Through 2030, Baby Boomers are expected to be retiring at a rate of nearly 10,000 per day. In addition to spending on golfing, traveling and spoiling grandchildren, senior citizens on will need to set aside $130,000 on average in health care expenses – a nearly unattainable goal for the 59 percent of retirees who will rely on Social Security as their primary source of income.
Fidelity Investment's annual report on senior health care expenses anticipates that the sum of Medicare premiums, prescription drugs, co-payments and eyeglasses will total $125,000 for men and $135,000 for women in their post-working years.
As a result, what was once a niche of the mortgage market is now gaining in popularity. Reverse mortgages are being utilized as a way to fund longevity. Designed for seniors 62 or older, reverse mortgages convert the equity in a home into cash, eliminating monthly mortgage payments and can provide proceeds in the form of a lump-sum, monthly payments or line of credit.
Today, conventional conforming no-point 30-year fixed rates averaging 3.375 percent while the 15-year rate is near 2.625 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.