Comparing Home Equity Loans to Reverse Mortgages

Home equity loans all but disappeared a few years ago after the financial crisis. However, it appears that home equity lending may be on the rise – with banks approving more of these types of loans.

If you are considering tapping your home equity to fund retirement expenses, then comparing a home equity loan to a Reverse Mortgage may be a good exercise for you.

  • Home Equity Loans: A home equity loan is a loan against the equity you have built into your home and you must pay it back overtime, starting immediately. As such, to qualify you must be able to prove that you are able to make the loan payments.
  • Reverse Mortgages: A Reverse Mortgage is a kind of loan that is not repaid until you leave your home and is often repaid with the sale of the home.

Both loans are great ways for seniors to gain access to their home equity. The costs and interest may be lower for home equity loans, but the available money is often higher and eligibility is easier for Reverse Mortgages.

Estimate Your Reverse Mortgage Loan Amount Now.

Compare Costs of Reverse Mortgages to Home Equity Loans by Talking with a Lender Now.

Learn More About Using a Home Equity Loan.

NewRetirement & Texas Tech Provide No Cost Access to Financial Planning

“Consumers can ask any question they wish of highly skilled financial experts. They post their questions anonymously and receive their answers free of charge.”

NewRetirement & Texas Tech Provide No Cost Access to Financial Planning

San Francisco, CA (PRWEB) May 14, 2013

Financial Planning Question and Answer

NewRetirement today announced that Texas Tech University’s Personal Financial Planning Department (TTU’s PFP) is among the high quality providers of retirement planning knowledge made freely available to consumers at NewRetirement.com. NewRetirement.com and TTU’s PFP share a vision of providing unbiased financial planning and knowledge to all Americans, regardless of their income, the amount of their investable assets or their level of financial sophistication.

Over the past decade, millions of individual consumers and family members concerned about their financial future have visited NewRetirement.com seeking to improve their retirement finances. Many of these visitors also have used NewRetirement’sretirement calculator. Now, in addition to using the retirement calculator to assess and identify ways to improve their financial plan, consumers can leverage NewRetirement’s social media platform to ask any question they wish of highly skilled financial experts. Consumers post their questions anonymously and receive their answers free of charge. Their questions can be posted either from within the retirement calculator or by participating in the open Question & Answer forum. If a visitor first receives a personalized analysis from the retirement calculator and then posts a question, a financial expert answering the question has the advantage of providing an answer that takes into account their unique financial situation. The financial experts can use this anonymous financial background information to provide a more detailed, accurate and customized response. An answer that takes into account each consumer’s unique circumstances provides them with an immediate benefit.

NewRetirement’s website visitors have asked questions and received answers that range from the broad & simple to the narrow & complex. Among the most commonly asked questions is, “How can I maximize the income I will have when I retire?” An example of a more complex question is, “Universal life insurance policy versus a Roth IRA? What are the advantages and disadvantages of both? What are the risks? Which offers more flexibility and control over your money?” Click on the questions to view the answers offered by master’s degree candidates at TTU’s PFP.

Steve Chen, NewRetirement’s CEO, remarks, “We are extremely pleased to be associated with Texas Tech’s PFP program. We have no question that the visitors to our website will benefit greatly from their contributions. They are an excellent complement to the other financial experts and consumers that pitch in to answer questions and help improve our website visitors’ retirement finances.” Dr. John Salter handles the relationship with NewRetirement for TTU’s PFP. He is currently researching the role of reverse mortgages in retirement distribution management and cash management and is an active CFP® certificant and wealth manager. He notes, “We were very pleased to learn that NewRetirement has built a social media and technology platform capable of delivering financial planning knowledge to millions of Americans. They have done so in a manner that aligns well with PFP’s vision of bringing sophisticated financial planning to everyone, particularly to those that often have the least access and greatest need for it, American families on Main Street. Combining our strengths magnifies the total benefit for all of these consumers.”

