The Older We Get, The Happier We Are…

I don’t know if I realized this about myself before reading some research by psychologists on what they now call the Paradox of Aging, but apparently I’m getting happier by the day!  Of course, all this happiness is accompanied by some aches and pains, some forgetfulness, and general diminished cognitive abilities; all of which had me thinking previously that getting old was a downer – that I was just trudging toward the inevitable end.

So why are we happier?  As we begin to face our mortality we are more apt to appreciate relationships and direct ourselves toward more meaningful goals.  The wisdom we acquire as we accumulate birthdays plays a large part in becoming more empathetic, compassionate, decisive and better able to regulate our emotions…thus happier.

There are also physiological changes to our brains as we age.  We are less responsive to stressful imagery and respond positively to images which should give us a happy feeling.  Additionally, we no longer experience many of the stresses that those young whippersnappers in their 20’s and 30’s go through as they work at establishing themselves, and raising children.  In fact, we get to have fun with their kids and then give them back when we get tired.  Happiness.

I sure hope they are correct, with 10,000 people per day turning 65, it would be a rather sour world in a few years it they’re not.

Not all the shrinks believe it’s as simple as all this, but I’m not going to allow them to drag me down now that I’m feeling happier – in fact it just enhances my sign off line:  It pays to get old.

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Your Future is Now

      The farmer knows he must become adept at one of two things:  Planting in the spring or begging in the fall.  It’s time for planting….

 

Oftentimes when I meet with clients, I hear statements like: “I don’t need the money right now; but when I do need it, I’ll get in touch with you.”   Today, I’ll attempt to show you how faulty this line of reasoning is, and how to make your home’s equity work for you now to take care of your future.      As you are hopefully aware, the HECM Adjustable Rate Mortgage (ARM) allows the borrower to elect to place their funds in a Credit Line or Line of Credit, from which the borrower can withdraw funds as needed.   Interest only accrues on the balance of funds that have been withdrawn, and it thus operates much like a Home Equity Line of Credit. Of course, with the Reverse Mortgage Credit Line, you are not obligated to make monthly payments.      Now for the huge difference: the Reverse Mortgage Credit Line grows in size as time goes by.   That’s right, I said it: the unused balance of your Credit Line becomes larger each month.  Your unused balance is not gaining interest, so you’re not going to be taxed, but it will grow just as if the bank was paying you interest.      If you look at a typical Reverse Mortgage Loan Comparison (which any lender will show you), you’ll see a figure called the Credit Line Growth Rate.   At this moment in time, the Growth Rate will be your Interest Rate plus 1.25%.  On the Reverse Mortgage Loan Comparison I created today, the Interest Rate is 4.475% and the Credit Line Growth Rate is 5.725%.   I know I’m putting some of you to sleep with these numbers, but stay with me now; this is where it gets interesting.      Our borrower, Mr. Sample, closes his Reverse Mortgage Loan at the age of 64.  He told me he is not retiring for another ten years so he doesn’t need the funds right now.  He places his funds ($230,000) in the Credit Line Account which has a Growth Rate of 5.725%.  At the end of the first year, his available Credit Line balance has grown to $243,167.50.  Not too shabby, but since the Growth Rate compounds, it grows faster and faster each month.  At the end of 10 years, the available balance has grown to a whopping $401,332.84, and all Mr. Sample had to do was make a decision for his future without waiting until he was up against the wall.

Good decisions are generally made when we’re not under pressure.  Do yourself and your family a favor and think about improving your future today.

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Home Values Rising

All right Baby Boomers, buckle up your seat belts, the home equity roller coaster is about to roll. After some years of static or even declining home values in some areas, the trend is definitely headed upward.  In the metropolitan area which includes northern New Jersey, New York City, Westchester, Long Island and southern Connecticut, it’s been reported that home prices have appreciated as high as 12% in some locales.  In addition, predictions are for increases in the 5-6% range for the coming twelve months.  Most of these increases are fueled by continued low interest rates, a shortage of housing merchandise, and even some stability in the job market.

Nationwide, Senior’s home equity has soared to over $6 trillion dollars with an increase of $164.9 billion dollars in the last quarter of 2015. I don’t know about you, but I still can’t wrap my brain around those numbers – but they do show home values rising…and that can only be good.

