Reframe the Game

reverse mortgage news

Reimagining the “R” Word

Retirement. It’s no longer a “retreat” from life (if it ever was). As we’ve explored multiple times, people are retiring later or downshifting from full time to part time employment, or moving into a consulting role or some other line of work, rather than simply leaving the job market altogether. And those who do fully retire from the work world are still fully engaged in life — sometimes so busy they wonder how they ever fit a job into their day.

Here are some suggestions gleaned from a retirement workshop for how we might reframe “retirement”. Ideas take their inspiration from sports, advertising, and plain old ingenuity. Reverse mortgage professionals who enjoy creativity, consider these concepts:

  • Act 2
  • Between jobs
  • Bonus years
  • Continuum
  • Creative aging
  • Downshifting
  • Encore
  • Field of Possibilities
  • Growing bolder
  • Inspirement
  • Life 2.0
  • Living more
  • My time
  • Next Chapter
  • Next stage
  • Post-grads
  • Prime time
  • Protirement (it’s not for beginners!)
  • Rebalancing
  • Re-engagement
  • Refirement
  • Regeneration
  • Repotting (in new soil)
  • Retreads
  • Rewirement
  • Sage-ing
  • Seasoned
  • Success to Significance
  • The Creative Age
  • The Gifted Years
  • Third Half
  • Third Quarter
  • Unstoppable

My personal favorites for many years have been “chronologically gifted” and “over the speed limit”.

Attitude of Gratitude

Becoming chronologically gifted is about more than a date on the calendar, obviously. Dorothy Sander, whose website is Aging Abundantly, exemplifies the attitude of gratitude that defines seniors who become elders, not just elderly. On her 65th birthday this past summer, Sander penned a post entitled, “65 Things I’m Grateful for On My 65th Birthday”. Her gratitude bowl begins with her family: a loving husband, motherhood to “two sons who make me proud every day”, a beautiful daughter-in-law and good health.

Those take up the first eight spots. Then Sander branches out to embrace the wider world: the kindness of strangers; Nature: green grass, sunshine, the ocean, the wind, mountains, sunrises and sunsets, rain and roses; music that lifts her spirit; massage that restores her body; long walks, birdsong, delectable foods, technology that enables her to stay connected to loved ones near and far — and yes, challenges that provide opportunities for growth, resilience and wisdom to blossom.

Dorothy Sander is an elder.

No regrets

The sage-ing, seasoned, repotted, unstoppable seniors who comprise the above list will not look back at the end of their lives and wish they’d gone farther, forgiven sooner, taken that risk. Your role as a reverse mortgage loan originator is not necessarily to encourage your senior clientele to live full out — and yet, in a sense, a HECM can be the means to do just that, since it helps seniors relax about where the money they’ll need in their later years will come from.

The twenty biggest regrets of those close to death all have to do with wishing they’d lived larger on life’s canvas: “I wish I’d…”

  • Taken more chances
  • Persevered
  • Expressed love more often
  • Appreciated what I have
  • Listened better
  • Released a grudge
  • Traveled
  • Stayed in touch with friends
  • Trusted my intuition.

Protirement takes moxie. It’s a little like the delightful message on the Bag O’ Rags™ I bought recently to wax my car. The package insert reads, “Warning: This product is not for wimps! These rags have been used in industrial settings. Although they’ve been commercially washed, there might be stains and junk on them. If you want to pay 10 times the price to wipe up your muck, buy the other stuff. You’ll find those in aisle 13, next to the quiche pans.”

Life is messy and unpredictable, and by the time we get to be 60, 70, 80, 90 and beyond, we have stains and junk on us, metaphorically speaking. That’s part of aging, and washing doesn’t remove them. Seniors whose “life stains” spring from love and loss and listening and refirement and growing bolder are truly over the speed limit, driven to “re-tire” who they were and tread a new path, without regrets.

The Bank of Mom & Dad

reverse mortgage news


ePath 100K RM leads

Reverse Mortgages & parental down payment assistance

[Download transcript]

It’s both a demographic and social phenomena. More parents are supporting their adult children, in many instances keeping them financially afloat according to a recent article in The Financial Brand. Many reverse mortgage originators have seen their borrowers use a portion of their loan proceeds to help pay for college or bail out their children from financial peril. That trend is expected to increase for parents of Millennials. The question is are today’s baby boomers selling out their own retirement to help their children?

