Many seniors have enjoyed substantial appreciation in the value of their homes. The question today is: What are we going to do with the equity that has built up in our house over time?  If you think about it for just a few minutes, you will discover there are several attractive options for how an older person can take advantage of her/his cash equity in their house. For example, one option is to sell the old family homestead and move into a smaller more accessible house, apartment or rental housing in a neighborhood of your choice, and then invest the extra cash from the sale in secure investments.

 Or, if you are happy with your present house and want to stay there, another option is to apply for a federally insured reverse mortgage and use the cash to significantly increase your quality of life and ensure a more satisfying and secure old age.  The cash available from a reverse mortgage can be used to repair and renovate your house or organize and modify the several rooms where you spend the most time so they are appropriate for aging in place. Depending on your health and circumstances, you might prefer to use the extra cash to hire help around the house such as a housekeeping service, someone to care for the lawn and garden or a handyman who will repair leaky faucets, running toilets and squeaky doors.  Paying to have more fun is another option where cash from a reverse mortgage would be useful.  It is never too late to sign up for dance classes, taking a foreign language course or planning a trip with your grandchildren. The possibilities are endless, especially if you desire to maintain an interest in living a fulfilling life.

 Federally Insured Reverse Mortgages

 Most of the public is vaguely aware that a “reverse” mortgage is a loan against your existing home.  But the public is only slowly beginning to understand that a federally insured reverse mortgage is a new and very useful financial instrument for older homeowners.  With a reverse mortgage, you can turn the value of your home into cash without having to move or to repay the loan each month.  And perhaps most important, you do not have to pay back a reverse mortgage for as long as you live in the house.  The cash you obtain from a reverse mortgage can be paid to you in several ways:

·      All at once, in a single lump sum of cash

·      As a regular monthly cash advance

·      As a “line of credit” account that lets you decide when and how much of your available cash is paid to you or

·      As a combination of these payment methods.

 Federally insured reverse mortgages are available regardless of your current income or assets The amount a person can borrow depends on their age, the current interest rate, and the appraised value of their home. Generally, the more valuable your home is, the older you are, and the lower the interest, the more you can borrow. The money you receive from a reverse mortgage can be used in any way you wish:

 • To pay off bills or credit card debt

• To make home repairs

• Maintain your independence

• Travel and learn

 Some Essential Facts

 The best and most secure reverse mortgage is the Home Equity Conversion Mortgage (HECM). The Federal Housing Administration (FHA), a part of the U.S. Department of Housing and Urban Development (HUD), insures HECM loans. The FHA tells lenders how much they can lend you, based on your age and your home’s value. The HECM program limits your loan costs, and the FHA guarantees that lenders will meet their obligations. HECM loans generally provide the largest loan advances of any reverse mortgage. HECMs also give you the most choices in how the loan is paid to you, and you can use the money for any purpose. Although they can be costly, HECMs are generally less expensive than privately insured reverse mortgages. Other reverse mortgages may have smaller fees, but they generally have higher interest rates. On the whole, HECMs are likely to cost less in most cases.

 Unlike ordinary home equity loans, an FHA reverse mortgage does not require repayment as long as the home is the borrower’s principal residence. Lenders recover their principal, plus interest, when the home is sold. If any home equity remains after sale, the remaining value of the home goes to the homeowner, estate or heirs. You can never owe more than your home’s value.

 To be eligible for a FHA insured reverse mortgage :

 • You and any other current owners of your home must be aged 62 or over,and live in your home as a principal residence.

• Your home must be a single-family residence in a 1- to 4-unit dwelling, a condominium, or part of a planned unit development (PUD).

• Your home must meet HUD’s minimum property standards, but you can use the HECM to pay for repairs that may be required.

•You must discuss the program with a counselor from a HUD-approved counseling agency.

For more information, contact:

 AARP: www.aarp.org/money/revmort

U.S. Department of Housing and Urban Development:  http://www.hud.gov/buying/rvrsmort.cfm

This will be my last update on this site, as my blog will moving over to some new digs at http://blog.seniorchecked.com/

The new site will give me an opportunity to reach a larger audience and hopefully help a lot more people.  I will continue to post often, and respond to feedback.

Thanks again, hope to see you soon!

http://blog.seniorchecked.com/

Less than two months before the change from analog to direct TV is to take effect, it is unclear how elderly persons without sufficient outside resources to help them will be able to make a successful transition to digital TV.  As noted by Senator Herbert Kohl (D-WI) over a year ago, “Without proper preparation, millions of Americans may turn on their TVs on February 18, 2009 only to find themselves left in the dark without access to critical weather updates, emergency alerts, news or entertainment programming. Seniors are particularly vulnerable to slipping through the cracks of the transition. Not only are they more likely to rely on free over-the-air analog TV signals, as shown in a study by the Association of Public Television Stations, but for many seniors television is their only link to the outside world.” (Opening Statement, Senate Special Committee on Aging Hearing, September19, 2007.)

