The Gig Is Up: How Elders Can Bloom in the Freelance Marketplace



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Once upon a 1099, it was called freelancing. The newest catchphrase is “gig economy“. But however one refers to flexible, part-time, independent contractor work, it seems seniors are piloting the ship: since 1995, those aged 55-75 with a bachelor’s degree or higher have been more likely than other groups to choose alternative work arrangements. With the explosion of the aging population, this growth in self-employment has also accelerated.

Tapping till we’re tapped out?

People of every age, especially independent-minded Millennials, are less inclined to remain in a job they dislike than were previous generations. In fact, even in a climate of business uncertainty, more than two million Americans quit their jobs every month, according to the Bureau of Labor Statistics. Yet the national unemployment rate continues to drop; it was just 4.4 percent as of June 2017. Perhaps gigging has something to do with it?

The gig economy makes sense for seniors on many levels. People are tired of the tired maxims about pushing the envelope — though these days, the motto might more accurately be, “tapping till you’re tapped out”. Our sports-derived business metaphors all focus on more: go the distance, hit it out of the park, feel the burn. In a full-time job, this often means working well beyond an 8-hour day or a 40-hour week.

Consistent overtime can lead to more than a metaphorical sports injury, however. Employees who regularly attempt to knock it out of the park in the 13th inning can experience burnout, something an older adult definitely doesn’t need. But they do need money, and if they haven’t saved enough to retire without worry, trudging unhappily to work each day may seem like the only answer.

Unless they decide to gig.

reverse mortgage newsAlternatives to 9 to 5

If your reverse mortgage prospects — or their children, who may be in late middle age themselves — aren’t “feeling the burn” in a positive way (e.g., from healthy exercise), it may be time to discover how to become a just-in-time staffer, part of the agile workforce, the sharing economy. By seeking and aggregating a number of short-term, temporary assignments, someone could earn a respectable income, minus the yoke of a full-time job that’s long past its prime — even if the person gigging is well into her 70s or beyond.

Some studies estimate that by 2020, 43 percent of the American workforce will consist of independent contractors. That’s just three short years away. And it’s going to be fueled by “unretired” elders: a new breed of seniors who are continuing to work in their current professions beyond typical “retirement age” — or opting to start new careers.

One major upside of gigging for seniors? By not putting all their eggs in one basket, they eliminate the risk of being downsized out of the job they depend on — a real blow if someone has been a loyal employee, working for the same company for 20, 30 or 40 years.

There are even job sites that specialize by industry, so a senior can find their gig economy niche. Do you know a senior who’s a retired attorney? Upcounsel provides on-demand lawyers to business. Or maybe someone has been a photographer or musician, and rather than continue in these roles directly, they would like to mentor others. At Skillshare, teachers hold online classes using skills they’ve acquired throughout their life — and Skillshare experts aren’t required to have a degree. Here’s a list of 20 platforms in the gig economy.

Clearly, it’s easier than ever to market yourself and your talent, without burning the candle until you’re burned out. Since many people who leave their “regular” job in their 60s will have another 20-30 or more of years of life ahead of them, gigging may be an ideal way to supplement a HECM — and keep elders active, actively engaged, learning while earning, and enjoying creative encore careers.

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Chasing the Carrot: We Catch It In Our Late 60s



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Are you happy? It’s one of life’s perennial questions. The Declaration of Independence promises us the right to pursue happiness, but doesn’t guarantee its attainment. Instead, the Founding Fathers held out a carrot on a stick.

Money, like love and happiness, is one of life’s carrots: sometimes elusive, always sought, deliciously sweet when obtained. But if you believe happiness peaks in, say, our thirties, when we’re in our physical prime and often settled into a cushy career and family life, you’d be wrong.

According to a study conducted by the London School of Economics and Political Science, we’re happiest at 69… which is exactly three times the previous happiest age: 23. The U-shaped curve reflects unmet aspirations: just starting out, people overestimate where they’ll be later in life; post-retirement, people abandon regrets and experience the obverse of a shiny, expectant twenty-something. After age 75, happiness again declines, as people begin to grapple with encroaching mortality.

reverse mortgage news32,000 Days

Personally, I dispute the study’s findings. At 23, having surrendered the relative freedom of student life for 9 to 5, I wondered, “Is this all there is?” I felt resigned and confined, and didn’t start to feel truly happy until I began awakening to my life purpose in my late thirties. I can’t speak to 69 yet; that’s still a few years off.

