Can Reverse Mortgages Save Baby Boomers During Retirement? In a previous blog post, I talked about changing the way baby boomers look at retirement because many are unprepared for what is coming in their later years. The unpredictability of long-term care insurance companies are becoming more predictable as many seniors, and everyone else, hold their breath waiting for the latest change to come.

What used to be a sure thing 20 to 30 years ago, when seniors began to research and pay for their current insurance policies, is no longer a sure thing.

In an article published today in Reverse Mortgage Daily, based on an article by the Wall Street Journal, the biggest culprit seems to be insurance companies underestimating the current rising costs of living and the amount of seniors who would go on to use their benefits after buying policies in the 1980’s and 1990’s. The reality is that as more retirees look to their insurance premiums for help, the more the cost of these premiums will rise, as insurance companies struggle to account for the unexpected business. One of the factors of the high spike in prices has also been attributed to policy holders essentially underpaying their premiums from the beginning. In fact, if insurance companies could have predicted the high use of insurance policies, coupled with rising costs of assisted living facilities and in-home care, they would’ve risen their prices at least 35%.

These premiums, however, only cover short stays at nursing homes or limited in-home care, while Medicaid will only help seniors, AFTER they’ve become impoverished, by paying for the basic level of health care. 

The situation seniors are facing is toe to toe with students hoping, or attending, college. Some are too “rich” to receive financial aid but too “poor” to pay for their tuition out of pocket. As the student debt rises, students might also find themselves up the creek without a battle and nowhere to turn for help. The difference between seniors and students though is the possibility of a reverse mortgage. Seniors, 62 years of age and older, who live in their primary residence, and have enough equity in their home, can apply for a reverse mortgage to help pay for their long-term care. At PS Financial Services, we help seniors find the right option for them because we don’t work with just one lender. We find the best fit for your situation, not the other way around. It’s time to stop waiting for things to get better. It’s time to realize living costs are going up and look at the options you have at your finger tips. We do not pressure those who inquire, we are simply here to help you live comfortably during retirement.