 To facilitate the successful transition to digital TV, the U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA) has funded an array of “educational” initiatives to alert and inform the general public about: 1) the transition from analog to digital TV; 2) the availability of converter boxes; and 3) how individuals can apply for up to two $40 coupons to help defray the cost of a converter box, estimated to cost between $40 – $70 at large retail electronic stores, (e.g., Wal-mart, Best Buy).  Every buyer of a converter box is expected to read the instructions and install his or her own converter box and make their TV operational.  Until several weeks ago, it has been assumed that all elderly persons, like the general public, will be able to handle the transition to digital TV successfully, relying on family, friends and neighbors for assistance when needed.  

Less than two months before the nation will switch from over-the-air analog to digital broadcasting, the National Telecommunications and Information Administration (NTIA) awarded a $2.7 million cooperative agreement to the National Association of Area Agencies on Aging (n4a) and a coalition of aging network partners including the Asociacion Nacional Pro Personas Mayores, Meals on Wheels of America, National Association of Nutrition and Aging Service Programs, National Association of State Units on Aging, National Caucus on Black Aged, National Council on Aging, National Pacific Center on Aging, and AARP.  The coalition plans to provide outreach/education and one-to-one assistance to 250,000 older persons. 

 Utilizing the aging network to communicate information and offer services to the poor and vulnerable elderly living in the community is an excellent strategy. Led by n4a, the aging network is a comprehensive system that includes 650 area agencies on aging (AAAs), 29,000 local service provider organizations and hundreds of thousands of volunteers who interact with seniors on a regular basis in communities throughout our nation.  There is no more effective coalition of national organizations with “feet on the ground” to reach out and communicate information and offer services to the vulnerable elderly in their own homes or apartments.

The only question now is:  Is it too little too late?  We should begin to see and hear the results on February 18, unless Congress extends the deadline for the transition.

It is very sad that a government initiative like the DTV transition has been handled so badly that a month before it is to take effect there is a move in Congress to postpone the date of implementation.  Added to this confusion about a starting date is the very tardy recognition by government agencies that many elderly and disabled TV users will probably lose their signals whenever the transition goes into effect.

The Digital Television (DTV) Transition and Public Safety Act of 2005 will require the nation’s TV viewers to switch from over-the-air analog to digital broadcasting beginning February 17, 2009.  An estimated 20 million households rely on antennas to receive over-the-air signals for their TVs. The Government Accountability Office (GAO) reported that of those OTA households, about 48 percent have incomes under $30,000.  Moreover, approximately 8 million – or 40% — of these households include at least one person over the age of 50.  (Source: Nielsen Media Research TV Household Estimates, 2003-2004.) 

In order to keep watching TV after the transition, consumers using analog TVs will need to: 1) buy and install a converter box; 2) buy a digital TV; or, 3) subscribe to cable or satellite service.  Without proper education and hands-on assistance throughout the conversion to digital TV, a large proportion of older adults will likely find that their televisions will not function after February 17, 2009.  Exacerbating this mandated conversion process to digital TV is the fact that many elderly persons with analog TVs have limited incomes, limited mobility/transportation resources, and/or limited physical and mental capabilities.

The costs of family caregiving to US employers are substantial – including absenteeism, tardiness, and lowered productivity. There are also health implications: family caregivers report increased strain, anxiety, fatigue and have higher medical bills.

The cost to U.S. business from the lost productivity of working caregivers is more than $33 billion per year, according to the MetLife “Caregiving Cost Study: Productivity Losses to U.S. Business.” The average caregiver costs an employer $2,110 per year. The findings in the 2006 study represent an increase of about $4 billion in both categories from 1997, when the study was first conducted.

Working family caregivers tend to make informal adjustments, such as being late to work or leaving early, making incoming and outgoing telephone calls, and writing e-mails to arrange and monitor care and take unexpected days off. Employees who are caregivers are most likely to be middle-aged and older workers who have accumulated the most expertise, skills and institutional memory, and are consequently the most expensive to replace. 

 The growth of the number of caregivers in the workforce is a trend that will not go away soon. The companies that will thrive in the future will adapt to this reality by implementing or strengthening their Human Resources policies and practices to recognize the burden of family caregiving. 

 Caring for an older family member has become a way of life for millions of working Americans. Today, it is estimated 15.6 million Americans are trying to balance employment and care giving responsibilities. Nearly half of the caregivers are employed full-time. Another 11% are employed part-time. Not surprisingly, employed caregivers are often exhausted, burdened, and stressed.