Social Security Insecurity

reverse mortgage

Social Security & an IPA


Pressing The Reset Button: The Gap Years
As human lifespan climbs steadily towards the century mark, Social Security is only one — and woefully inadequate — means of funding a lengthening retirement period. In fact, we’re in the midst of creating second-stage work lives, or “encore careers,” that are evolving at the intersection of money, meaning, and social impact, says social entrepreneur Marc Freedman, author of The Big Shift: Navigating the New Stage Beyond Midlife

Adults 60 and over are returning to school in droves to train in entirely new areas, often centered around social issues such as the environment, health, education, and social services. Educational innovation, from lifelong learning to distance classes via the Internet, is proliferating to keep pace with this changing demographic. But where are the resources to pay for this transition training?

 

Retirement And Individual Purpose Account

Enter the Individual Purpose Account (IPA). Freedman suggests that rather than raid your IRA or your children’s college fund, why not create a tax-advantaged Individual Purpose Account targeting the transition years? Such accounts “could be both a policy opportunity and a potential bonanza for the private sector, which is offering retirement products but little in the way of savings vehicles for alternative approaches to the last two, three, or four decades of life.”

Reverse Mortgage Retirement Funding

Until such time as the government implements this visionary idea, a reverse mortgage might be an optimal resource to fund an IPA — especially because reverse mortgage holders can tap their loans only when needed, prudently saving the rest.

In fact, reverse mortgages can be reimagined as “seed capital” to help people invest wisely in the next stage of their lives, whether that involves expanding their education to enter an encore career, using a lifetime of accumulated knowledge and wisdom to consult or mentor, traveling, writing a book, or any combination of the above, and more. “Reverse mortgage” accurately describes this dynamic demographic, who are reversing expectations of retirement and reimagining what the next stage of life looks like!

 

Their Nest Egg is Gone. Now What?

reverse mortgage news

We looked at some of the country’s oldest retirees, who found their callings and joy late in life and want to keep working for pleasure as well as profit.

But what happens when you’ve saved and planned for retirement — and then the rug beneath your feet morphs into a magic carpet of debt and disintegrates?

That’s what happened to one Boomer couple, now 66 and 71, who had all their ducks in a row for a rosy retirement. A triple threat (serial job loss, serious illness, and the financial markets collapse) combined to effectively eliminate their savings.

To repair the damage, the couple invited their son and his family to move in while they tried to sell their house and move to a more affordable location. Too bad they didn’t know about or perhaps didn’t consider, a reverse mortgage, which might have been the ticket to a smoother ride through the rapids. Now, even with the husband once again employed, they are saddled with massive credit card debt.

Some financial pundits hold the opinion that owning a house itself is the culprit, and advise seniors to pay off their mortgage and rent in retirement. Yet this suggestion undercuts everything many older adults have imagined and planned for their entire lives: living out their days secure in the knowledge that their longtime home will see them to the end of life in comfort and security.

Clearly, housing is the overarching expense in retirement as it is in our younger years, as confirmed by a recent Employee Benefit Research Institute report. Yet it’s not the only concern — or expense. While paying for a roof over their heads remains a constant 40-45 percent chunk of expenses in retirement, medical costs rise sharply. By age 90, the report states, “health care expenses account for more than 20 percent of the households’ entire budgets.” End-of-life health care costs can be astounding, even with Medicare: those in the 95th percentile of health care spending in 2011 spent almost $30,000, while those in the 25th percentile spent less than $1000.

Preparation and adaptation are key. Whether or not a dream job is on the cards for a senior, knowing they will be able to remain in their home is essential. Awareness of the evolving reverse mortgage option and how this might benefit their nest egg is smart recourse when creating a retirement planning toolkit — especially since the mass affluent are already using HECMs strategically to support their portfolios in a down market.

 

Older Homeowners Facing 3 Risks


ePath 100K RM leads

Even retirees who saved for retirement are at risk

Older American homeowners may want to take a second look at all their retirement options sooner than later.  Retirees who have saved for their retirement may find themselves challenged more specifically in three ways: home appreciation, stock portfolio losses, and increasing interest rates. [download transcript]

Seasoned reverse mortgage originators can certainly recall how the borrowers who took the loan prior to 2009 locked in a portion of their home’s value despite the market crash. While it’s highly unlikely that we’re in another housing or credit bubble, home appreciation is slowing nationwide in 71 of the largest 100 markets. According to the latest data from Black Knight, home values have shown their biggest single-month decline, albeit a modest one, since the housing market began to recover. In the west, California saw home price appreciation growth drop from 10.3% to 3.7% in nine months. While far from a death knell for the housing market this does serve as a reminder that a homeowner’s access to equity is no certainty, and what equity they have could dwindle significantly. A point worth making with prospective borrowers.

