Sound Financial Strategies for the Boomer Market

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By haroldllus12907327, Jun 29 2015 07:45PM

This blog is made up of three parts. The first part will discuss what a reverse mortgage is, the second part will discuss how to use it to pay for long term care and the third part will discuss when a Reverse Mortgage is a bad idea.In the series we also discuss how it works in unison with Medicaid/Medi-Cal in California.

A reverse mortgage is a loan for homeowners 62 and older. It uses a portion of your home’s equity as collateral. The loan generally doesn’t have to be repaid until the last surviving homeowner moves out permanently or passes away. At that time, the estate has approximately six months to pay the balance of the mortgage or sell the home to pay off the balance. All remaining equity is generally inherited by the estate or children. These loans are also called Home Equity Conversion Mortgages.

If your property is worth less than the balance of the reverse mortgage when you permanently move out, the estate or your heirs are not liable if the home sells for less than the balance.

Almost all homes are eligible as long as the Borrower lives there as their primary residence. Mobile homes, however, have special requirements. Condos and townhouses may be eligible as well. There are minimal income and credit worthiness requirements. The government wants to make sure you can afford to live in your community, in your home, keep it up and pay your real estate taxes and insurance.

There are several ways to receive the proceeds from a reverse mortgage including income:

 Lump sum of cash at closing

 Equal monthly payments as long as the homeowner lives in the home

 Equal monthly payments for a fixed number of years

 Line of credit

 Any combination of the above

And best of all, you can’t outlive a reverse mortgage and its all tax free!

There is, however, one big negative when it comes to reverse Mortgages. You cannot obtain an annuity in California and a number of other states if you have a reverse Mortgage. So, if you want the benefits of an annuity in your retirement plan or as a safe investment, you will have to purchase the annuity first. A comprehensive financial plan can help you resolve the best way to go.

By haroldllus12907327, Jun 29 2015 07:25PM

Hi, my name is Harold Lustig, and I am very concerned about the emotional and economic impact of longevity. Through this blog I plan to share my ideas on how you can protect yourself and your family from the financial crises associated with long term care. I've been a financial planner for over 30 years and love sharing the things I've learned. I also have a book on how to pay for long term care without going broke coming out soon, Naked in the Nursing Home.

You may thing long term care is something you'll never need, but here's my theory:

Only two things can happen, we can die or grow old. The chances of our needing care are either 0% or 100%. If you die first then obviously your need for long-term care will be 0%. Otherwise, you need to make sure your assets are in order and structured so that you don't outlive them, as my father did. If you grow old, you will eventually lose your physical or mental capabilities and the need for care becomes 100%. In Dr. Whitehead's book, The Myth of Alzheimer's, he says that Alzheimer's disease is really the brain aging.

In this blog we're going to talk about issues around aging. We'll put some of them in the context of our 90 year old "Aunt Thelma", and her running battle with old age. We'll see how we, as a nation, can solve this problem. I'll provide you resources that will help you cope when a loved one needs help and how you can pre-plan to protect yourself and your family. Until Congress wakes up to the magnitude of this issue I will be your source for how how to financially cover the cost of care.

We'll also have some fun conversations along the way.

Talk to you soon.

By haroldllus12907327, Jun 3 2015 04:10AM

Today we are going to examine money matters from a different perspective. We will examine ways to prevent cognitive impairment. Now, one must remember, this technique is not scientific or even proven but it has positive emotional, health, social and financial benefits.

Here it is, ready? Get a kitten or a puppy. The kitten or puppy must be well documented, preferably from a rescue group and healthy.

When our 22-year old Himalayan cat died we got a kitten. His name is Oscar, sometimes it’s “Oscar, Get-Off the Table” other times, it’s “Oscar, Stop Picking on Jewel”. Jewel is our other kitten; two to keep each other company. He does respond to Oscar. If that doesn’t work, food always works. The one word that doesn’t seem to be in his range of understanding is the word “NO”.

How does having a kitten or a puppy prevent cognitive impairment, you ask? Caring for your four-legged child requires feeding, nurturing, exercise- all great activities for an aging brain.

With a puppy, you have no choice; you have to walk him or her. Get a pedometer, it makes a difference. Would you rather exercise or enhance your social life, have a talking companion who does not talk back, and explore new walking areas. How do I know it is possible? Ask Rosco, our dog, he will tell you we walk 30 to 45 minutes every day. Total strangers tell me how cute he is.

There are other benefits of walking, here are a few:

o 45 minutes of walking/day halves the odds of catching a cold

o Seniors who walk 6-9 miles per week are less likely to suffer from mental decline as they age,

including dementia

o Walking 30 minutes a day, 5 days a week, can halve the risk of heart disease and reduce

stress, cholesterol and blood pressure.

So where is the money part? Rodale Press says studies show you may get off your meds and save on Health Club costs. All cash outflow. Don’t believe me? Just Google “benefits of walking.” And, you will never have to pay for a Bar Mitzvah, college or a wedding. You will have veterinary bills but you can ask for a senior discount or get pet insurance.

By guest, May 13 2015 12:46PM

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