 As employers have become more aware of the employee-caregiver problem, their responses have been varied and unsystematic. The lack of a clear and well-defined corporate response to this issue is because employee-care giving is a relatively new phenomenon.  It has evolved gradually from the coalescing of three powerful but independent factors:

 • Improved medical care and prevention efforts have contributed to dramatic increases in life expectancy. The growth in the number and proportion of very old adults is unprecedented in the history of the United States. Concurrently, there has been a major shift in the leading causes of death from infectious diseases and acute illnesses to chronic diseases and degenerative illnesses.

 • The trend toward smaller and more diverse families.  Since 1970 the percentage of households containing five or more people has fallen by half. Meanwhile, the “modern family” (i.e., consisting of a breadwinner and a homemaker) is giving way to a collection of diverse, often fragile domestic arrangements that comprise the “postmodern family” — single mothers, blended families, cohabiting couples, lesbian and gay partners and two-wage earner families.

 • Growth in the proportion of “dispersed families.” It is no longer unusual for adult children to be living in a geographically different location than their parents.

 Add it all up and the result is: There are fewer family members at home to help adult children care for aging parents or relatives with chronic illness. And this employee-eldercare problem will continue to grow as an issue for employers.

A guardian is a person appointed by the court to make personal, financial and medical decisions on behalf of a person who is unable to manage his or her own affairs. Guardians for adults may be appointed for people who are unable to care for themselves by reason of mental illness, mental retardation, and those who become unable to make or communicate informed decisions because of illness or injury. However a guardian’s duties depend on the court’s order and on a state’s law.

Basic information regarding guardianship is surprisingly scarce. Nationally, no one knows how many people are under guardianship or who is serving them. And although several states have taken active steps to improve guardianship laws, few use computers to track actual cases.

Between 1 and 2 million Americans age 65 or older have been injured, exploited, or otherwise mistreated by someone on whom they depended for care or protection. (Elder Mistreatment: Abuse, Neglect and Exploitation in an Aging America. 2003. Washington, DC: National Research Council Panel to Review Risk and Prevalence of Elder Abuse and Neglect.)

To learn more about guardianship, visit the National Guardianship Association (www.guardianship.org/) or the Stop Guardian Abuse organization (www.StopGuardianAbuse.org/)

To report suspected abuse or neglect of an older person, contact your state’s Adult Protective Service.

Learning is a lifelong pursuit that opens minds, enriches lives and contributes to successful aging. Elderhostel programs provide convenient and affordable opportunities in which participants make new friends, share ideas, opinions and life experiences at the same time they are learning new skills, visiting historical areas, exploring new horizons or appreciating the art of different cultures.

For more information visit: www.elderhostel.org

Remember to exercise your mind with stimulating or challenging learning opportunities. Just as physical activity keeps your body strong, mental activity keeps your mind sharp and agile. One way to do this is to continually challenge yourself by learning and expanding your horizons. If you continue to learn and challenge yourself, your brain continues to grow, literally.

Some steps you can take to challenge your mind  include:

* Learning to play a musical instrument

* Playing Scrabble, working crossword puzzles and Sudoku

* Interacting with friends and neighbors

* Starting a new hobby, such as crafts, painting, collectibles,  bird-watching

* Learning a foreign language

* Volunteering

* Staying informed about what’s going on in the world

* Reading journals and magazines that contain serious content

In most communities colleges and universities offer some type of “Learning in Retirement” classes. Whatever they are called, Learning In Retirement (LIR) classes are a college experience without grades or tests, a place where the only prerequisites are an active mind and a desire to learn in a congenial atmosphere. Usually, the LIR classrooms are filled with dedicated students of retirement age who are learning from talented teachers or lecturers, some of whom may be retired professionals.

  

The senior marketplace includes 40 million Americans over the age of 60 with annual spending power of more than $1 trillion dollars. The rapid growth of this senior services marketplace is producing unknown numbers of unscrupulous individuals and companies whose sole purpose is to devise successful scams and schemes designed to defraud the elderly of their money.

 

Seniors are at greater risk of scams and financial exploitation because they have:

• More leisure time.

• Longer life span and earlier retirement sometimes translate into empty hours. Some older people fill their time with reading the mail and taking phone calls and visits from strangers offering “money saving deals,” “can’t miss” investment opportunities and “big cash prizes.”

• Isolation: Alone and sometimes in failing health, some seniors may respond warmly to crooks who may be the only people to call or visit them.

• Anxiety: Many seniors worry about running out of money or not having any cash to leave to their children.

• More Discretionary Income

Most Common Types of Scams and Frauds

Fraud generally involves deliberately deceiving the victim with the promise of goods, services, or other benefits that are nonexistent, unnecessary, never intended to be provided, or grossly misrepresented. There are hundreds of frauds, but offenders generally use a small subset of these against the elderly. The frauds typically occur within a few interactions.

