February 27, 2018
Geriatric Help Eases Family Discord
Family harmony and your parent’s desires are the top priorities during their final years of life – not long-simmering sibling arguments or what you may feel is best for him or her.
That’s why it’s critical for the entire family to gather around parents for caring and gentle conversations before a crisis occurs, such as a medical emergency or sudden cognitive decline.
Jennifer B. Warkentin
“These are the kinds of conversations that need to happen while a parent is still able to discuss the options and make their wishes clear,” said Jennifer B. Warkentin, a clinical psychologist specializing in geriatric care.
Numerous conversations will actually be required to sort out myriad potential needs as a parent continues to age. The issues are both simple and complicated, from contacting Meals on Wheels and installing a shower chair to putting parents’ financial affairs in order, finding a suitable home health aide, and preparing legal documents.
Some parents are eager to have this conversation so they can get things squared away. More often, however, the conversations are tricky, because they make parents uncomfortable with a perceived “role reversal,” said Warkentin, who works primarily with elderly people in skilled nursing facilities in Boston’s western suburbs. She also has clients in independent and assisted living facilities. …Learn More
January 9, 2018
Burdensome Rents are “the New Normal”
During Boston’s mayoral election in November, Mayor Marty Walsh boasted that his administration has overseen $100 million in housing investment. Walsh’s challenger, City Councilor Tito Jackson, responded that this new investment has been dominated by the luxury apartments and condominiums sprouting downtown and around GE’s new headquarters in the booming Seaport neighborhood.
Walsh retained his seat, but Boston’s housing debate is playing out from Orlando to Austin to San Francisco.
“The lack of affordable rental housing is a consequence of not only increases in the number of lower-income households but also steeply rising development costs,” Harvard University’s Joint Center for Housing Studies concluded in its annual report on the nation’s housing stock.
An unprecedented 1 million new renters have come into the market annually since 2010, the center said, fueled by well-heeled older couples and young professional couples with children pouring into luxury apartments and the single-family homes that are on the rental market.
Building has slowed more recently, but not before strong demand had driven up the typical U.S. apartment rent by 27 percent, to $1,480, between 2011 and 2016. And $1,100-plus apartments leaped from one-third of the rental market to two-thirds; all rents were adjusted for inflation.
A decline in available apartments renting for under $850 are depriving working-class families of options. “[O]nce-affordable units have become out of reach for lower-income households,” the report said. …Learn More
December 19, 2017
No Longer Homeless at Christmas
A social worker hands Lenny Higginbottom, 52, the keys to a 378-square-foot apartment, the first home of his own after 24 years on the streets.
“Try to fight the tears,” he says, gripping the keys during a video accompanying a story by Boston public radio (WBUR) reporter Lynn Jolicoeur. “Something I thought I’d never be able to do,” Higginbottom says.
His past issues are not uncommon among the homeless: a father who died when he was six, depression, substance abuse, and a failed marriage. He had a Section 8 housing voucher but couldn’t find a landlord willing to rent to him due to minor criminal activity in his past. …Learn More
November 30, 2017
Boomers’ Mortgage Debt Predicament
You’re not going to like this, baby boomers.
You have more debt than the two generations born during the early Depression and World War II, much of it compliments of the mortgage bubble that financed your larger, more expensive houses. The housing bubble popped in 2008, but the mortgage on the new house or perhaps a second mortgage continues to plague many.
It should be no big surprise that a new study finds the “substantial” debts taken on specifically by those born in the late 1940s and early 1950s will gobble up more of their not-always plentiful retirement income.
“The evidence clearly shows that many Americans” on the cusp of retiring “continue to be burdened by debt and to be financially vulnerable,” the researchers said.
The lead researcher, Annamaria Lusardi at the George Washington University School of Business, is a national expert in financial literacy. As part of her study, she also wanted to understand how these early boomers manage their debts. It turns out that people overburdened with debt more often have lower levels of financial literacy. However, debt is also an issue among older workers in poorer health or those who’ve seen their incomes decline, which is fairly common over 50. …Learn More
September 19, 2017
Unaware and in Need of Flood Insurance
West Houston homeowner Mary Sit surveys flooding in her neighborhood caused by a release of dam water several days after Hurricane Harvey made landfall. Photo credit goes to Amy Sit Duvall
Millions of U.S. homeowners may not realize they’re at risk of flooding, due to outdated flood plain maps and even less information about dam and levee “failure zones” and urban storm-water hazards like the river running through downtown Miami during Hurricane Irma.
