Harvard University: Reverse Mortgages Can Help Seniors Comfortably Age in Place
Harvard University, America’s oldest university and one of the world’s best, says reverse mortgages can be an option to help senior homeowners reduce cost burdens and comfortably age in place in a new report.
The report, titled “Projections and Implications for Housing a Growing Population: Older Adults 2015-2035,” addresses housing demands for America’s rapidly growing senior population.
According to the study, by the year 2035:
- The US population aged 65-and-older is expected to grow from 48 million to 79 million
- Households headed by someone over 65 will increase by 66%, to nearly 50 million
- More than one in five people in the US will be aged 65-and-older
- The 80-and-over population is expected to double to 24 million
This rapidly expanding population of Americans 65-and-older will increase demand for affordable and accessible housing in decades ahead.
Used strategically, reverse mortgages can provide seniors with more options
A key issue facing America’s growing senior population is the majority will be retired and no longer working full-time.
This means that instead of receiving salaries and wages from employment, most seniors will be living off of Social Security payments, retirement savings, pensions, and investments. When combined with life expectancy increases from medical advances, senior finances are becoming increasingly strained, and ⅓ of older Americans believe they will outlive their savings. This is where reverse mortgages can provide opportunities.
Reverse mortgages let Americans 62-and-older convert part of their home equity (wealth) into cash, a monthly check, or a line of credit. Reverse mortgages aren’t required to be paid back while the recipient lives in the home, and the recipient gets to keep the title to the home. This means they’re still responsible for paying property taxes, homeowner’s insurance, HOA fees, and maintaining the home.
With American homeowners aged 62-and-older having an estimated $6 trillion worth of equity in their homes, growing numbers of financial advisors are recommending reverse mortgages as part of a retirement financial planning strategy.
The Harvard report provides similar information, stating “housing wealth can provide a valuable safety net for older households.”
Contact Open Mortgage to learn more about reverse mortgages
While reverse mortgages aren’t for everyone, they can provide benefits to retirees in certain situations, such as wanting to stay in a current home throughout retirement or supplementing finances. If you’re interested learning more about reverse mortgages, please contact me today!