With our current economic challenges, those of us looking forward to retirement need to be well-informed about our financial needs in coming years. And not only pre-retirees, but individuals already in retirement need to be wise to the changing economic environment. A little planning prior to retirement will allow you to maintain your current lifestyle; whereas, a lack of planning may require you to live on an extremely tight budget. For those already retired, taking time right now to deal with financial problems instead of waiting for a crisis to happen is well advised.
A large number of retired individuals feel that they have planned well for the future only to find that rising medical costs, damage done to investment portfolios and many other factors have caused them to go into debt. Elderly individuals who are in debt live with a constant burden over their heads. Most of these people are on fixed incomes and have no way of paying off credit cards and home equity loans that continue to mount to cover household budget deficits. In order to meet ongoing payments, seniors often forego purchasing medications and skimp on food budgets. They live like hermits -- never going out and pinching every penny -- in order to pay their obligations.
Reverse mortgages - A Home Equity Conversion Mortgages (HECMs), also known as a reverse mortgage, is a risk-free way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person's lifetime. Instead of making payments the cash flow is reversed and the senior receives payments from the bank. Thus the title "reverse mortgage". For those seniors who are less fortunate financially but own a home, a reverse mortgage can allow them to remain in the home by creating extra income.
Life settlements -- A life settlement enables older individuals, businesses and other organizations to sell life insurance policies they currently own – but no longer want or need – for an amount greater than the cash surrender value. In some cases the value can be 2-3 times the cash surrender value. Even some term life insurance policies with a conversion option to permanent coverage can qualify for a life settlement.
Government Programs -- Some government programs such as food stamps provide temporary financial help for food. Other programs provide subsidized housing, help with medical expenses and provide tax credits. For veterans there is free health care, inexpensive prescriptions and disability income. The Idaho Area Agency on Aging offers individual counseling, legal help and advice with Medicare costs.
Medicaid Planning -- A person facing the prospect of long-term care with moderate income and assets may eventually have to rely on Medicaid to pay part or all of the cost of care.
At Idaho Estate Planning, we understand the challenges faced by elder Americans and their families. We have resources throughout the Treasure Valley, experts in the field of Elder Care & Planning. We have the experience and expertise to help you maintain your options and protect yourself as well as your loved ones now and into the future. Remember, good planning is no accident.