While the nation watches the stock market on their daily news shows, retirees are especially wary with good reason. Despite the Dow Jones Industrial Average’s significant gains in the last 3 years, the overall equities market remains volatile. That volatility is particularly real for retirees who may find themselves unable to draw the same amount from their investments each month without significantly shortening the life of those funds. As a recent New York Times article put it “If you have to start selling investments when they are worth less, you’ll have to sell more shares to get the cash you need — and the

Engaging Ways to Work Past 65

reverse mortgage news

Premier Reverse Closings

Retiring at age 65 is so early 20th century — when people were lucky to even live to 65. Today, when we may have an entire generation’s worth of days to enjoy after age 65, retirement age is arbitrary. A lot has to do with how much we love what we do, how much we need the income, and how else we wish to spend our time.

A HECM can address the financial question, so anyone 62 or older is freed from working later in life solely to generate income. Knowing their home equity can provide a source of liquid assets as well as eliminate their largest monthly bill enables older workers to focus on the question of work itself: do they still want to work, and if so, how?

Now that 70 seems to be the new 60, at minimum, with people engaged in encore careers that fulfill them on many levels, it seems work, itself, is a tonic that helps keep people feeling purposeful and of use. According to a Gallup poll, almost a third of U.S. workers anticipate working past age 67.

Engagement Remains High

Baby Boomers appear even more reluctant to retire in their mid-sixties than previous generations, with ten percent saying they “never expect to retire.” Seeing as Paul McCartney just scored his first number one album in 36 years, at age 76, that’s understandable!

What’s intriguing is that older workers seem to be more psychologically engaged than their younger counterparts, perhaps because they’ve established a good work ethic over the decades — or simply want to ensure they hang on to their job as long as they want to keep it.

But if an older worker is ripe for change, possibilities beckon.

Premier Reverse Closings

Jobs in Cool Places

Just as HECM holders are now able to romance the road by lodging in high-end co-work/co-live environments for short periods of time, the types of positions they might find are worth exploring, once the pressure of full-time employment eases. That’s where CoolWorks comes in.

For 23 years, CoolWorks has been connecting people seeking meaningful and exciting work with employers looking for their energy, enthusiasm and knowledge. Sound like any seniors you know?

From national parks to retreat centers, conservation centers to dude ranches, CoolWorks lists positions that may appeal to older workers seeking something a little different. They even have a category, Older and Bolder, which states, “If you rest, you rust!”

An encore career might be a season working (or volunteering) at Yellowstone National Park, for example, or exploring life in a new state (perhaps one where a senior will later downsize with an H4P). Be forewarned, though: while there is a plethora of positions available in California, Colorado, Wyoming, and even Alaska, there’s just a single opening in Hawaii at the moment. Having it all is still a premium.

Education Transformation

For elders who feel called to contribute to the common good, volunteer opportunities abound, especially as they concern younger generations. Since this may be their grandchildren, seniors may be particularly interested (just as many Snake People are designing devices and healthcare apps to assist their aging grandparents.)

Founded the same year as CoolWorks (1995), Experience Corps teams volunteer retirees with schools, where they assist in classrooms or after-school programs, tutor kids in math or reading, and dispense an ample dose of the “grandparent love” children crave. Even the most accomplished adults find the program infinitely satisfying.

Says Alice Kirk, in her second year as a school volunteer, “I started law school at 47, finished at 50, and passed the bar the first time. This is more rewarding than that. This is my opportunity to give back. I don’t know how I could quit.”

The average age of a volunteer is 65, and no prior teaching experience is required. Life experience is what matters. And your HECM clients have it in spades — and hearts.

You’re 55+. Now What?

Premier Reverse Closings
A century ago, most people passed away soon after they retired. Life spans were decades shorter than they are today, and people literally worked right up until the day they died.

Today, when a retiree at age 65 can expect to live an additional generation or more beyond retirement, many older adults are embarking on encore careers or transitioning into satisfying volunteer activities. But retirement itself begs the larger question: how do we do it?

