7 Ways to Use a Reverse Mortgage as a Financial Planning Tool

In the past, the main purpose of a Reverse Mortgage was to help seniors to fulfill cash needs by allowing them to pull the equity in their homes. But today, many seniors are finding that even if they don’t particularly need to fulfill a cash need, they can take advantage of the benefits of a reverse mortgage as a tool to use strategically in retirement planning. Here are 7 ways a reverse mortgage be used as a financial planning tool.

 
    You can delay Social Security and pension payouts

Some seniors may financially need to use payouts from Social Security and pensions as soon as they are available. However, with the cash from your reverse mortgage, you will be financially sound enough to wait on receiving those payouts, thus increasing how much you receive.

    You can postpone drawing down retirement assets, giving assets time to grow


This idea follows the same formula as your Social Security and Pension payouts. The longer you can delay in receiving your benefits, the longer they have to grow. With a reverse mortgage, you can afford to wait.



    You can increase your cash flow by eliminating monthly mortgage payments

Every month, a monthly mortgage payment takes a chunk out from your income. But with a reverse mortgage, your existing mortgage is paid off. This leaves you with extra money in your pocket that would have normally gone to paying your existing mortgage.

    You have access to a low cost, non-cancellable, GROWING line of credit

With a reverse mortgage, you have an ever-growing line of credit available to you. It grows with time. This means that the line of credit available to you years from now will be much larger than the line of credit available to you now.

    You can protect your portfolio performance in a down market

In a down market, your portfolio and cash flow may not be at its peak performance. With a reverse mortgage, the incoming funds are able to protect you until the market picks back up again.

    You can have annuity-style payments using your home’s equity

With a reverse mortgage, you are able to choose the option of receiving your funds in annuity-style payments. This is perfect for some types of people who would rather plan their income as a steady flow.

    You can replace cash reserves

Some people have less cash in reserve than they would like. A reverse mortgage gives you the chance to catch up and replace your cash reserves, getting you up to speed financially.

These are just a few examples of how you can use a reverse mortgage as a strategic tool. With the right plan in place, you will be well on your way to a solid retirement.

These are just a few examples of how you can use a reverse mortgage as a strategic tool. With the right plan in place, you will be well on your way to a solid retirement.

source: everythingfinanceblog.com

For seniors, hearing trouble linked to greater risk of death

Older adults with hearing impairment may have a higher risk of dying than people with normal hearing, a recent study suggests.

The reasons for the connection are not clear, researchers say, but the results point to hearing impairment at least as a sign of, and possibly a contributor to an older person’s survival odds.

“In the simplest terms, the worse the patient's hearing loss, the greater the risk of death,” lead author Kevin Contrera said of the study’s findings.

Past research has linked hearing problems to a variety of negative health effects, but few studies have looked directly at mortality risk, Contrera and his colleagues write in JAMA Otolaryngology–Head and Neck Surgery.

Two thirds of adults over 70 experience hearing impairment, said Contrera, a medical student at Johns Hopkins University School of Medicine in Baltimore, Maryland.

He and his colleagues looked at data on 1,666 adults from a nationally representative survey conducted in 2005-2006 and 2009-2010, as well as death records through the end of 2011.

The people included in the analysis were all over age 70 and had undergone hearing testing. Using World Health Organization criteria to define hearing impairment, and accounting for individuals’ age, the researchers found that people with moderate or severe hearing impairment had a 54 percent greater risk of dying than those with normal hearing. Mild hearing impairment was linked to a 27 percent increased risk.

The researchers then also adjusted for more variables that could influence hearing and death risk, including sex, race, and education, as well as heart risk factors, like stroke, smoking, diabetes, high blood pressure and heart disease.

Even after accounting for those factors, the study team found that people with moderately or severely impaired hearing had a 39 percent higher risk of death than those without hearing problems, and those with mild hearing impairment had a 21 percent greater risk.

Piers Dawes, who was not involved in the new study, notes that hearing impairment can directly affect a person’s health and wellbeing.

Older people with hearing loss tend to have more difficulty with communication, are more socially isolated, and are less able to care for their own long-term health conditions, said Dawes, a hearing loss researcher who teaches at the University of Manchester in the U.K.

“These sorts of secondary problems could potentially impact on health, wellbeing and mortality,” he said.

The study observed the link between hearing problems and death, but more research is needed to know if hearing loss is somehow a contributing cause, Contrera cautioned.

For instance, the researchers did not investigate whether treating hearing impairment reduces the risk of death, which would help to clarify the relationship.

In his own research, Dawes noted, “Among people with hearing loss, hearing aid use was linked to better communication and better general health, but not with reduced risk of mortality.”

A majority of older people suffer from hearing impairment, Dawes said, and hearing loss could just be a marker of being older and sicker in general.

Although the study focused on seniors, the findings may have value for people of all ages, Contrera said. “Although hearing loss is most common in older ages, certainly the earlier the treatment, the better,” he said in an email.

Addressing hearing problems using "communication tactics, hearing aids, or wireless communication devices could promote social engagement, increased physical activity and better communication with doctors and other health professionals,” Dawes said

These positive effects could, in turn, reduce mortality risk, he said.

“Hearing loss should be appropriately identified and treated in patients whenever possible,” Contrera said.

source: www.abs-cbnnews.com

Bob Dylan, 'wise' at 73, gives album free to seniors

NEW YORK, United States - Bob Dylan is giving away his latest album for free to select seniors as the 73-year-old rock legend says he is at peace with getting older.

