The Center for Economic and Policy Research extrapolated from data from the 2004 Survey of Consumer Finance to project household wealth under three alternative scenarios. The first scenario assumes that real house prices fall no further than their level as of March 2008. The second scenario assumes that real house prices fall an additional 10 percent as a 2009 average. The third scenario assumes that real house prices fall an additional 20 percent for a 2009 average.
The projections show that the vast majority of families between the ages 49-54 will have little or no wealth by 2009 in any of these scenarios and that those persons who just be approaching retirement will have very little to support them-selves in retire-ment other than their Social Security.
The projections also show that a large number of families will have little or no equity in their homes by the end of 2008. Finally, the projections show that the renters within the same wealth categories in 2004 will have more wealth in 2009 than homeowners in all three scenarios.
Seniors and their financial planners are scrambling to develop financial solutions and strategies. You should consider two obvious strategies. First, if you have debt on your home, you should eliminate it quickly. If you need a referral to an agent that will show you how you can within a few years eliminate your mortgage debt without bankruptcy, debt consolidation, or adversely affecting your credit rating, please call the office at 877-816-8670.
If your are likely to need a reverse mortgage in the future, you might consider obtaining a reverse mortgage line of credit now, before the value of your real property is further mpaired. A line of credit does not obligate that you access the funds, but the funds wll be available for the reminder of your life, if you later need them. Moreover, you ensure access to a greater amount, or at least some amount, whereas later, after the value of your home is further reduced by the market, you may not be eligible at all, or eligible for as much.
If you need a referral to a reputable reverse mortgage specialist or financial planner, please call the office at 877-816-8670.
Published July 1, 2008 in the Aging in Place Planning and Elderlaw Blog. This article is general information, not legal advice; see our disclaimer.