Paying Health-related Retirement Expenses, While Maintaining Financial Health, Too
Budgeting is a critical part of maintaining your retirement lifestyle — without running out of funds. But unlike budgeting during your working years, you may be faced with new or greater medical costs as you grow older. Health-related expenses are likely to consume a larger portion of your retirement budget — and you need to plan for that.
According to Fidelity, the average 65-year-old retired couple in 2021 needed about $300,000 in after-tax savings specifically for health-related costs in their post-work life, even with Medicare. There’s no question that medical costs in retirement are a big-ticket item — and you need a plan to pay for them.
Know your options
From in-home care to rehabilitation services, it’s important to have a plan ready for if and when the need for help arises. Many older Americans rely on:
- Long-term care insurance (LTCI). The funds can be used in a variety of ways — from assistance with daily activities to skilled care provided by medical professionals. But with LTCI, premiums increase with age. And each year after age 60, you are less likely to medically qualify for coverage.
- Traditional home equity line of credit (HELOC). This type of conventional home loan can provide the cash flow to help cover medical costs. The downside is that a HELOC requires a minimum monthly payment on anything you borrow, which can quickly derail your monthly budget.
- Reverse mortgage loan. If you’re a homeowner age 55 or older (in select states)*, a reverse mortgage loan can give you access to a new source of funds without the time-sensitive restraints of long-term care insurance, or the limitations of a conventional home loan. This financial tool lets you convert part of your home equity into cash, all while still owning your home. You can withdraw funds as a lump-sum payment, a monthly payment or a line of credit to access when you need it**. Keep in mind, you’re still obligated to meet your loan obligations, including paying your property taxes, insurance, as well as keeping up with basic home maintenance.
How much is a comfortable retirement worth to you?
The experienced loan specialists at Reverse Mortgage Funding LLC (RMF) can answer your questions and help decide if a reverse mortgage is the best financial tool to meet your needs. Reach out to RMF today at (888) 277-1567 to schedule a free consultation.
This content is sponsored by RMF, one of the nation’s leading reverse mortgage lenders. We are dedicated to helping older Americans retire more freely, in the comfort of their own homes. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating; a 4.7-star / Excellent score on Trustpilot; 4.8 out of 5 stars on LendingTree; and an A+ rating with the Better Business Bureau. Call 888-277-1567 to speak with a licensed reverse mortgage specialist to learn about our retirement financing products and solutions.
*Available to borrowers as young as 55 in select states only. Higher minimum age requirements may apply. Visit www.reversefunding.com/equity-elite for details.
**Borrowers who elect a fixed rate loan will receive a single disbursement lump sum payment. Other payment options are available only for adjustable rate mortgages.