Dylan's 36th studio album, "Shadows in the Night," which interprets songs by Frank Sinatra, will be mailed at random to 50,000 readers of AARP's magazine, which is sent to some 35 million Americans age 50 or older.

Speaking to the magazine in a rare interview, Dylan expected that members of the AARP -- which originally stood for the American Association of Retired Persons -- would enjoy the album and said he has learned that "passion is a young man's game."

"Older people gotta be more wise. I mean, you're around awhile, you leave certain things to the young. Don't try to act like you're young. You could really hurt yourself," said Dylan, who nonetheless maintains a rigorous touring schedule.

Dylan's move on "Shadows in the Night," which goes on sale on February 3, comes after U2 last year gave its album for free to the half billion users of iTunes.

Apple had hoped that the surprise gift would promote its latest iPhone, but instead received many complaints by users who did not want to hear from the Irish superstars.

Dylan, who was a major figure in the 1960s counterculture but has not directly affiliated himself with political movements, also called in the AARP interview for wealthy Americans to do more to create jobs.

"The government's not going to create jobs. It doesn't have to. People have to create jobs, and these big billionaires are the ones who can do it," he said.

"We see crime and inner cities exploding with people who have nothing to do, turning to drink and drugs. They could all have work created for them by all these hotshot billionaires," said Dylan, who stressed: "I'm not talking about communism."

Dylan's commentary came even though he complained in the interview that people ask him too often about topics other than music.

"People have been doing that to me since the '60s -- they ask questions like they would ask a medical doctor or a psychiatrist or a professor or a politician. Why? Why are you asking me these things?"

source: www.abs-cbnnews.com

U.S. targets financial abuse of elderly

Americans over 60 lost at least $2.9 billion in 2010 to financial exploitation, a study finds. This 12% rise over two years is leading the Consumer Financial Protection Bureau to begin looking into the types of scams affecting older consumers.



WASHINGTON — Federal regulators launched an investigation into the financial abuse of the elderly, citing a new report that advisors, planners, family members and others were ripping off seniors more than ever.

Americans over 60 lost at least $2.9 billion in 2010 to financial exploitation — ranging from simple home repair scams to complex insurance swindles. That figure was up 12% from 2008, according to a study released Thursday by MetLife Mature Market Institute, the National Committee for Prevention of Elder Abuse and Virginia Tech University.

The rise in abusive tactics led the Consumer Financial Protection Bureau to begin looking into the types of scams affecting older Americans and coming up with the best ways to prevent them. A specific focus will be on the credentials of people who tout themselves as financial advisors.

"The silent crime of financially exploiting the elderly is widespread, and it is devastating. It is critical for us to act," Richard Cordray, the agency's director, said at a White House forum Thursday ahead of World Elder Abuse Awareness Day.

"The generation that rebuilt and sustained this nation out of a devastating Depression, the dark hours of World War II and the anxious fears of the Cold War deserve our care now," Cordray said.

Tougher oversight by regulators is needed to prevent financial predators from preying on vulnerable elderly victims, said Patricia L. McGinnis, executive director of California Advocates for Nursing Home Reform, a San Francisco group that often deals with financial abuse.

"The bottom line is, you need to go after the predators. You need to punish them and you need to convict them," she said. "Put them in jail and make an example of them, but more importantly, get the money back for that victim. Make them whole again."

McGinnis described efforts by regulators and advocates to prevent the scamming of older Americans as a game of Whac-A-Mole.

A recent scam enticed senior citizens to put large amounts of savings into deferred annuities, reducing their savings to qualify for a particular federal veterans benefit. The veteran might get $1,000 a month from the benefit, but loses access to the cash for years. Meantime, the annuity salesperson earned a commission of 8% to 12%, she said.

Victims often are reluctant to fight back.

"I can't tell you the times I talk to people and they say, 'It was my own fault,'" McGinnis said. "They are very embarrassed."

The scams have increased as the economy has struggled. Survey results released this week by the nonprofit Investor Protection Trust found that 84% of experts who deal with financial exploitation of the elderly said the problem has worsened.

But there is a lack of comprehensive information on the problem, which the consumer bureau's inquiry could help solve, said Elizabeth Costle, director of the consumer and state affairs team at the AARP Public Policy Institute.

Financial predators often target the elderly because they are viewed as gullible, Cordray said.

"Many seniors have routines, and their predictable patterns make them easier targets for predators," Cordray said. "Abusers often assume that the victim will be too embarrassed or too frail to pursue legal action against them, and unfortunately that assumption is too often proven to be correct."

The agency's inquiry seeks comments from the public on several issues. They include detailing the unfair, deceptive and abusive practices targeted at the elderly, finding the types of financial planning resources, and evaluating the credentials of financial advisors. The agency will be accepting public comments until Aug. 13.

Cordray said that some people who tout themselves as experts on elderly financial issues have had only a few hours of inadequate training.

"We need to distinguish between the true experts and those engaged in predatory conduct," he said.

The qualifications of financial advisors are important as new retirees must decide what to do with lump-sum 401(k) payouts and often must juggle many complex options, Costle said. The ability to understand those options gets more difficult as people age.

"As people get older, particularly up into their 80s ….they're just less able to process financial information," she said. "They're more likely to be trusting of people and they open themselves up to more abuse, which is perpetrated both by strangers and by caregivers and family members who are close to them."

Congress and the White House have increased their focus on the issue.

Lawmakers included the Elder Justice Act in the 2010 healthcare reform law to coordinate federal efforts. As part of the law, Health and Human Services Secretary Kathleen Sebelius on Thursday announced $5.5 million in grants to states to "test ways to prevent elder abuse, neglect and exploitation."

source: latimes.com