• Prizes and sweepstakes. These frauds generally involve informing the victim that he or she could win, or has already won, a “valuable” prize or a lot of money. The victim is required to send in money to cover taxes, shipping, or processing fees. The prize may never be delivered or, if so, is usually costume jewelry or cheap electronic equipment worth less than the money paid to retrieve it.

• Investments. Because many seniors live on fixed incomes, they often want to increase the value of their estate and ensure they have sufficient funds to meet basic needs. In investment scams, offenders persuade the elderly to invest in precious gems, real estate, annuities, or stocks and bonds by promising unrealistically high rates of return. The investments often consist of fake gemstones, uninhabitable property, or shares in a nonexistent or unprofitable company.

• Charity contributions. Playing on some seniors’ desire to help others, offenders solicit donations to nonexistent charities or religious organizations, often using sweepstakes or raffles to do so.

• Home and automobile repairs. Offenders may recommend an array of fraudulent “emergency” home repairs, often requiring an advance deposit. They may subsequently fail to do any work at all, start but not finish the work, or do substandard work that requires correction. Common frauds include roof repairs, driveway resurfacing, waterproofing, and pest control. The offenders are often transient, moving among neighborhoods, cities, and even states. Dishonest auto mechanics may falsely inform customers that certain repairs are needed, or they may bill for services or repairs that were not requested or were not completed.

• Loans and mortgages. Seniors may experience cash flow shortages in the face of needed medical care or home repairs. Predatory lenders may provide loans with exorbitant interest rates, hidden fees, and repayment schedules far exceeding the elderly’s means, often at the risk of their home, which has been used as collateral.

• Health, funeral and life insurance. Many seniors are concerned about having the funds to pay for needed medical care or a proper burial, or to bequeath to loved ones upon death. Unscrupulous salespeople take advantage of these concerns by selling the elderly policies that duplicate existing coverage, do not provide the coverage promised, or are altogether bogus.

• Health remedies. The elderly often have health problems that require treatment. Preying on this vulnerability, offenders market a number of ineffective remedies, promising “miracle cures.” Unfortunately, given this false hope, many seniors delay needed treatment, and their health deteriorates further.

• Travel. Compared with younger adults, seniors often have more leisure time and are attracted to low-cost travel packages. However, many of these packages cost far more than market rates, provide substandard accommodations, or do not provide the promised services.

• Confidence games. These frauds generally do not involve a product or service; instead, they include a broad array of deceitful scenarios to get cash from the elderly. The offender may pretend to be in a position of authority (e.g., a bank examiner), or otherwise trustworthy, concocting a story to get the victim to hand over cash, then disappearing. For example, the perpetrators of “lottery scams” claim to have won the lottery but to have no bank account in which to deposit the winnings. The offender promises the victim a premium in exchange for use of his or her account. After the victim makes a “good faith” payment to the offender, the victim never hears from the offender again.

• Telemarketing. Offenders call people at home, using high-pressure tactics to solicit money for fraudulent investments, insurance policies, travel packages, charities, and sweepstakes. Fraudulent telemarketing operations are designed to limit the benefit to the customer while maximizing the profit for the telemarketer and for the highly efficient contact of a lot of potential customers.

• Mail. Fraudulent prize and sweepstakes operations often mail materials to a wide audience, relying on potential victims to “self-select” by returning a postcard or calling to indicate their interest. The mailings often look official, use extensive personalization (e.g., repeating the recipient’s name in the text), include claims of authenticity, have contradictory content or “double-talk,” and make a seemingly low-key request for the recipient to submit a small fee.

• Face-to-face contact. Some frauds involving products and services (e.g., home and auto repairs) require face-to-face contact at either the victim’s home or a business. Alternatively, a scammer gains entry to the victim’s home by posing as a utility worker and distracts the victim while an accomplice burglarizes the home.

Successful frauds share common elements. The offenders gain trust and confidence through their charisma, by using a business name similar to that of a well-established organization, or by communicating a concern for the elder’s well-being. They create the impression that the elder has been “chosen” or is “lucky” to receive the offer, and that such offers are rare. They encourage their victims to make an immediate decision or commitment to purchase products or services, which effectively limits the opportunity for consultation with others. Further, since the “special” offers are available to only a select group of customers, the offenders ask the victims to be discreet and not discuss the details, shrouding the transaction in secrecy and decreasing the chance of discovery by a family member, neighbor, or other concerned party. The frauds occur quickly, with little risk of exposure.

(Source: “Financial Crimes Against the Elderly” by Kelly Dedel Johnson

Problem-Oriented Guides for Police No. 20. U.S. Department of Justice

Office of Community Oriented Policing Services (COPS).