MORTGAGES AND WIDOWS<
Published on 1 year, 11 months ago