About Texas Tech University’s Personal Financial Planning Department. For the last two decades, TTU’s PFP has been a leader in producing research, scholars and professionals focused on providing financial knowledge to families and helping them achieve their financial goals. The answers from TTU’s PFP master’s degree candidates on NewRetirement.com are provided as general information only. Although TTU PFP graduates are eligible to sit for the CFP® certification exams (one of four requirements to become a full-fledged CFP® professional), no warranty is made regarding the fitness or accuracy of the information provided in their answers. Consumers should always seek advice from a licensed CPA, attorney or Certified Financial Planner™ as to their unique financial situation.

About NewRetirement Founded in 2004, NewRetirement’s mission is to make quality retirement planning available to everyone – online in an easy to use and understand format. Each month, the NewRetirement website serves hundreds of thousands of consumers seeking to improve their retirement financial situation. Annually, NewRetirement connects tens of thousands of these visitors with the products and services that best suit their needs. NewRetirement.com’s corporate headquarters is located at 100 Pine St, Suite 590, San Francisco, California 94111. Please reach Paul Lowrey, Director of Marketing, at 888-411-RETIRE (888-411-7384). Please send email inquiries via the site’s Contact Us page. The website URL is http://www.newretirement.com.

 

What to Do When Your Siblings Are Taking Advantage

“When it comes to caring for your aging parents, do you ever feel like your siblings are putting too much of the responsibility on your shoulders? Whether it’s day-to-day care tasks or paying the bills, if the division of labor is making you angry, it’s time to take action. Find out what the experts advise.”

What to Do When Your Siblings Are Taking Advantage
By Carol O’Dell, Caring.com contributing editor

Nothing brings siblings together — or tears them apart — like caregiving. It tends flush out whatever family issues you’ve all accumulated over the years. Care for an aging parent typically falls on the shoulders of one adult child: maybe the one who lives closest, is the oldest, or is single; perhaps the one who has some type of medical experience or is considered “the nurturer.” While having a primary caregiver is a good idea — that means there’s a central coordinator — there are more than enough care needs to go around (bathing and personal care, errands, doctor visits, multiple runs to the pharmacy, cooking, home maintenance, finances, and on and on).

Is there anything you can do to enlist your less-than-enthusiastic siblings to participate in your parent’s care?

Five Tips to Involve Your Siblings in Parent Care

1. Ask for something specific — and expect it to get done. Caregiving doesn’t come naturally for everybody. Some folks just don’t see what needs to be done. Teach them how to care by assigning them a task. Start with just one, like taking your mother to her physical therapy appointment every other Thursday. Approach your siblings as if their assent is a given: Of course they’ll help. Give the dates, times, and address. That might seem like more trouble than it’s worth, but get them started by doing all you can to make caregiving a can’t-say-no, not-so-tough thing to do.

2. Don’t micromanage or judge. Caregivers don’t want to admit it, but we’re a bossy bunch. We know how things should be done, and it’s easier to do it ourselves than to have it fail to meet our expectations. But that’s not fair. Your parents need all of their children. Let them have their own relationships, and even expect that some things will be done less than perfectly, or barely done at all. Resist the urge to interfere. No one will ever want to participate if they’re worried about being criticized.

3. Give your siblings tasks they’re good at — and let them shine. Let your brother order Chinese and rent a movie on Sundays, even though that makes him look like the “fun one.” Then ask him, while he’s in front of your parents, if he’ll also look at that drippy faucet in the kitchen. If he’s a fix-it kind of guy, he just might roll up his sleeves. Even if he’s not, it’ll be harder for him to say no if you ask in a nice voice and your parents or other family members are right there listening.

4. Adopt a team mentality. No matter how small a contribution the others make, even if it’s occasional or “just” financial, consider everyone part of the team. Thank them for pitching in. Include them on those day-to-day hilarious or pull-your-hair-out moments. Make getting together less of a chore. For example, have a spring clean-up day and get the whole family involved (grandkids, nieces, nephews). People need to be needed, so tap into that basic desire to make a difference. Take pictures and post them on a family blog. Wear tie-dyed t-shirts, put on music, and rake the lawn or accomplish home repairs together. Make it sound like so much fun that no one would want to miss out.

