Are you struggling with a Fixed income in Retirement?
In the course of my practice as a Reverse Mortgage Professional I come across a lot of retirement statistics and data surrounding seniors in America.
This morning I read an article produced by Reverse Mortgage Daily entitled “One in three U.S. Households will be 65+ by 2035”. In reading the article the points that stood out to me are:
- In 2008 65+ households represented only 1 in 5 homes.
- Today (2018) the ratio is 1 in 4 homes are 65+ in age.
Why is this important?
In my mind this demographic age shift is concerning because of how these households will be provided for financially. There is a common misconception that a person’s Social Security benefits are financed from the money he or she paid in Taxes during their time in the workforce, but this isn’t true. Today’s Social Security benefits are financed by the current workforce and the future revenue of the generation still in diapers.
As we move from 1 in 4 to 1 in 3 households in retirement collecting SS benefits this will continue to put a strain on the SS Administration and the current workforce. The reality is that over time changes are going to have to be made. In my mind I see the most likely scenarios being a higher minimum age for retirement and lower payouts from SS benefits.
As of today
According to the Social Security Admin, of those households that currently receive Social Security income, more than 62% rely on SSI as their primary source of income. Furthermore, the average check from SSI in 2016 was just $1360.
These figures indicate that millions of retired Americans are living on fixed incomes of less than $2600 a month. Living on $2600 a month is getting harder and harder. With the increased costs of living, housing and medical expenses how can we expect this to not become a problem.
The company I own, (Heritage Reverse Mortgage) is licensed in Utah, Colorado and soon will be licensed in Nevada. The majority of my business is confined to Southern Utah in the Cities of St George and Cedar City which are considered rural areas. I’ve seen from experience that the numbers above are quite optimistic for rural America. I often have clients in their 80’s living on a fixed monthly Social Security income of less than $900. This situation is a major problem and I find it concerning and tragic that so many are struggling at a point in life when they should be relaxing
Can you see now why I’m so in favor of Reverse Mortgages why I believe they will become a major factor in retirement planning? People want to own a home they can enjoy and be proud of. But at our current projections, home ownership for our senior generation is slipping further and further out of reach. The Reverse Mortgage option brings affordable homeownership back within reach and gives seniors the ability to live comfortably without the burden of heavy mortgage payments.
As time goes on the need for Reverse Mortgages will continue to increase and as I’ve mentioned in other articles there will be a day when having a Reverse Mortgage will be as common as having a pension, annuity or 401k.
If you or someone you know is feeling the pinch of retirement income and would like to see how a Reverse Mortgage could help live with greater freedom give me a call today to go over your options.
President – Reverse Mortgage Specialist
Heritage Reverse Mortgage
Heritage NMLS #1497455 Trevor’s NMLS #: 267962
1060 South Main Street Bldg. A Suite 101B
St George Utah 84770