How to Live in Retirement

Parents prepare us to enter primary school, often getting us accustomed to being away from home in nursery school or a daycare setting. Then college prepares us (more or less) to enter the workforce.

But while there are financial planning and retirement planning experts, such as reverse mortgage professionals, who focus on the practical aspects of having enough money to live on in retirement, no one teaches older adults how to be retired, maintains Joseph Coughlin, founder of MIT’s AgeLab and author of The Longevity Economy.

He writes, “Retirement is perhaps the largest purchase you will ever make. And it is a purchase.” This makes sense: we “buy into” every other age and life stage. “Retirement clients need a new engagement experience in order to suspend many of the wants of today for the sake of planning, let alone saving, for tomorrow.”

55-signThe Good Life, Redux

We see the signs by gated or nicely landscaped entrances: “Active 55+ Community”, and maybe we’re curious…what is life like on the inside? The blog for a leading developer of US retirement communities posted an interesting piece last month: Can Retirement Communities Make You Happy?

I expected to read some wisdom akin to what Coughlin discusses, but the post focused on healthy activities (tennis, walking, bocce, golf…), living in a home that accommodates aging in place (ranch-style), and amenities such as security, and medical services nearby.

Granted, these are all essential features of optimal retirement living, and no doubt contribute to happiness. But are such superficial features sufficient to define retirement living? As one 50-something business professional I spoke with about this topic opined, “How much golf can you play?”

Finishing Well

Our later years can be an opportunity to dive deeper into meaning, if we’ve not done so earlier in life: what has my life been about? Have I fulfilled my purpose? Could I now mentor others?

This what we explored in posts on retiring right, and shifting “from aging to sage-ing”, as wisdom teacher Rabbi Zalman Schacter-Shalomi describes creating a highly positive old age suffused with purpose.

He says, “[Retirees] may consider going back to work, but for many elderly people that would be neglecting what they most need to do, which is to harvest their lives. Anything that takes one away from that task leads to depression; anything that will further that task brings elation: ‘Ah, that’s what I need to do right now!’

“Part of the harvesting process involves letting go of old grudges, doing one’s energy budget and figuring out how much life energy is tied up in not forgiving.

“This is all part of what I call ‘life repair,’ which also includes paying attention to intergenerational relationships and finding the pearls in anxious memories.”

HECM and Higher Purpose

While it may sound a trifle unusual, using one’s home equity to power a purposeful retirement could hold appeal to elders who are ready to explore meaning and generativity (guiding future generations) in their later years.

It’s not only a smart investment strategy; this idea might be particularly relevant for Boomers, many of whom came of age during the height of the personal growth era. If they deferred this focus while building a career and raising a family, retirement could be the calling card to turn inward and be of service to younger generations.

And if a high-powered senior eschews both retirement and exploring higher purpose? The workforce will welcome them back with gratitude and open arms, says this New York Times piece on unretirement and senior work fulfillment. Either way, it’s a win.

 

Meeting Before Age 62


ePath 100K RM leads

How some are surviving or thriving in a down HECM market

“It’s tough to make predictions, especially about the future”, said baseball great Yogi Berra. Prognostications as how the reverse mortgage industry will recover and grow are often fall flat. An Industry initiative called “The Extreme Summit” set their sights high aiming to increase annual HECM endorsements from 50,000 to 300,000 units by 2018.  The group was comprised of several industry CEO’s, many who in a secret ballot committed to financially back the effort investing $30-150 million over five years. While this was a laudable goal the initiative could never anticipate the headwinds that would soon befall the industry. Despite these challenges one wind of change blows at our backs and could help increase adoption of the Home Equity Conversion Mortgage in the years to come.

Last Thursday USA Today reported that more seniors 75 and older are carrying debt into retirement. This is a far cry from the borrowers many of us met with a decade ago who typically had few if any debts, yet found themselves house-rich and cash-poor. “We’ve seen instances of seniors foregoing required medications … because they can’t afford it,” said Lori Lucas, president and CEO of the Employee Benefit Research Institute. “More seniors are carrying debt into retirement than ever before.” While lower than their younger counterparts, the median debt carried by those 75 and older is $20,900.  The Employee Benefit Research Institute reports that nearly half of retirees in this group have outstanding loans. The most significant increases of those carrying debt are among the lower-income seniors.

This trend comes as no surprise as our oldest Americans find themselves squeezed between the forces of…

Download the video transcript here
reverse mortgage news