Transitioning Into Retirement

8 Ways to Ease the Shift


Everybody talks about being retired, but less common is the in-between period when you may no longer be working full-time, yet are not what you might consider “senior” (especially as this definition keeps getting revised upwards!). How can you help the reverse mortgage clients and prospects you serve (and perhaps their Boomer children) to ease the transition into retirement?

Life shifts can be tricky to navigate, at every stage. I remember thinking, a few weeks after starting my first professional job, “Is this all there is?” I was surprised that I felt like a fish out of water, since I’d worked since age 15. But this felt like the true end of childhood, and all I could think was, “Do I have 40 more years of 8 to 5 to look forward to?”

Re-tire Your Career Wheels and Tread A New Path

reverse mortgage newsAt the other end of the career spectrum, similar feelings may arise. No matter how illustrious one’s career — in fact, the more notable someone’s career path, the more challenging retiring may appear — at some point, most people will surrender this role for the mantle of retiree. It’s only the exceptional who are still teaching, inventing worthwhile products, or practicing medicine well into their eighties and nineties, though this number is also likely to increase along with healthy longevity.

Some of the best retirement wisdom comes from those who’ve been there. Ninety-year-old author and former war correspondent Roy Rowan writes, in Never Too Late: “Living happily without your old job title can be made easier by re-tiring the wheels of your career, so to speak, and driving off in a new direction.”

And this 86-year-old counsels retirees (or anyone in the second half) to ask themselves the one question that will change your life.

Here are eight practical suggestions to help your reverse mortgage clients — and the younger generation — prepare to transition into retirement:

1. Volunteer! From libraries, schools, and animal shelters to digital creativity (blogs, webinars, social media…), there are myriad ways to share your wisdom and support, online and in the physical world.
2. Launch a flexible, part-time gig from home, such as a neighborhood dog walking service.
3. Create a daily/weekly structure to stay healthy and engaged, including such staples as exercise, journaling/meditating or similar, and social activities.
4. Develop a daily check-in with a friend who is also about to retire, or one who has already retired and can support your transition.
5. Enroll in a lifelong learning course through such schools as the Osher Lifelong Learning Institute (OLLI) part of UC Berkeley, or the Fromm Institute for Lifelong Learning at the University of San Francisco.
6. Explore The Transition Network, a national resource for women 50+.
7. Join or start a Meetup group that fits your interests, whether that’s dance or dream interpretation, hiking or Ham radio.
8. Become digitally literate. Now that you have the time, you might be amazed by what you can do on your laptop or smartphone. Resources such as New York’s Senior Planet Exploration Center call it “aging with attitude”!

Finally, maintain (or develop) your sense of humor most of all. While few of the chronologically gifted might wish to star in these movies, some of the titles are an lol (laugh out loud).

 

This is why we have the Financial Assessment

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One couple’s story highlights the rationale behind the Financial Assessment

reverse mortgage newsIn an ideal world, the government and housing agencies would not have to protect people from themselves. The truth is that is not the world we live in, especially when it comes to reverse mortgage borrowers. A recent survey by the American College shows a widespread lack of financial literacy for both retirement  and reverse mortgages with the vast majority of respondents receiving a failing score.  It should come as no surprise that some senior homeowners who lacked basic knowledge of both are facing foreclosure today.

Reverse mortgages are biting back, this according to a recent article in the Eagle Tribune. It outlines the woes of what was once uncommon; an older couple in financial crisis who are facing foreclosure after getting a reverse mortgage. The story begins with Kenneth and Sadako Miller who saw a reverse mortgage television ad six years ago.

Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary, and technology? Visit ReverseFocus.com today.

Got Skills?

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Are You Providing These Four Things?

reverse mortgage newsPerhaps quiet, unassuming and underestimated, thousands of reverse mortgage professionals march bravely into the world of sales, that is the art of education and influence. This brings to mind the quote from the movie “Taken” in which the lead character states “what I do have is a very particular set of skills. Skills I have acquired over a very long career.”