But if age is less a measure of happiness than attitude and gratitude, it behooves us all to take contentment (or the lack of it) into our own hands, regardless of how many trips around the sun we’ve taken.

One statistic that may help: 8000 days. Joseph Coughlin, director of MIT’s AgeLab, says there are “roughly 8,000 days between birth and college graduation; 8,000 days between college graduation and a midlife crisis; 8,000 days between a midlife crisis and retirement and, if you do retirement planning, another 8,000 days in retirement.” That works out to 87.6 years. Just contemplating these 32,000 ticking days may be enough to jump-start the happiness clock.

A Man With a Plan

Then there’s the iconic T. Boone Pickens, still happily at work on his encore career at 89, who writes, “I’ve long thought in terms of resurgence rather than retirement. One of my longtime associates likes to say, ‘Boone has been in the prime of his life three times.’ Indeed, an imaginary headline has captivated me for years: ‘The Old Man Makes a Comeback.’ And I have, repeatedly, most recently from mini-strokes I experienced in December.

“I hope that I can serve as a role model for how to live in the fourth quarter of life. The rewards are beyond anything I experienced as a ‘young man.’ Age is meaningless in some instances. I didn’t make my first billion until I was 70. Opportunity comes in many forms, and in America it is endless. We are allowed second, third, fourth, and fifth acts — and who knows how many more.

“I’ve lived by a watch that tells time a bit differently. I embrace change. Those facing retirement age don’t need a new watch but rather a different outlet. You can stay around as long as you stay active — and, of course as I’ve mentioned time and again — you have a plan.”

The New York Times’ New Old Age blog agrees: it’s moments, not money, that make later life memorable. Of course, not having to worry about the money makes it easier to enjoy the moments, and that’s where a HECM comes in.

The Wisdom to Relax

Resurgence requires resilience, and this ability to be flexible springs from a yoga of the mind. An enduring piece of guidance that has helped millions of people of all ages is the Serenity Prayer: “Grant me the serenity to accept the things I cannot change / Courage to change the things I can / And the wisdom to know the difference.”

Happiness arises when elders are able to relax into change and allow themselves to step into new roles later in life, as Pickens and William Shatner exemplify. This may mean releasing frustrations with technology or the behavior of younger people who may be hurried — or less thoughtful than warranted.

One LO reflects, “I am finding as I get older that I am more easily frustrated with minor mishaps, and more impatient with things such as kids acting up in restaurants, and not being corrected by accompanying adults. People who are so busy looking down at their phones while stopped at a traffic light that they don’t go when the light changes…and because of their delay I get stuck with another light change cycle.

“My solution now is to try to ignore it and recall the Reader’s Digest article from many years ago that asked, ‘Is it worth it?'”

So if you’re meeting with youthful potential borrowers (or their kids) who are planning well as they approach retirement, you can let them know their happiest moments likely lie ahead. It doesn’t necessarily have anything to do with a reverse mortgage per se. But knowing this financial resource is available will certainly make that carrot taste sweeter.

 

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Retirees Conflicted on Home Equity

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Despite challenges many reluctant to tap equity in retirement

 

reverse mortgage newsOlder American homeowners find themselves beset by a variety of retirement landmines- exploding medical costs, uncertain markets and income security. Despite these challenges, retirees remain conflicted about tapping their home equity.

Mortgage and financial professionals are well aware that the baby boomer generation is less adverse to mortgage debt than the generation that preceded it. A recent New York Times article cites the seismic shift of how older American’s managed mortgage debt. The Federal Reserve reports that home-secured debt held by those aged 65-74 was only 18.5 percent in 1992, 32 percent in 2004 and 42 percent in 2004 as reported by the 2013. The percentage of those holding mortgage-related debt into retirement is expected to continue to rise as an estimated of 10,000 baby boomers turn 65- each day.