5. Learn to let go and find others who want to help. You can’t make someone want to care, and while that places more on your already exhausted shoulders, adding a grudge will only weigh you down further. Try to see just how scared and shut off your siblings really are. By not participating, they’re also not reaping the benefits: new memories, laughter and tears, valuable insights, and the deep sense of purpose you gain by giving. Take the focus off of them by finding resources in your community or at a local house of worship. Choose to let go of resentments and frustrations that will only sap your energy and rob you of a meaningful caregiving experience. As the old adage goes, “The best revenge (here let’s change that to ‘recourse’) is a happy life.”

Carol O’Dell is a contributing editor for Caring.com, the leading online destination for caregivers seeking information and support as they care for aging parents, spouses, and other loved ones. For more ideas about positive family communications, see 5 Surprising Ways to Show Your Love

The Price is Right! Top Couponing Strategies and Web Sites

AARP senior discounts used to be one of the only ways to save money. Now online coupons and discounts can be found on anything and everything and are a great way to save money on retirement expenses. Here are a few of the strategies and sites we think are best.

• Search for Specific Discounts: If you are planning on buying something at a specific retailer, do a quick internet search for coupon or discount codes for that store. For example, if you are going to buy something at Kmart, search for “Discount codes for Kmart” or “coupons for Kmart.” You will likely find an array of offers that will immediately save you money!

• The Grocery Game: Thegrocerygame.com bills itself as the ultimate grocery savings web site with instant price comparisons, unadvertised sales and the fastest and biggest savings on groceries.

• Shop Specific Coupon Sites: You can browse or search for discounts on popular couponing sites like: coupons.com, couponcabin.com and retailmeknot.com.

• Comparison Shop: Pricegrabber.com is a site that enables you to compare prices for specific items across a variety of retailers.

Do You Have a Favorite Discount or Couponing Web Site? Share it Here.

Reverse Mortgages and Long Term Care

Your decision to get a Reverse Mortgage should probably involve an analysis of your long term care plans. Research indicates that at least 70 percent of people over 65 will need long term care services at some point in their lives. 

Many people secure a Reverse Mortgage in order to fund long term care services in their own home.

And the good news is that the recently published “GenWorth 2013 Cost of Care Survey,” found that the costs of in home health care has been relatively flat over the last five years while the costs of long term care in an institutional setting (adult day care, assisted living and nursing home care) have risen fairly dramatically over the last five years while.

Here are a summary of the current average costs and percentage cost increases for various types of assisted living:

  • Homemaker Services: The national hourly median rate for homemaker services (help with cooking, cleaning and errands) is currently $18 – it has risen 0.84 percent annually over the last five years.
  • Home Health Aides: Home Health Aides help with bathing and dressing, but do not provide medical care. The hourly rate has risen only 1 percent annually over the last five years and is currently at $19 an hour.
  • Adult Day Health Care: Adult Day Care is an institution that provides social and other related support services during the day, but the patient does not reside at the center. The current national median daily rate is $65. This reflects a 6.56 percent increase since 2012, but only a 1.61 percent five year annual growth.
  • Assisted Living: Assisted Living facilities provide hands on personal and medical care for those who cannot live on their own, but do not require constant care. The national median monthly rate is $3,450 (equivalent to about $115 per day). Assisted living costs have grown at 4.26 percent annually in the last five years.
  • Nursing Homes: Nursing homes provide skilled nursing care 24 hours a day. The national median daily rate for a private room in a nursing home is $230 a day. This cost has seen a five-year annual growth of 4.45 percent.

When you go through the Reverse Mortgage application process, you will be required to participate in a Reverse Mortgage counseling session. Most borrowers find these sessions extremely useful as they can help you with budgeting and thinking through long term care options.

Find a Prescreened Reverse Mortgage Lender and Set Up Your Reverse Mortgage Counseling Session.
Estimate Your Reverse Mortgage Loan Amount Now.
Get a Quote for Long Term Care Insurance.

Retirement Health Costs are Higher than you Think

According to the Center for Retirement Research at Boston College, the above is largely true no matter how high you think they are.