Too often sales mastery is confused with being a slick, fast-talking, silver-tongued or manipulative salesperson. The truth is each of us have practiced sales skills long before we ever entered the workforce. Remember persuading your parents to buy you that box of cereal or asking that special someone out one a date?

Here are some skills you may be using or that have become a bit rusty.

1. Active listening. The most common mistake we make is listening to respond. Instead, try listening to reveal. Focus on…

Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary, and technology? Visit ReverseFocus.com today.

HECMs vs. The Establishment

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The Financial Planning “Establishment” Still Reluctant About HECMs

reverse mortgage newsTo use a political analogy, reverse mortgages are the anti-establishment candidate. Long viewed as a loan of last resort, criticized for high costs and maligned by many consumer groups as being fraught with pitfalls the new reverse mortgage continues to push against the financial establishment for its place at the table of retirement options.

A recent article in the Retirement Income Journal outlines why many financial advisors and reverse mortgage professionals don’t get along. To be fairer let’s say ‘see eye-to-eye’. Yes, despite the numerous uptick of interest in the HECM within the financial planning community, most do not recommend nor consider a reverse mortgage according to the article. “As a practical matter, advisors who don’t have mortgage licenses can’t make direct commissions from a HECM or earn a finder’s fee for a HECM referral…

Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary, and technology? Visit ReverseFocus.com today.

Putting Clients First is No Longer a Slogan with Fiduciary Rule

The Implications for Financial Professionals Warrant a Second Look


It’s one of the biggest game-changers for financial professionals: the expanded definition of a fiduciary by the Department of Labor under the ERISA act. The rule extends beyond those managing assets to include those giving investment advice for a fee or other compensation.

What does this mean for financial professionals?

  • Transactions involving ‘qualified’ retirement plans are covered by the rule (IRAs, 401(k)s, etc)
  • Expanded definition of fiduciary goes into effect April 2017
  • Increased disclosures of costs & fees when moving money from one company to another
  • Insurance-based products will be under increased scrutiny
  • Advisers should present all options that are in their client’s best interests

Home Equity Warrants Consideration

reverse mortgage newsAccording to the U.S. Census Bureau, the typical married couple entering retirement has $92,000 in non-equity assets and $192,000 in home equity. With that in mind does it really make sense to advise a client to sell securities in a down market to maintain their retirement cash flow without mentioning home equity?

In Jamie Hopkin’s recent article in Investment News Hopkins says “Far too many financial advisers overlook home equity as part of a retirement income plan. With heightened regulatory concerns about doing what is in the best interest of the client, it would be prudent to explore and discuss home equity strategies with clients.”

Consider a client over age 62 with $300,000 in home equity. If the market is down 25% is it truly in the client’s best interest to sell stocks at a loss without at least considering what may be their largest asset? Such oversights could potentially raise red flags in the future.

Reverse Mortgages, Not a Silver Bullet but a Potential Tool

The Home Equity Conversion Mortgage (HECM), better known as the reverse mortgage, is an FHA-insured mortgage for homeowners 62 or older which allows them to access a portion of the equity in their home without requiring monthly mortgage payments.

One strategy touted in several financial publications is the ‘standby reverse mortgage’. This approach allows the homeowner to secure a HECM line of credit. This credit line is unique in that the unused portion grows each year, no payments are required and the credit line cannot be frozen or reduced if housing values were to fall as long as the borrower meets the ongoing obligations of the loan.

Utilizing the ‘standby reverse’ strategy one could access a portion of the HECM line of credit to meet income needs in years when the market is down allowing the portfolio to recover. A great way to overcome sequence of returns risk. Several Monte Carlo simulations have shown this approach to substantially increase the longevity of the portfolio and sustainable withdrawals.

Hopkins wrote in his recent article “Although a fiduciary standard might not explicitly touch on housing wealth, there will be added regulatory muscle to consider all of a client’s available assets in the development of their specific plan.”

