Living Longer - on less....

I recently consulted with a client, Matt, age 75. He lives in a quiet neighborhood near the lake. He had a variety of jobs since he was 16. None had any pension plans or 401K plans. He lived frugally, rarely took vacations, never purchased a brand new car. He and his wife saved regularly. But things changed when his wife passed away a few years ago, and their fixed income dropped significantly. He started dipping into his savings. And he went out and got a part-time job delivering auto parts at $8.75 an hour, starting at 7 AM.

According to 2010 Census data, the share of workers age 65 and older increased rose to 16 percent, up from 12 percent in 1990. As one senior who was surveyed said "It's just getting a lot more expensive to be old than it used to be."

Matt uses the six hundred dollars a month he clears each month to help pay for medications, and keep a handle on the credit card debt he amassed. As long as he keeps working, he won't have to touch his savings (estimated to be $18,000). His Social Security benefit is $1400 a month. He hopes his car will "last a bit longer". As I left his home, I thought about my mom, now 87, who depends on regular support from my sister and I just for essentials. Emergencies are paid for as they arise. There is no way she can stretch her $905 social security benefit any further.

A startling statistic comes from the American Association of Retired Persons - 34 percent of older Americans use credit cards to pay for basic living expenses, including groceries and utilities. Even debt for those aged 75 and older has increased according to the Employee Benefit Research Institute.

Folks search for options to getting part-time jobs. Some, like my mom, depend on family members. Yet I still have three in college. I'm blessed that I have the resources to help. For those still in the work force, one option is to not retire and begin drawing social security benefits at right away. Benefits can be seventy percent higher if they can wait to age seventy - if they can wait.

Another enemy is the low short-term interest rate environment. Institutions pay an anemic yield, not even close to the CPI (about 1.4%). But the CPI for retirees is double that (medicines, medical services, products for seniors).

Despite the recent stock market bull-run, many retirees' accounts are back to where they were a decade ago. In the meantime they have been drawing down assets, while maintaining the same life style.

One option for seniors is a reverse mortgage, efficiently using home equity to preserve the quality of life in retirement. For my friend Matt, he realized he could receive a tax-free disbursement of $875 a month. He quit his job a month after he closed on the loan. Many seniors call their home their "nest egg". They can access that nest egg by selling their home and downsizing, refinancing and cashing out with a monthly payment (something they do not want), or refinancing and cashing out without a monthly payment, with a reverse mortgage.

All these statistics and my many consultations with elderly clients made me think more about my retirement, and my current style of living. This same conversation has been repeated with the financial planners I meet with as well. For those in the retirement "red zone," it is high time to think about what options they will have with the assets they have now.

For more information on how a reverse mortgage can help preserve assets and your quality of life, visit http://www.topflitereverse.com/florian

View the article on-line: http://ezinearticles.com/?We-Are-Living-Longer,-But-Will-Have-To-Do-With-Less&id=7485626

Article Source: http://EzineArticles.com/7485626