So, what does this mean for you and me? Too many Boomers got caught up in the refinance craze in the early 2000’s and galloped toward retirement with a fat mortgage payment to handle.  Perfect clients to consider a Reverse Mortgage;  however, over the past few years, we estimate one in five people who contacted us to research a Reverse Mortgage, didn’t qualify due to a shortage of equity in the their home.  Therein is the good news of this essay:  if you were told that a Reverse Mortgage wouldn’t work for you before; the time may now be right to hit the restart button and find the smooth path to enjoyable retirement years.  Give us a call and discover The. Golden. Years.

It pays to get old….

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Who Are You Calling Old?

You can call me a baby boomer; you can call me a retiree; you can even call me late for dinner, but don’t call me old.  That’s the word from a poll commissioned by the Associated Press-LifeGoesStrong.com conducted in June of this year.

 The generation of baby boomers who once proclaimed that: “we’re never going to get old,” are holding fast to that way of thinking.  While younger adults call 60 the beginning of old age, about half of boomers are pushing the number back to 70, and almost a quarter of them don’t think you’re old until you’ve reached 80.  As they march into their early sixties, many are finding out it’s not so bad, and they feel upbeat about their futures.

 A decided majority of baby boomers are actually enthusiastic about aging and all its fringe benefits like watching children and grandchildren grow up, spending more time with family and friends, and having time for favorite activities.  “I still think I’ve got years to go to do things,” says Robert Bechtel, 64, of Virginia Beach, VA.  He retired last year and now has less stress and more time to do as he pleases.

 About half of the baby boomers predict a better quality of life for themselves than their parents experienced as they aged.  “I have no intentions of sitting around the house,” said Lynn Brown, 64, of Apache Junction, AZ.  “I’m enjoying being a senior citizen more than my parents did.”

 Almost all of the boomers – 90 percent – are making a conscious effort to eat better to improve their health, and more than half have taken up a regular program of physical exercises as well as mental exercises to stay sharp.  Loretta Davis, 64, of Salem, W.VA, reads, plays games on her computer and takes walks.  “I wish I had been more conscious of what I was eating earlier in life,” said Davis.  But she said getting older doesn’t bother her: “I’m just glad to be here.”

 Oops, gotta go know, I’m late for the gym….

(Cross-posted at Senior Security)

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Inspiration from Late Bloomers

If you are a Senior Citizen like I am, then you have probably come to the realization that we are in for a few more aches and pains, we might forget a few things from time to time, and our eyes don’t see as well as they once did.  So this body that carries us around is getting older, even though our mind still feels vibrant much as it did when we were in our thirties or forties.  We still have a lot of living to do, and it might surprise you to hear some stories of famous people that were late-bloomers – that is, they made a name for themselves in their sixties or later.  I’m not suggesting that you need to go out and do what they did, but I do want to inspire you to live your life rather than letting the aches and pains get the better of you.

Let’s look at a couple of people who did big things late in life: 

Grandma Moses…started oil painting at the age of 75, after having to give up her hobby of embroidery because of arthritis in her hands.  Quite a prolific painter, during the next three decades, she completed over three thousand paintings, one of which hangs in the White House to this day.

Colonel Sanders…his working years included stints as a steamboat pilot, an insurance salesman, a railroad fireman, and a farmer.  Finally forced to retire at the age of 65, he used the $105 from his first Social Security check to visit over 1,000 restaurants trying to sell his idea of a Kentucky Fried Chicken franchise before someone agreed to sign on.  As they say, the rest is history.

Peter Mark Roget…after retiring from the Royal Society of Medicine at the age of 70 he began writing the world’s first Thesaurus, or book of synonyms.  Roget’s Thesaurus was first published when Roget was 73, and while alive, he presided over 28 additional printings.

Ray Kroc…Ray worked for 17 years as a paper cup salesman, then another 17 years peddling a milk shake machine known as the Multi-Mixer.  While suffering from diabetes and arthritis, Kroc bought the McDonald’s brothers fledgling hamburger fast food restaurant at the age of 59 and went on to franchise McDonald’s Hamburgers and sell over a billion hamburgers.

Winston Churchill…He lost every election he ever entered as a candidate until finally – at the age of 62 – winning the election for Prime Minister of Great Britain just prior to World War II.  His leadership along with President Roosevelt was instrumental in winning the war forGreat Britain and theUnited States.

Oscar Swahn…not as well known as the others, he won two gold medals in shooting events in the 1908 Olympics at the age of 60.  In the 1912 Olympics, he won another gold to become the oldest gold medal winner even till today.  He finally slowed down in 1920, and at the age of 72 only won a silver medal.

