In the year 1910, life expectancy in the U.S. was only 50 years. By the year 2000, life expectancy had increased to 73 years. The overall effect of this longevity on the population of the United States is significant. Between 1995 and 2025, the number of people who are elderly is projected to double in 21 states. The total U.S. population of those over 65 years of age is projected to grow from 12.8% to 18.5%, according to the census bureau.
While this growth is happening, the economics of America will change. Most Americans do not have significant retirement plans outside of social security. While social security income stagnates, expenses continue to rise…
The Senior Citizens League said older Americans have lost 32% of their buying power since 2000. This is because the Social Security Cost of Living Adjustment has gone up just 31% since that year, while typical expenses have jumped 73%.
The good news is that many seniors have equity in their homes which can help with retirement. According to the National Council on Aging, more than 13 million older adults have equity in their homes that they could use to help them stay independent.
Putting these numbers in perspective, it is no wonder that reverse mortgages have become more popular. What is a reverse mortgage? It is a loan that provides a homeowner over 62 years of age with cash and/or a monthly payment over time, with no repayment required until the ownership of the home is transferred either through sale or death.
Basically, the owner of the home can receive a monthly income from their home to help with living expenses without having to pay a mortgage payment. It is obvious why such a loan would be popular for those with limited/fixed incomes and have substantial equity in their homes.
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