Despite the widespread acceptance of leveraging debt among boomers, retirees financial needs and uncertainty about tapping into home equity remain. The conflict between the need to fund aging in place and tapping into home equity through a mortgage is addressed in Jamie Hopkins recent column in Forbes.

“American retirees are facing a laundry list of retirement challenges. The only certainty is that

Misspent Money, Scams, Personal Stories & More

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The roundup of weekly HECM news

 

What do strippers, casinos, and groceries have in common? It’s bad enough to be forced to foot the bill of your own company’s audit and financial monitoring. Reverse mortgage servicer Ocwen Financial paid over $44 million dollars to cover the costs of monitoring services to Fidelity Information Services as part of their agreement with the state of California for its investigation of claims that Ocwen did not produce the required paperwork related to the state’s Homeowners Bill of Rights. The servicer alleges the auditor burned through the budgeted money allocated for a two year period in just 11 months, paying for strip clubs, casinos, liquor, and groceries. They also claim that FIS auditors watched videos on company time, left without clocking out, and inflated daily hours worked and mileage expenses. F.I.S. flatly denies the allegations. The auditing firm’s contract was terminated by the court under a new consent order.

download-1Fraud comes in all shapes and sizes and it wasn’t from a loan officer or financial professional. Court papers allege a Chicago contractor, Mark Diamond, of scamming more than $10 million in a repair scheme that targeted older homeowners . In all there are an alleged 122 victims- most women, African-American and in their 80’s.

Phased Retirement — Scaling That Hill With Ease

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Closing the Gap / Part 1

Is there a “generation gap” between today’s seniors and younger people, whether Boomers (many of whom are now seniors), Gen Xers, or Millennials? As we explored in Warfare or Welfare?, the answer in the workplace is “no”: just as kids and grandparents are a natural fit, younger employees enjoy learning from mature mentors, who act as a company’s living archive.

retirement_ageAnd in today’s economy, businesses want to keep elder workers and their decades of accumulated business acumen on the job a little longer. They’ve evolved a way to do so that serves everyone involved. It’s known as phased retirement, which could dovetail nicely with seniors postponing their reverse mortgage application for a few years.

Winding Down with Grace

In phased retirement, someone who is ready to reduce their workload but not quite ready to quit cold turkey lightens their schedule, so they still generate an income, but at a less intense pace than previously. It’s a win for everyone: companies keep the skilled employee as a team member a little longer, the experienced worker is available to mentor younger staff, and the gradual reduction allows him or her to ease into retirement, rather than going from full-time to no time in one fell swoop, which can be very disorienting to people accustomed to defining themselves by their job.

In fact, with 10,000 Boomers turning 65 daily, “businesses are scrambling to find ways to slow an exodus of the most experienced employees and ensure that they pass along their knowledge before they leave,” notes Bloomberg Businessweek. “Fourteen percent of U.S. companies offered either a formal or informal phased retirement program in 2016, up from 10 percent in 2012, according to the Society for Human Resource Management.”

Refining and Redefining Retirement

A recent survey found that among pre-retirees age 50 and up, just over a third (35%) want to continue to work part-time in retirement, often in exciting new careers. Another third envision cycling between work and leisure, five percent wanted to continue working full time, and only 28 percent said they never want to work for pay again — though this doesn’t rule out volunteering, sitting on advisory boards, or similar unpaid opportunities.

Older workers want to stay engaged and keep working, but in new ways, affirms Paul Irving, chairman of the Milken Institute Center for the Future of Aging. And for some businesses, such as skilled trades, retaining these older employees is essential. Steelcase, for example, manufactures more than 5,000 desks, tables, and file cabinets a day. The company has an apprentice program for Millennials, but a shortage of Gen X workers. One manager reports, “We’ve got a big gap in the middle, so we have to keep talented people in their sixties a little longer.”

Clearly, when it comes to the workplace, the generation gap has been reimagined as an inclusive arrangement that works for all. Beyond income, however, one of the greatest reasons for remaining employed later in life is a sense of purpose.

We’ll focus on the role of purpose and connection in seniors’ lives next week, in Closing the Gap/Part 2.

