It’s no secret that inflationary pressures are having an impact on everyday life. With rising prices for utilities, gas and household items, people are feeling the pinch.
For individuals with fixed incomes, especially seniors, getting by day by day has become a heavier burden on their household budgets during this time of inflationary growth.
About 56 million individuals over age 65 are feeling the squeeze and face the prospect of living in poverty, which is likelier among those in this age group, according to the U.S. Census Bureau. About 9.5% of folks over age 65 are already below the poverty line and the situation could get worse.
The sudden arrival of inflation levels, which have not been seen in more than four decades, is revealing the fragility of economic inequalities across the country. In addition, individuals more likely to face these economic pains are also more likely to fall ill during the pandemic.
Data show that about half of the nation’s older population has a budget of about $30,000 each year. For many, that’s barely enough to cover living costs, according to Elder Index.
Any small change to the cost of living can have devastating effects on vulnerable and budget-constrained populations. Today, they’re facing steeper prices for food, gas, utilities and housing. Unfortunately, any small change, or medical situation, can completely throw off their budgets.
There’s been some relief, however. Social Security recipients, for instance, received a modest per-month increase to their income. While Social Security accounts for cost-of-living adjustments, it can take some time for the additional funding to catch up. So any short-term price hike can cause an abrupt budget imbalance.
In a recent survey of retirees, participants noted that the sudden price increases forced them to make immediate budget cuts. Some folks are cutting back on meat and vegetables, skipping on gym memberships or driving less. Little by little, people are seeing a decline in their financial and overall wellness.
Despite some of the government’s relief efforts during the pandemic, not enough resources, like unemployment benefits or tax credits, reached older individuals. This lack of relief certainly didn’t help matters.
Online shopping is another factor. Here’s why: Seniors rely on online shopping far less than younger consumers. Goods are generally less expensive online, with a recent survey indicating online prices increasing by 3.6%, compared to a nearly 8% to the overall consumer price index.
During this uncertain time, retirees are turning to a home equity conversion loan for some financial relief. According to GreenPath Financial Wellness, interest in home equity mortgages is quickly on the rise.
As a new retiree, you can enjoy an immediate boost to your buying power and retain liquidity in your home through a home equity conversion loan.
Typically, this loan program requires a 50% commitment and in return, borrowers stop monthly payments on their home. This feature can be particularly useful to retirees who love where they live and its low cost of living.
To learn more about this opportunity to boost your income, eliminate monthly mortgage payments and to make the most of your life’s next phase, please contact us today.
*(1) at the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; (2) charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; (3) the loan balance grows over time and interest is charged on the outstanding balance; (4) the borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; and (5) interest on a reverse mortgage is not tax deductible until the borrower makes partial or full repayment. This material is not from HUD or FHA and has not been approved by HUD or any government agency.