Wealth & Legal Archives

If you are having financial issues, do some research to see what your options are. Various programs and government-sponsored programs are available depending on your circumstances. Some Options if you are having Financial Issues Reverse Mortgage If you are a senior homeowner, over the age of 62 and are having financial problems, there is a program specifically for you call a Reverse Mortgage. This concept is available when you meet all of the requirements and has been very successful. Basically, you are selling the house back to the bank. If you have enough equity built up, the bank agrees to give you a set amount agreed upon by both parties. Then you get paid by the bank. If you decide to move or upon your death, the house is sold and the bank retains their portion and your heir will get any remainder. Subsidized Housing If you need an apartment and have a limited income, look into your local senior programs for subsidized housing. In most cases, your rent will be a percentage of your monthly income. It doesn't matter how much you have in your savings, as long as your monthly income from all sources is below their income threshold, you can apply and get on their waiting lists. Due to the popularity of the programs, there is usually a waiting list. These senior living apartments allow privacy while offering other amenities, such as a community room, bus service and other pluses. Money and Budgeting -Money is -something we all need but most of us never have enough for our liking. As we get older, we usually are able to reduce expenses as we have only ourselves to account for rather than a family to worry about. Debt Consolidation New loan is used to pay off higher interest rate debt, saving you money. This is typically in the form of a home equity line of credit or a reverse mortgage. Reverse mortgages can be a lifesaver for some. These are only available to people 62 and older. The money can be used to pay off an existing mortgage or to receive a monthly income, a line of credit or a lump sum. Credit ratings are not a factor in obtaining a reverse mortgage. PROS: A good choice for reducing monthly expenses and a good long term answer to paying off debt with high interest rates. CONS: If you default on a reverse mortgage the consequences can be the loss of a house, an especially serious consequence for seniors. Your house could be foreclosed on. Debt Management or Credit Counseling This consolidates credit card payments into one and a company hired by you works with your creditors to negotiate lowering interest rates. PROS: The harassment from creditors ends and you only have to make one payment a month which is easier for some to manage rather than multiple overwhelming payments. CONS: You no longer have the use of the cards. The accounts are closed and it has a negative impact on credit rating. Negotiated Settlement Services are available to work with your creditors to reduce the balance of debt you owe. The money that would normally be used to pay the creditors monthly is save in a separate account to make a future payment in one lump sum. PROS: Debt can be paid off in less than a year and the outstanding balance is reduced on average 40% - 50%. In addition, late fees and penalties are usually dismissed by the creditor. CONS: Fees usually include a monthly charge as well as other fees. The individual will still get some harassment from creditors. Bankruptcy Debts are forgiven. PROS: Debts are completely forgiven and wiped out and allows the person to start over. CONS: The bankruptcy stays on a persons credit report for 10 years. Retirement Insurance We save and put away for our retirement, purchase life insurance term life, but many of us ask ourselves how much is enough and how much should I allow myself to use without running out of money? You don't want to outlive your money. Financial planners recommend that future retirees plan for an inflation-adjusted income for life. There's no guarantee but the rule of thumb is 4-5 percent annual withdrawal is a safe percentage. The formula was determined based on a study conducted in the mid 90's. There's no guarantee but the 4 - 5 percent recommendation is an estimate based on past market performance. It is a good guideline. To get a more in-depth direction about your retirement financial planning you should see an expert. Many factors of your individual personal situation and plans will have an impact on the best plan of action for you. Do you have children? Do you want to leave them some type of inheritance? What type of portfolio or investments are you holding? Only you and your advisor can put together the best plan.