It’s Time to Hedge Against Inflation

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Using a Standby Reverse as an Inflation Hedge

reverse mortgage newsAfter several years of artificially low interest rates the Federal Reserve is beginning to raise interest rates – incrementally albeit. With home values still modestly appreciating across the country and interest rates beginning to rise, is now the window of opportunity for homeowners to hedge against inflation?

The Fed may tighten the money supply as fears of inflation begin to rise. In the wake of the Great Recession, many feared that prices for good would fall. However, that fear may be put to rest and replaced with another – inflation. A recent CNBC article states that a .6% jump in the Consumer Price Index (CPI) in January, pushed the annual inflation rate to a five-year high of 2.5 percent.

Rising prices will put more pressure on older homeowners on a fixed income as the cost of goods and services increase. Rising interest rates will increase the cost of borrowing and also reduce the cash benefit that reverse mortgage borrowers can obtain. In this uncertain economic landscape some homeowners could benefit by leveraging a HECM line of credit as a hedge against inflation, states a recent article in the Wall Street Journal. Older homeowners may want to revisit the ‘wait and see’ approach to getting a reverse mortgage, and rather choose to secure the loan at a younger age.

Download the video transcript here.

This Treehouse Isn’t Just for Kids!



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The Housing Shift: Part 2

One of the truly exciting aspects of aging in community today is the ingenuity behind some of the communities being developed. For instance, while senior living options such as Avanti offer an onsite program that encourages residents and kids to mingle and expand one another’s worldview, Treehouse catapults intergenerational living into a unique, visionary direction. 

reverse mortgage newsThe first such mission-driven community, now a decade old, opened in western Massachusetts to support families who are fostering and adopting children from the public foster care system. Offering affordable rentals as well as homes for purchase (good news for HECM loan originators), the community was carefully designed to ensure families and seniors are interspersed around Treehouse Circle, with the Community Center serving as a central gathering space. This inventive model has been so successful it’s now being replicated in California.

Resident Mary Steele, 82, who raised her own granddaughter from age 10, says living at Treehouse “gives me a sense of belonging and satisfaction. Parents need as much support as the kids. This place is ideal because I can continue to make a contribution. I also didn’t want to live with people all the same age.”

Needing to Be Needed

Creative communities such as Treehouse address the deeper issue around senior housing: being of use. It’s crucial to survive and thrive at any age, the more so as we move into elderhood. In a recent New York Times Op-Ed, the Dalai Lama writes, “In one shocking experiment, researchers found that senior citizens who didn’t feel useful to others were nearly three times as likely to die prematurely as those who did feel useful. This speaks to a broader human truth: We all need to be needed… Selflessness and joy are intertwined. The more we are one with the rest of humanity, the better we feel.

“We should start each day by consciously asking ourselves, ‘What can I do today to appreciate the gifts that others offer me?’ We need to make sure that global brotherhood and oneness with others are not just abstract ideas that we profess, but personal commitments that we mindfully put into practice.

“Each of us has the responsibility to make this a habit. But those in positions of responsibility have a special opportunity to expand inclusion and build societies that truly need everyone.”

Designing With Aging in Mind

Visionary city planners worldwide are rethinking how to make cities more livable and navigable for residents as they grow older. Intergenerational, sustainable communities are cropping up around the globe, from Kanazawa in Japan to Miss Sargfabrik in Austria. But as expected, the cost of change (and housing) isn’t cheap: homes in Atlanta’s evolving Mado community range from $300,000 to $1 million, though low-income housing options are in the planning stage.

Yet getting around cities with challenging terrain, such as hilly San Francisco, can be difficult as residents age. Bay Area nonprofit Institute on Aging brokered a three-way partnership with ride service leader Lyft and Whistlestop, a senior shuttle-van service, to provide more extensive, wheelchair accessible service to seniors.

“The story needs to be, what can we do to keep people living independently,” says Stephen Johnston, co-founder of Aging2.0. “We need to do a better job of incorporating older people into our lives.”

“Towns are frightened by density,” says Michael Glynn, vice president with National Development in Boston, who has built walkable communities primarily for older homeowners. “But if you build in the right, walkable location, it could do a lot of good for an 85-year-old.”

