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Tag Archives: Senior Finances

How to talk to your aging parents about money

Take care your concern doesn’t come across as if you think your parents’ intelligence is diminished.

Are bills piling up on Mom’s kitchen table?
Are you worried Dad might fall prey to a scam?

Time to discuss if they need help with their finances. Proceed carefully because they may not see things as you do: A 2012 Fidelity study found that while 24% of adult children think their parents will need a hand with money, 97% of the parents do not.

“Conversations about money with your elderly parents are really about control — something they don’t want to lose,” says David Solie, author of How to Say It to Seniors. Try these tips.

THE GROUND RULES

Drop the attitude. An I-know-better air will put their backs up. Take care your concern doesn’t come across as if you think their intelligence is diminished, says Solie.

Avoid saying “you should…” Those two little words are sure to put them on the defensive.

Bring in a third party. To your mom and dad, you will always be a kid — which is why the talk may go better if you deliver it alongside an outside expert, says Paula Span, author of When the Time Comes.

WHEN YOU’RE FACE TO FACE...

1. Opening gambit. “Mom, I just read an article with great tips about how to simplify managing your money as you get older. Can I share a few of them?”

The strategy: “Bring yourself into the equation as a helper, not an overseer,” Span says. Framing the advice as someone else’s ideas may make your parents more open to accepting them.

2. Dangle a carrot. “I think we can save you some money on your cable bill, Dad. How about we take a look?”

The strategy: Suggest a small, concrete action with a clear payoff to start. An Allianz survey reveals that 61% of older Americans worry about outliving their money, so helping your parents cut costs is a good first move.

Seeing how beneficial your suggestions can be is likely to make them more receptive to other, more serious forms of help.

3. Keep your warnings indirect. “I know you’re too smart for this, but I want to tell you about this scam I heard about so you can warn your friends.”

The strategy: Being straightforward — “Mom, Dad, you need to watch out for people who ask for your bank account online” — may feel patronizing to your parents. Instead, plant a seed that doesn’t reflect on their competence to manage their affairs, says Colorado elder-law attorney Catherine Seal.

4. Ask if you can tag along. “My friend’s dad keeps getting invited to free-lunch retirement seminars. Do you? I’d love to go if you go.”

The strategy: Instead of trying to put the kibosh on a move you know is not smart, stand beside them during the sales pitch, suggests Kim Linder, a caregiver consultant. Then ask tough questions that will push your parents to think before they leap.

5. Use metaphors. “You wouldn’t buy a used car without a mechanic checking under the hood. Same goes for your investments. Let’s have a financial adviser look into this.”

The strategy: “In the second half of life, the right brain becomes the gatekeeper for information,” says Solie. “We respond better to stories and metaphors — the stuff that gives meaning to facts and linear data.” To top of page

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Posted by on April 1, 2013 in Seniors

 

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Lower Cost HECM Means Better Suited For Short Term Goals

Cash at Home: Two recent government moves could make reverse mortgages cheaper and easier for older homeowners to understand. The loans, which generally let people 62 or older convert their home equity into cash, traditionally have had high closing costs and have been most useful for people planning to stay in their homes for the long haul. But a new federally backed product, the HECM (Home Equity Conversion Mortgage) Saver, has cut the upfront mortgage-insurance premium to 0.1% from 2% of the property’s value. The change makes the product better for people with short-term needs, says Barbara Stucki, vice president of home-equity initiatives for the National Council on Aging, a Washington, D.C., advocacy group.

Also last month, the Department of Housing and Urban Development began requiring all HUD-approved reverse-mortgage counselors to give their clients the aging council’s 28-page consumer booklet on reverse mortgages, walk them through a new “Financial Interview Tool,” and offer to see what other assistance might be available using the council’s BenefitsCheckUp program ( benefitscheckup.org ).

To learn more, see the aging council’s booklet “Use Your Home to Stay at Home,” at ncoa.org/reversemortgagecounseling.

 
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Posted by on October 26, 2010 in Uncategorized

 

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Need Home Modifications To Age In Place? A Reverse Mortgage May Help

Most seniors want to stay in their homes and remain independent yet often believe they can’t for a number of reasons.  Making some home modifications could make their wish of remaining in their home a reality by providing a safer more comfortable environment.

More than one third of those age 65 and older suffer injuries from a fall each year according to research from the National Center for Injury Control and Prevention.  AARP research suggests the leading cause of injury and deaths among seniors is falls.  Modifying one’s home can help to eliminate common hazards and help to improve the quality of living in one’s home.  Improving the safety of one’s home can help one have more comfort, convenience, and  remain independent and active in their community.  Some people have mobility limitations from causes other than falls and still want to stay in their home.  This too can be accomplished with some home modifications.Home modifications can help seniors remain in home

Bathing, toileting, cooking, and climbing stairs can be made easier to perform by adapting one’s home.  Modifying one’s home can be as simple as installing grab bars in the bathrooms, removing throw rugs, moving electrical cords from hazardous locations, touch buttons for turning lights on and off to installing entrances to accommodate wheel chairs and lifts to access another level.

By assessing and modifying one’s home, one can live more safely, comfortably and remain independent.  But how can one afford this?  A reverse mortgage may be the solution beyond what Medicare or insurance will pay for.

A reverse mortgage is a special loan to allow seniors to remain in their home with security, independence, dignity, and control by converting the equity into cash.  Similar to a conventional loan where a lien is placed on the home yet the borrower retains ownership.  The reverse mortgage is different from a conventional loan with no income or credit scores required and no monthly mortgage payment requirements.

The reverse mortgage loan amount is based on the age of the borrower, their home value and an Expected Interest Rate.  Due and payable when the home is no longer the primary residence, usually when they move, die or sell, a reverse mortgage can allow one to remain in their home and use the equity now.  As a non-recourse loan there is no personal liability to the borrower or their estate as long as they are not retaining ownership.  If the home is sold for more than the loan balance then the borrower(s) or their heirs keep the difference.Reverse Mortgage Helped Bob Modify His Home

Bob, a Minnesota senior who had lost his wife wanted to stay in his home.  He did the reverse mortgage and with a portion of his proceeds he modified his home to be prepared for the future such as having the doorways wider to accommodate a wheel chair and grab bars installed.  He’s thrilled that he was able to have his home modified and will be able to remain there for years to come.

 
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Posted by on September 14, 2010 in Uncategorized

 

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