So, what is old?  Do you feel like giving in to age, or would you rather live life to its fullest?  I know what I’m going to do….

(Cross-posted at Senior Security)

 

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Another Survey – Retirement Problems

As is often the case, the survey tells us what we already know – many people around the country have little or no retirement savings.  It’s even worse among Baby Boomers who are at or near retirement age; fully 25% of those surveyed indicate they have nothing saved for retirement, according to a survey recently conducted by The Harris Poll.  In many cases, they had to liquidate savings to pay expenses during this recession, or to survive months of  unemployment. 

Younger adults, of course, have time to try to reconstitute their 401k’s and their IRA accounts; but the Boomers face fewer choices.  One option which many have resigned themselves to pursue is simply to continue working.  Unlike the Federal government, when we run out of money, we can’t just print more of it and keep spending.  No, we must keep working, and cut our spending as much as possible…or find other sources of income – legal sources, of course. 

As you may have guessed, one of the solutions of which I am a proponent is the HECM Reverse Mortgage.  If you own your home and are still buried under heavy mortgage payments, a Reverse Mortgage can provide relief by paying off the existing mortgage freeing up money for food, clothing, heating bills, etc.  If you own your home and have no mortgage, you might consider a Reverse Mortgage set up to pay you a fixed amount of money each month for as long as you continue to live in the home.  Hopefully, along with your Social Security, this will provide the comfortable lifestyle you have earned.  As always, feel free to ask questions in the comment section….

(Hat tip: Pat Whitlock)

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Monday Morning Tidbits

Somebody at Bank of America must be practicing to run for political office.  A few months ago the word from BofA was: “We’re committed to our Reverse Mortgage business.”  This past Friday, BofA announced: “We’re closing our Reverse Mortgage division to concentrate on our forward mortgages.”  Sounds like a future Senator to me….just saying.

According to the Congressional Budget Office, Social Security will begin to run deficits this year – five years sooner than expected; and will continue to run in the red until something is done to fix it.  When Social Security was running a surplus, those in power found it easy to put off the tough choices that needed to be made, and continued to borrow from Social Security funds to pay for bridges to no-where.  Now, the policymakers have painted themselves into a corner.  Let’s see what they do now….just saying.

Reviewing the latest analysis of the Case-Shiller index, it appears that home prices may be stabilizing.  By the end of this year, it’s expected that prices will stabilize in 75% of the market, and in 100% of the market by the end of 2012  .  Let us hope….just saying.

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Where’s My Nest Egg?

     A recent Retirement Fitness Survey has revealed that 72 percent of adult, working, middle class Americans are now planning to work through their retirement years.  The primary reason is a dramatic deficiency in their retirement savings – the proverbial nest egg is nowhere near where it needs to be. 

     The choice for many will fall between severe cutbacks in lifestyle and amenities, or continuing to work to fund the semi-retirement years in some degree of comfort.  Social Security will not provide enough income to survive; and with the shrinkage in 401k’s, and low interest rates on savings and IRA’s, finding the right formula for a comfortable retirement will take some effort.

     Don’t stick your head in the sand and hope things will fall into place for you….it’s never too late to sit down with an expert and learn about all your options.

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Outlook for the Future

     Happy New Year!  It’s just after 8:00 am on January 1st, and I have already heard – three times – the statistic that approximately 7,000 Baby Boomers will turn 65 each day over the next 20 odd years.  After surviving a brutal economic recession, many of the Boomers remain optimistic according to a survey conducted by AARP.

     So, Happy Birthday to the first 7,000!  But what does this mean for the rest of us Seniors?  On the plus side of the ledger, since many plan to continue working, we can expect that a high degree of experience will remain in the nation’s workplace.  Perhaps their extended years on the job will help pass their knowledge to the younger workers and benefit us all.

     On the down side, most services aimed at Seniors will be under pressure to survive and thrive under the tidal wave of new participants.   Medicare and Social Security, which are already in financial difficulty, will be severely strained and likely will need to undergo changes.  This will probably mean that we will each be more responsible for our Golden Years than we may have planned to be and that government programs will be cut back, or unavailable to us until we attain a higher age than previous Seniors.

      Certainly, it is time for each of us to honestly assess where we are financially today and where we need to be in order to live the lifestyle we want and deserve.

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Merry Christmas

My wish for a happy, safe, blessed Christmas for everyone!  I’ll be back on Monday.

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