An Argument for HECMs as a Last Resort

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Financial Columnist Argues When a HECM Should be a ‘Last Resort’

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Dirk Cotton

For decades the federally-insured reverse mortgage, or HECM, has been generally viewed as a ‘loan of last resort’ by both the media and the financial planning community at large. In recent years, our industry has made notable inroads with financial professionals who have begun to embrace the strategic use of a reverse mortgage in retirement income planning. However, one financial columnist says there are many situations in which the using the reverse mortgage as a last resort is the best resort.

Dirk Cotton’s blog “The Retirement Cafe” is a blog which is self-described as “retirement planning for the unwealthy”. In his most recent column “Reverse Mortgages: When the Last Resort is the Best Resort”, Cotton provides an interesting counter-argument to those who have widely embraced the strategic use of a HECM sooner than later stating, “I believe there are many retirement scenarios in which spending home equity as the last resort is the best resort”. His position stands in stark contrast to the position widely embraced within our industry as first published in the paper “Reversing the Conventional Wisdom: Using Home Equity to Supplement Retirement Income (2012)”, by Barry Sachs and Stephen Sachs.

Download a transcript of this episode here.

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

Huff Post: HECMs Can Save Retirement



One Seasoned Financial Advisor Says HECM Can Save Retirement

Home-equ-unlockedThe reverse mortgage industry continues to push against the headwinds of dwindling loan volume and increased regulation, yet there remains a silver lining: increased acceptance in the financial planning community. Robert Mauterstock is just such an advisor. With 35 years experience as a financial advisor Mauterstock recently penned a column in the Huffington Post outlining both the benefits of the HECM and the reasons behind his change of heart.

If you’ve been putting off reaching out to financial professionals in your city, then procrastinate no longer. Mauterstock did not recommend reverse mortgages until he met with a knowledgeable reverse mortgage professional. “…recently I met with Bob Tranchell, a senior VP at the Federal Savings Bank. He explained to me…

Download a transcript of this episode here.

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

Change & Be Happy

Be Happy with Change


Older Americans Month takes place in May: a season of bright beginnings when the country is in bloom. It’s a terrific time for elders to emerge from hibernation into imagine-nation, and step up to being the person they most want to be (and who their dog already knows they are).

Last week we talked about some ways to ease the transition into retirement. The greatest asset to such life transitions is a sense of ease with change. One loan officer with a glass full (not half full) mindset offers, “I happened to see the Dr. Oz TV show with William Shatner (of Star Trek fame) as one of his guests. I was impressed with the positive attitude Shatner exudes and how it has affected his personal happiness and longevity.”

Indeed. After his long acting career, Shatner reinvented himself in his sixties as a musician, author, director, and celebrity pitchman. He also breeds and shows horses, and is active in a number of charities. He is 85 years old.

While this may be a more ambitious retirement than many would choose, it points up the possibilities. And it wasn’t a straight ascent: even after fame, Shatner suffered a reversal of fortune, at one point living in his truck bed camper.
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Happiness Is A Choice

Optimism. It’s something we must choose on a daily basis. Perhaps the simplest way might be to accept change as a fact of life, and embrace Bobby McFerrin’s musical advice: “Don’t Worry, Be Happy”, or the more recent Happy by Pharrell Williams, which boasts close to a billion YouTube views. Clearly, everybody wants happiness, regardless of age.

A LinkedIn member recently shared this brief, touching story of an 86-year-old gentleman who creates his happiness by bolding going where few have gone before, asking total strangers to have a cup of coffee. Talk about a zest for life!

This is another strategy to share with your reverse mortgage clients, and other seasoned adults you know: step out of your comfort zone and expand into something new. Most of us wouldn’t consider walking up to someone we don’t know and asking for their time, but it has created meaningful experiences for the man described above.

Muhammad Ali is purported to have said: “The man who views the world at 50 the same as he did at 20 has wasted 30 years of his life.” It behooves each of us to be open to/willing to change.

Hopefully, we learn from our life experience as we age and gain some wisdom, which we can then use to develop different goals and life paths later on. Change is life’s only constant; embracing it leads to a life-long love affair.