Baby Boomers: Maybe Some Retirement Help!

An even worse travesty is now the 85 years old and OLDER are going back to work.

Let me fully disclose: I have been in the Real Estate business for 46 years. I do not lend money or originate loans. However, I am a Baby Boomer, most of my friends are Baby Boomers! Almost all of them are BROKE!! Woefully unprepared for retirement does not adequately describe their situation; more like shell-shocked when faced with Reality! The truth about retirement is most are retiring from their income.  The average Social Security check for 2018 based on a Boomer retiring today is $1341 a month; for LIFE!!! If a married couple retires, the average monthly check is $2212, until one dies! Almost all Baby Boomers take Social Security at the age of first eligibility which is 62 not the full retirement age of 66 which would net them at least 30% more. Most consider it FREE MONEY!!!

Unfortunately, even retired couples still need to EAT, still need to pay the Electric Bill, and the Water, Bill, and let’s not forget TAXES.  Most retirees do not own their properties free and clear and have small mortgage balances with monthly payments. The GAO (Government Accounting Office) estimates that the average retiree has a monthly living cost of $3900; much higher in California, New York, Seattle, Portland, Chicago to name just a few. Monthly costs can easily exceed $4500+. The GAO also reports that a full 51% of retirees have NO RETIREMENT funds!

Fidelity reported on CNBC that the average 60-69 year old has accumulated $192,800; annuitized under the 4% Bengen Rule the monthly stipend is $637!  If you have accumulated $300,000, 50% more than the average, in your nest egg after a LIFETIME of saving, you are in the 86thpercentile; almost an Elite!!! $300,000 annuitized over 30 years using the Bengen Rule of 4% will net just $1000 a month.  If you live beyond 30 years, you are in serious trouble!! Social Security and an annuity of $1000 is still only around $3300 a month;  an Economic shortfall and the reason that after only 10 years of retirement, 75 years and older are BACK TO WORK with a Labor Force Participation Rate of 63%.  The highest segment of all Americans.

An even worse travesty is now the 85 years old and OLDER are going back to work.

The obvious reason is the lack of Income. After only 10 years of retirement, even the moderately prepared retiree is scraping to get by.  Just paying the bills; not taking the grand kids on a Disney Cruise, or walking the Great Wall Of China, or learning to cook in France. A miserable existence. Failing to plan is planning to FAIL!! 

The Strategy for Financial Freedom takes time; usually about 7 to 10 years with each year getting better. The hardest part of The Strategy is STARTING!! The Plan is best implemented early as Retiring at any age is certainly the goal. However, those that are in immediate NEED may still find help; but not always as each circumstance will be different.  FHA has been the lead lender for Reverse Mortgages. However, the FHA program is fairly expensive. Just recently, Reverse Mortgages with much higher loan amounts and hugely lower costs are coming to market that can in many instances significantly CHANGE LIVES!  A developing strategy with many applications would be to obtain a no qualifying Reverse Mortgage on a Primary residence. This removes the monthly payment component and usually gives a new monthly cash stream or a lump sum which can be invested in cash flowing rentals that grow. This simple strategy can easily make a difference of $2-4,000 extra every month.

Many of my clients will benefit from this simple strategy; for many this will make LIFE so much better.  This may not work for you, but maybe it will!  Talk to your Mortgage Professional and explore your options. This could be a Game Changer! My best to you!