A good rule of thumb for estimating health costs in retirement is that Medicare will, on average, cover 60%, while the remaining 40% come out of the retiree’s pocket. Unfortunately, according to a lengthy paper published recently by professors at UCLA and Harvard, most would-be retirees habitually underestimate the impact that health care costs will have on their finances, either blithely assuming that Medicare will take a larger share of the burden from them or failing to appreciate just how large that 40% liability is likely to be in terms of real dollars.

So how large is it? Large, at least according to the Urban Institute’s calculations. The median retiree will spend more than $6,000 per year on health care costs alone, while a particularly high spender (or one nearing the end of their life) may be spending as much as $14,000 yearly. This is all without counting any significant end-of-life costs (most retirees spend the majority of their lifetime health-care costs in the last eighteen months of their lives.

Given how large health care costs loom in retirement, it goes without saying that any significant underestimation of their impact can have a staggering effect on your retirement security. This isn’t to say that every retiree needs to budget $15,000 a year for such things, but a careful calculation of retirement expenses is impossible without an accurate understanding of the costs you are likely to face. For these reasons, NewRetirement has always recommended the use of a proper retirement calculator, if only to set realistic boundaries, not guesses, on what your expenses are likely to be, and what level of preparation will be necessary to ensure that you have the capacity to meet them.

Whether you use NewRetirement’s calculator or another source of information, nobody should go into retirement armed only with guesswork.

Learn more about the true costs of retirement with the NewRetirement Retirement Calculator.

Learn more about Supplemental Medicare Insurance at NewRetirement.com.

Are You $250,000 Short on Retirement Savings? You Are Not Alone!

According to a new study from Ameriprise Financial, there appears to be a significant disconnect between average retirement goals and reality.

While the study suggests that Americans have a positive view of retirement – with 78 percent of respondents expecting to be extremely happy, it seems that most Americans have a gap of $250,000 between their actual savings and what they will need to be comfortable in retirement.

The good news is that it is possible to manage this gap:  create a strong financial plan, work longer, live more frugally and eliminate credit card debt.  You could also consider a Reverse Mortgage or look for opportunities to downsize your home.

Resources:

–>  Do You Have Enough for Retirement?  Find Out by Using the NewRetirement Calculator.

–> Can Working Longer Help You Make Up the Shortfall?

–> Considering a Reverse Mortgage? Estimate Your Loan Amount Now.

You Might Want to Reconsider These Common Medical Tests!

The Choosing Wisely campaign, an initiative by the American Board of Internal Medicine Foundation in partnership with Consumer Reports, kicked off last spring. It is an attempt to alert both doctors and patients to problematic and commonly overused medical tests, procedures and treatments.

As we get older, we may find the need or desire for significant medical testing and procedures.  However, research is showing that some common tests and treatments may not be necessary.  If your doctor is recommending one of the following things to you, it may be wise to question them about why.  Discussing things with your doctor will help keep you  healthy now and as you age.

A few of the tests that Family Physicians recommend you question include:

  • Imaging for Lower Back Pain: Unless red flags are present, physicians recommend waiting six weeks for imaging on low back pain.
  • Antibiotics: Don’t insist on antibiotics for acute mild to moderate sinusitis unless symptoms last for seven or more days or symptoms worsen after some improvement.
  • Osteoporosis X-Rays: Don’t use dual-energy x-ray absorptiometry (DEXA) screening for osteoporosis in women younger than 65 or men younger than 70 with no risk factors.
  • EKGs: Avoid cardiac screening for low risk patients without symptoms.
  • Carotid Artery Stenosis: Don’t screen for carotid artery stenosis unless there are symptoms.
  • Cervical Cancer: Don’t screen women older than 65 years of age for cervical cancer who have had adequate prior screening and are not otherwise at high risk for cervical cancer.

For a full list from the Family Physicians and 50 other medical specialties, you can go to http://www.choosingwisely.org.

Additional Resources:

Do You have the Best Supplemental Medicare Coverage?  Instantly compare rates and services.

Boomers Bear the Brunt of the Bust

It’s no secret that the economic downturn of the last five years has been hard on everyone.  But according to a recent New York Times article, the evidence is that the worst-hit have been older workers just about to enter retirement.  The first to go when layoffs come, the last to be hired for what few positions there are available, Seniors were pushed out of the workforce in record numbers, with important consequences for the health of their retirement plans, as well as their ability to transition into retirement at all.