Hurricanes and floods tend to be low-probability events with enormous consequences. When they slam our coasts and waterways, they randomly take aim at one of middle-America’s largest financial assets: their houses. Double-barreled hurricanes in Texas and Florida over the past month underscore just how vulnerable this asset can be to storm surges and the unpredictable effects of climate change.
“Someone on the coast of New Jersey or New York says their home is part of my retirement plan. It’s worth $400,000” – or so they think, said Larry Larson, senior policy adviser for the Association of State Flood Plain Managers in Wisconsin.
“What we’re going to see happening, especially in Florida in areas very close to the ocean, is that with the sea level rise, the value of these structures are probably going to go down 30 percent,” he predicted. The Northeast is also at risk, as Hurricane Sandy reminded homeowners in 2012.
A lack of accurate information about flooding is an issue for people who want to properly insure themselves. For example, the flood plain maps compiled by the Federal Emergency Management Association cover only about one-third of the 3.5 million miles of waterfront property located in low-lying flood plains, according to a study by the Association of Flood Plain Managers.
Most oceanfront property has been mapped, but the crux of the problem is that FEMA can’t keep up with rapid urban sprawl, said Chad Berginnis, the association’s executive director. “Today’s cow pastures and corn fields are tomorrow’s residential subdivisions and commercial growth areas,” said Berginnis, a former flood plain manager in rural Ohio.
Further, some sections of Houston that flooded, post-Harvey, when water was released from local dams are not mapped as areas where FEMA requires flood insurance. In northern California, thousands of homeowners around Lake Oroville were unaware they were in a failure zone until they were evacuated last winter for a dam-water release.
Larson sees homeowners make three major mistakes: no or inadequate flood insurance, no contents insurance, and no replacement coverage. …Learn More
September 14, 2017
Moving? Check the State Taxes First
New Jersey’s retirement income exclusion for couples leaped from $20,000 to $100,000 in 2016. Minnesota and South Carolina now have income tax deductions for retired military. And Rhode Island started exempting the first $15,000 of retirees’ income from the state’s income tax.
State taxes are one piece of the financial puzzle to consider when retirees – or Millennials – are thinking about moving to reduce their living costs, find a job or friendlier climate, or be close to the grandchildren.
The Retirement Living Information Center recently compiled a nice summary of tax rates for all 50 states on its website. The information comes from sources like the Federation of Tax Administrators, The Tax Foundation and the National Conference of State Legislatures.
State taxes vary dramatically. Alaska, Florida, and Texas are among the states boasting no personal income taxes, though some offset this with relatively high property or sales taxes. A few states – yes, Alaska again – have no sales taxes. Tax deductions and exemptions for retirement income are the norm, but they vary widely from one state to the next.
Full disclosure: the Retirement Living Center is a company that makes money by referring retirees to senior communities listed on its website or by arranging residents’ reviews of these communities. But the state tax website is free and publicly available.Learn More
August 3, 2017
Reverse Mortgage: Yes or No?
The older people who either consider a reverse mortgage or actually get one don’t have much else to fall back on. Their primary assets – outside of their homes – are a car worth no more than $7,000 and about $2,000 in a checking account.
This was one salient fact unearthed about reverse mortgage users – or people who’ve looked into them – in a 2014-2015 survey led by Stephanie Moulton at Ohio State University. This supports a later study by Moulton that found that people who take out the loans tend to be in worse shape financially than other homeowners. The survey provides a more complete picture of who is turning to reverse mortgages – and why other people find alternatives to solve their financial issues.
Federally insured reverse mortgages, known as Home Equity Conversion Mortgages, or HECMs, allow homeowners over age 62 to borrow against their often-substantial home equity. These loans do not have to be paid back until the older homeowners sell the house or die.
Despite these attractive financial features, reverse mortgages are not popular: fewer than 60,000 were sold in 2015. Many elderly homeowners are appropriately wary of a complex financial product. The fees and interest rates are also higher than on a standard mortgage. But the idea behind HECMs is to allow cash-strapped seniors either to pay off their existing mortgages, eliminating house payments, or to create a readily accessible pool of cash or a new source of monthly income. Either way, they free up money that retirees can use to meet their expenses, emergencies, or medical bills.
The researchers interviewed some 1,800 older households after they had received the counseling required under federal law to apply for a HECM reverse mortgage. About two-thirds of those counseled proceeded with the loans, and one-third decided against it. Here’s what these two groups look like: …Learn More