A new study from Medical Alert Buyer’s Guide – and covered recently by Forbes and Reverse Mortgage Daily – found that many seniors may be routinely under-preparing for their healthcare costs as they move further into retirement. The study surveyed 1,006 people who had yet to retire aiming to gauge their expectations of retired life as well as the specific steps they had taken to prepare for retirement.
Among the most telling (and perhaps alarming) stats:
- 71% of the people surveyed were contributing to their retirement savings. But only 38.1% were specifically saving for their cost of future healthcare.
- More than half of respondents in their 20s and 30s said they would rely on their personal savings to cover healthcare costs in their golden years instead of using a tax-advantaged health savings account or long-term healthcare coverage.
- More than half of respondents in their 40s said they would rely on Medicare for healthcare in retirement, though Medicare does not cover all of the preventive care a person may need to stay healthy in retirement.
- 1 in 5 people surveyed were unsure what they would do to cover healthcare costs in retirement and 47% said they weren’t saving anything at all for retired health.
Given that the average retiree spends about $4,300 per year on healthcare costs currently (a number that stands to increase), future retirees may be left looking to fill a gap in income specifically for healthcare when the time comes
Reverse Mortgages Can Free Up Secondary Cash for Healthcare in Retirement
Reverse mortgages are a useful option for incoming planning in retirement and a valid way to free up secondary cash for expected (and unexpected) healthcare costs as you grow older. These mortgages allow you to access the equity while still maintaining ownership, remaining on the property title, and living in the comfort of your own home.
Using a reverse mortgage as an alternative source of income can also help protect your investment portfolio from early depletion due to skyrocketing healthcare costs in the future. Put simply, in the right situation, a reverse mortgage may be a lifeline for that 47% of people who said they aren’t saving anything for healthcare costs in the future.
Could A Reverse Mortgage Be Right For You?
Future predictions aside, a reverse mortgage might be right for you right now. As you consider your needs, here are a few quick introductory guidelines to help you assess your eligibility for a reverse mortgage.
- To be eligible for a reverse mortgage, the youngest homeowner on the title must be at least 62 years old.
- The home must be the borrower’s primary residence.
- The borrower must pass a financial assessment to ensure their ability to pay for property taxes, homeowner’s insurance, and home maintenance.
You might also review our blog on the common myths of reverse mortgages and other scenarios that make sense for reverse mortgages.
Reach Out To Us Anytime With Your Questions!
If you’ve been curious about the pros and cons of a reverse mortgage and how one might fit into the puzzle of your retirement finances, please reach out to one of our Certified Reverse Mortgage Specialists anytime!
We’d love to discuss how this unique equity-building option can ease your financial stability and give you peace of mind as you move further into your retirement.