It’s helping people live healthier, live longer, and “age in place”—but where will the money come from?
America is undergoing a transformation. By 2030, for the first time in United States history, there will be more people aged 65 and older in America than 18 and younger.1 This is partly due to the aging of the Baby Boomer generation, but there are other factors at work here, as well.
Modern medicine has nearly doubled the expected lifespan in the past century. As recently as 2015, there were nearly half a million people over the age of 100 in the world—more than four times as many as in 1990, according to United Nations estimates. Projections suggest the number will skyrocket to 3.7 million by 2050.2
And medicine isn’t the only field that’s helping shape the lives of people approaching, or already in, retirement. Modern technology has also contributed to people living better and longer—and contrary to what some may think, older adults are adopting technology more and more. In fact, an AARP survey seems to indicate that adoption of technology among older adults is increasing at a healthy pace.3
Perhaps this shouldn’t be that surprising, because in a separate AARP survey, 76% of adults aged 50 and older said they would prefer to “age in place”4: remain living in their current homes as long as possible. And today, technology can help them meet this goal in many different ways.
“Telehealth” services that allow you to receive services virtually over the internet, such as doctor’s appointments, can make it easier to get the care and advice you need from home. In addition, relatively affordable digital solutions for seniors, such as health sensors and wearable emergency alert buttons, can literally be lifesavers for older adults living at home.
In another AARP study, 45% of adults 50 and older said they were more motivated to live a healthier lifestyle after six weeks using a wearable activity or sleep tracker.5 Two-thirds of the study participants felt that wearing these devices was beneficial to living a healthy lifestyle.
There’s evidence that indicates social media technology can help older adults overcome loneliness and isolation—and feel connected to friends, families, and communities while staying at home. In fact, 51% of older adults reported using social media more often.6 And research conducted by Penn State University found that adults age 65 and older make up the fastest-growing demographic on Facebook.
And it seems to be working: according to the American Psychological Association, a study of nearly 600 older adults found that social technology use was linked to lower levels of loneliness, better health as self-rated, and fewer chronic illnesses and depressive symptoms.7
While seniors grew up in an era where trips to the bank were part of everyday life, most are aware of—and many use—today’s modern technology that allows you to do all of your banking online and access your wealth without leaving the comfort of home.
In addition, there’s an emerging industry known as Fintech, or “financial technology.” It uses digital technology to help older adults manage their personal finances and documentation. It’s intended to provide greater security, and reduce fraud and elder exploitation. Using specialized software and algorithms on electronic devices, it detects unusual spending activity.
So what does it all mean?
While this is all good news—living longer, living better, and living at home—the reality is, a longer life means more years spent in retirement. Which means seniors will need more money to fund these years. Where will it come from, so that people can avoid outliving their assets?
Fortunately, there’s good news here as well. When most people think of retirement assets, they think of savings accounts, invested assets, or retirement accounts—but in reality, many older adults have a majority of their net worth tied up in the equity in their homes. In fact, housing wealth for homeowners aged 62 and older grew by 3.98% in the final quarter of 2021, reaching a staggering record total of $10.6 trillion dollars.8 It’s a significant potential source of retirement funds, waiting to be accessed.
A reverse mortgage can help you unlock the power of home.
One way to tap into your home equity is through a reverse mortgage, officially known as a Home Equity Conversion Mortgage (HECM). It’s a loan program that’s insured by the Federal Housing Administration, specifically to help homeowners aged 62 and older generate income for retirement to help improve their cash flow.
The amount you can receive depends on your age, current interest rates, and your home’s value. The proceeds are used to pay off your current mortgage, eliminating that expense. You get the rest, as a lump sum, monthly payment, line of credit, or any combination of these.
No more monthly mortgage payments? It’s true.9
One of the major advantages of a reverse mortgage is that as long as you continue to keep up with your property taxes, homeowners insurance, and home maintenance, the loan doesn’t come due until you leave the home for good.10 No monthly mortgage payments are required—which frees up that money for you to use for other expenses.
You can use the money however you choose—but some common uses include:
• Pay bills and other everyday expenses
• Eliminate or reduce credit card balances and other debts
• Help cover the cost of health care
• Make home repairs or upgrades to help you “age in place”
• Set up a line of credit to cover unexpected expenses in the future
• Help out family members financially
Where can you learn more about whether a reverse mortgage is right for you?
You’ll want to look for a lender that’s experienced and knowledgeable in reverse mortgages and committed to the best interests of older adults. At Longbridge Financial, reverse mortgages are our only business. We can answer all your questions and let you know what to expect. And we’ll only recommend a reverse mortgage if it’s the best option for you.
As a leading reverse mortgage lender and loan servicer, we have the modern technology that gives you everything you need easily manage your loan online, with a loan summary, statements, answers to frequently asked questions, a mobile app and more.
To learn more about a reverse mortgage, fill out the form on this page to get a free info kit, or call Longbridge at 855-523-4326. There’s no cost and no obligation.
4. Source: AARP. (2019). 2018 Home and Community Preferences: A National Survey of Adults Age 18-Plus. Washington, DC.
9. Property taxes, homeowners insurance, and home maintenance required.
10. The loan balance increases over time as interest