Articles on “Standby Reverse Mortgage”

Journal of Financial Planning
Advisor Perspectives
Investment News

The information provided in this article should not be regarded as investment advice or as a recommendation regarding any particular security or course of action. Opinions expressed herein are strictly those of the author.

Five Things Your Clients Need from You

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Are You Providing These Five Things?

 

reverse mortgage newsWhether you’re selling a widget, service or reverse mortgage your clients want and need five things from you, their trusted professional. Are you providing all five?

It’s easy to lose track of our customer service in the rush of trying to attract new borrowers, getting loan conditions cleared and keeping your applicants committed and moving forward with their reverse mortgage. Here are five things each of your clients need from you.

1. Accessibility. If the chances of your prospects or applicants getting ahold of you and receiving a response are similar to a constituent reaching their state senator it’s time to make a change. One way to avoid frustration is to set borrower expectations early. You can do this by…

Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary, and technology? Visit ReverseFocus.com today.

Is It Time to Get Help?

Tools for Family Caregivers

As we explored last week, Millennials are at the forefront of easing the aging process for today’s elders, from tech innovations that enhance senior living communities, to apps that facilitate difficult end-of-life discussions.

But what happens even earlier in the process, when Mom or Dad (usually Dad!) refuses any sort of in-home help, except perhaps for the occasional housekeeper? How does a family know whether their loved one is truly safe living alone at an advanced age, even if he or she is still fairly healthy?

Nate O’Keefe had the same questions, so the Millennial entrepreneur founded Roobrik, a series of online decision tools designed to provide family caregivers with the information they need to make the right choices at the right time.

Roobrik offers a trio of assessment tools that help family members or concerned others (perhaps the senior’s reverse mortgage advisor, for example) determine whether changes to a senior’s lifestyle might be in order. Each tool scrolls through a series of questions, becoming more personalized with each response. Based on the respondents’ answers, Roobrik lets you know whether immediate intervention would be prudent, or if it’s safe to simply keep a watchful eye on the situation for now. The current tools include:

1. Is it time to get help?
2. Is it still safe to drive?
3. Is it dementia?

Preventing Exploitation

Tools such as Roobrik may also help reduce the incidence of elder abuse, which Chronic Care Advocacy calls “an under-reported epidemic” due to factors such as social isolation, lack of caregiver education, and reluctance to report. And it isn’t necessarily physical. According to the National Research Council, exploitation is the most common form of elder abuse.

The Older Americans Act defines exploitation as, “fraudulent or otherwise illegal, unauthorized, or improper act or process of an individual, including a caregiver or fiduciary, that uses the resources of an older individual for monetary or personal benefit, profit, or gain, or that results in depriving an older individual of rightful access to, or use of, benefits, resources, belongings, or assets.”

Protecting your reverse mortgage clients, prospects, and other seniors in your sphere begins with understanding the risk factors that innovators such as Roobrik are enabling families to assess, and knowing what preventive measures are available.

Caring for the Caregivers

While older adults with cognitive impairment may be at greatest risk of exploitation, a huge risk factor is caregiver stress and burnout. Some of the tech solutions to ease caregivers’ work can make all the difference, as can caregiver recognition that they can’t do it all, and need to care for themselves as well as for the elder in their charge.

In addition to communicating with other close friends and family members who can support the caregiver, the Office of Chronic Care Advocacy urges seniors to use professionals to ensure their financial and legal affairs are in order, including a properly drafted estate plan with safeguards in place.

When the circle of care extends to everyone involved — a network in the truest sense — elder loved ones, their families, caregivers, and professional associates will all be well served.

Now or Later? That is the Question

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The Cost of Waiting & Hedging Against Falling Home Values

reverse mortgage newsPerhaps it is laughable to some to even consider hedging against falling home values. After all homes across the nation have appreciated nearly to their pre-housing crash levels. How quickly many homeowners forget the harsh lesson learned in 2009 that what comes up may come down. The truth is beyond being a source of cash flow or a retirement planning option, reverse mortgages can help older homeowners hedge against the risk of falling home values. Even worse, those who wait for their homes to appreciate could end up losing a substantial portion of their borrowing power when interest rates increase.

