An Alternative to Nursing Homes With the Reverse Mortgage
When I recommend and go over the in’s and out’s of reverse mortgages with clients, one of the fears they have is that that the reverse mortgage will become due and payable if their health fails and they need to move into a nursing home.
However, a reverse mortgage is one of the retirement planning strategies that can be used to secure long-term, in home care without having to move from the comfort of your home.
According to data collected by Genworth Financial, Inc., a private room in a nursing home in Florida is more than double the cost of receiving long-term, in-home care. On average, homemaker services and home health aide cost around $40,000 per year while a private room costs, on average, $90,000.
Most importantly, in home care costs are projected to rise only 1% in the next five years while nursing home costs are expected to rise at least 4% in the next five years. As nursing home costs become more expensive, especially compared to in-home care, seniors may look to alternative methods of insurance for their retirement or their spouse’s retirement.
In addition, a reverse mortgage can also help pay for adult day care services, if a family member is also the primary caregiver. At around $15k a year, with the potential for 2% growth in the next five years, adult day care may be the alternative some are looking for if they are able to take of their caregivers in the early morning or late afternoon without putting a dent in their pocket.
As one of the most flexible loans available for seniors, there continue to be plenty of ways to use reverse mortgages to supplement retirement as they are an effective way to plan for the unexpected.
Planning for the possibility of long-term care is simply another safeguard for seniors who are planning their retirement carefully and considering every angle.
In some cases, the children or relatives of seniors who are in need of long-term healthcare might have to incur the financial responsibility of having a loved one in a nursing home. With a reverse mortgage, a loved one does not to put a strain on their own pocket and can use a reverse mortgage (and the equity their loved one paid for their whole lives) to help them out during their time of need.
Presently, home equity is one of the biggest sources of wealth among baby boomers; the time to use home equity to make retirement more comfortable is now. Whether other methods of retirement on already in place, borrowers should consider future unexpected expenses as well as the financial stability of their family members if they were to fall ill or need a considerable amount of funds quickly.
At a time when retirement is not clearly defined and things continue to change, why not be prepared for anything and everything?
Interested in a reverse mortgage or simply want more information? Give PS Financial Services a call at (888) 845-6630 or via email at info@PSReverseMortgage.com.