It’s likely that if you’re reading this, you were already aware of how badly the recession hit older workers.  The question is what to do about it?  If your retirement plans are in ruins or you’ve been laid off with little hope of being hired elsewhere, what are you supposed to do about it?

Well, according to the article, not a whole lot.  There are some solutions that the article rejects, such as the notion of retraining.  Older workers don’t get rejected for jobs because they’re unqualified, they get rejected because of age bias.  Companies are more willing to take a risk on training and acclimatizing a new hire if there’s a possibility that the hire will be around for decades, and older workers tend (on average) to have more health issues that can drive up premiums for company-offered health insurance.  For those leaving the labor force, the article speaks of increasing numbers of seniors leaning on disability programs or taking social security at the earliest possible point.

Optimizing Social Security is nothing new, but most optimization schemes assume that you will be looking at maximizing your overall income from the program, irrespective of the time it takes for you to do so.  As we’ve all seen recently, bad economic times can change this calculus, and the prospect of losing 20% or more of your benefits seems significantly less daunting when the alternative is not having enough money to pay the mortgage.  Yet as always, even when circumstances force you into making less than optimal choices, it’s important to know your options so that the choices you do make hurt as little as possible.  Choosing to start Social Security early may be tempting, but such a choice is almost irrevocable, as changing back to a higher monthly payout requires you to pay back everything you’ve received from the program so-far.   The bottom line is that the recession has had a major impact on the Boomers and they’ll need to think creatively about how to pay for their retirement.  Hopefully, even if your retirement plan has fallen off the rails, this site can help you piece together a new one by helping you find strategies, products and services to help you secure your retirement.

Learn more about Optimizing Social Security at NewRetirement.com

NewRetirement Calculator – Analysis and Improvements

What to do about Social Security?

Social Security Trust FundIf you follow the news related to retirement for any length of time these days, you will encounter some article on the woes of Social Security, either presently or imminently.  Recently, Gary King and Samir Soneji, professors at Harvard and Dartmouth respectively, wrote an article for the New York Times in which they claimed that the situation with Social Security is actually worse than everyone thinks, and that urgent action is needed.

What is the problem?  According to the article, the calculations used to determine the fiscal solvency of Social Security are incorrect, using assumptions that are outdated and figures that are obsolete.  In essence, the difficulty is increased longevity.  Plummeting smoking rates and vastly improved treatment of (among other things) cardiovascular disease mean that people are living considerably longer, an increase that even our national diabetes and obesity epidemics are not denting.  Frankly put, the longer people live in retirement, the faster social security’s trust fund will drain.  The authors, in fact, estimate it will be empty within two decades.

It is not the place of NewRetirement to speak to whether or not that estimate is likely to pan out, but instead to discuss what this means for you as a prospective retiree.  In the short term, this article and others like it raise the visibility of the problem that Social Security faces, potentially increasing the chances that changes will be made to how the program works.  These changes could include raising the retirement age (the authors suggest hiking it as high as 69), increasing social security taxes for those with incomes above a certain level, reducing or eliminating yearly COLA adjustments for current retirees, or, of course, simply reducing the payouts that future generations of social security recipients will receive.  Obviously, any of the above solutions will impact, perhaps drastically, your retirement plan.

So given that nobody knows what, if any, solution will be implemented, what can you do to ensure that your retirement is secure?  One technique is to model out possibilities using an advanced retirement calculator.  A calculator can help you consider contingencies, ensuring that you have a plan if your retirement age is shifted upwards by two years, or your payouts wind up being less than expected.  This preparation work will stand you in good stead if new rules change the math on optimizing social security. But ultimately, the solution may have to fall outside of Social Security.  Middle Class retirees already cannot count on Social Security maintaining them at their current standard of living, and it may well be that the retirees of the future will simply have to reduce further the share of their retirement that is covered by Social Security.

As such, having a retirement plan that uses Social Security, but does not depend primarily upon it, is increasingly becoming a must-have for those looking to their golden years.

Learn more with NewRetirement’s Social Security Calculator

Find strategies for optimizing Social Security



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