Jack Guttentag, better known as The Mortgage Professor, addressed the considerations of waiting to get a reverse mortgage in his recent column in the Huffington Post entitled “Should You Take a Reverse Mortgage Now, or Would It Be Better to Wait?

Guttentag begins by describing the notable difference in the sense of urgency that a homebuyer has versus a potential reverse mortgage borrower. “ A prospective home buyer…

Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary, and technology? Visit ReverseFocus.com today.

Two LinkedIn Power Tips

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Posting to LinkedIn Groups & Adding Backlinks to Your Profile

reverse mortgage newsLinkedIn, the world’s largest online professional network. If you don’t have a profile the question is why. If you do apply these simple yet powerful principles to expand your influence, increase referrals and boost your bottom line.

Today we are going to cover (1) how to backlink your website in Publications and (2) how to post in LinkedIn Groups.

First, let’s talk about back-linking on your profile page. Now let’s clear the confusion of Posts & Publications. Posts are typically content you publish such as articles or videos. Publications typically link to scholarly articles but can be leveraged to provide increase SEO and traffic to your websites or blogs. First login to your LinkedIn account and click on your profile. You should be on your profile page. Next, scroll down until you see the section titled “Publications”. Mouse over this box and you will see a button appear “Add Publication”, click this. Enter an attention-getting title, enter your…


Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary and technology? Visit ReverseFocus.com today.

Millennial “Retirees”? Not Exactly…

But they’re smoothing the way for today’s elders


What happens when a Millennial becomes Entrepreneur-in-Residence at a retirement community? He gets the inside scoop on what daily life is really like for people who’ve lived most of their lives minus the technology 20- and 30-somethings take for granted. And the experience engenders a fresh appreciation for positive aging.

This unusual program originated out of a desire to develop technologies to address and improve physical, social and mental challenges for the very old — and immersion in their daily experience seemed like the smartest way to learn what might be needed.

Says Brookdale Senior Living Entrepreneur-in-Residence Andrew Smith, “People 80 and above are the fastest growing population, but for too long we’ve been designing products for everyone but this population. There’s a huge opportunity to enhance seniors’ lives with new technologies, services and products.”

senior-techSeniors: The Original Tech Innovators

This population is much more tech aware than Millennials might think at first blush, Smith reminds. “If you are 100 years old, you have lived without the web for 85% of your life. But I balk when people say seniors are resistant to technology, because they are the very inventors and consumers who drove all this innovation in the first place. Think about it: television (1927), microwaves (1947), putting a man on the moon (1969), home video game consoles (1972), mobile phones (1973), Sony Walkman (1979), and on and on.”

Smith’s 2-minute video shows how eager the residents were to share every aspect of their lives with him, knowing he was there on their behalf. It’s a heartwarming testament to the incredible value of simply listening and asking questions about elders’ lives, which is what the best reverse mortgage professionals do every day with their clients, prospects, and family members of the seniors they serve.

How Millennials are Transforming Death Discussions

Perhaps even more surprising is the way Millennials have stepped up to face the last taboo, many decades before it will become reality for most of them: death discussions. A Stanford medical postdoc who witnessed “how often we put patients through painful procedures without having a meaningful conversation about their health goals and all the potential outcomes,” co-founded Copilots in Care with his business school friend.

An app that connects patients to in-person social workers who help them reflect on their medical wishes and facilitate open discussions with family, Copilot asks the questions people might not have considered — or may have thought about, but refused to discuss.

Says Evy Schiffman, 65, whose husband was diagnosed with terminal lung cancer at 63, “Boomers have always been willing to speak about the unspeakable. We will transform the way society looks at, talks about and faces death. Because death is not optional.” She and husband Neil talked candidly about how Neil defined quality of life, and what he wanted his death to look like. Now innovative startups such as Copilots in Care will make it easier for everyone to have the essential discussions that allow them to have the end of life they deserve.