Not only is a home many older adults' shelter, but it may also be where they have cobbled together a lifetime of memories and financial security. But with retirement incomes failing to keep pace with living costs, many pensioners are being forced to make hard financial decisions. Fixed incomes, mounting pay-as-you-age healthcare costs and home maintenance come together in a perfect storm that endangers the stability many of us spent a lifetime to attain. This extensive guide digs deep into possible solutions and lesser known benefits that can afford elderly homeowners the ability to age in place, even during tough financial times.
1. Property Tax Relief Programs
The first bastion of financial relief is usually property tax relief programs, which differ considerably depending on where you live but can save you thousands of dollars. Most counties and municipalities have some kind of senior exemption, usually for homeowners age 65 and over who meet income criteria. Such programs could cut a home's assessed value by 50 percent or more and directly reduce tax bills. Higher-tech options such as tax deferral programs enable qualified seniors to defer payments until the home is sold or the title is otherwise transferred. Some states also provide “circuit breaker” programs that reimburse income-eligible taxpayers for the portion of their property tax that exceeds a certain percentage of their income. The secret is to be persistent, while millions of eligible seniors are not claiming these benefits because they don't know about them or because they find the application process daunting. Some Local Area Agencies on Aging offer free help with these applications.
2. Reverse Mortgage
A reverse mortgage is a bigger financial strategy that deserves consideration. These are called Home Equity Conversion Mortgages (HECMs) and are insured by the government, the Department of Housing of Urban Development (HUD) covers the majority of lenders against loss because the risk of default is borne by the federal government and are taken out by seniors. The money can be received as a lump sum, monthly payments or lines of credit to accommodate varying financial needs. But the complexity of their instruments requires a lot of work. Counseling sessions with HUD-approved counselors are required for a reason, they help seniors to understand accruing interest, insurance needs and the effect on heirs. When used strategically, a reverse mortgage can plug the gaps in retirement income, paying for large medical expenses or providing money for home modifications for aging in place.
3. Department of Energy's Weatherization Assistance Program
Senior citizens sometimes pay a high percentage of their income on energy, especially in older homes that do not have the most energy efficient systems. Free energy audits and upgrades are available to low-income homes through the Department of Energy's Weatherization Assistance Program, which has saved some households hundreds of dollars a year on their utility bills. Many states complement this with their own initiatives to provide free LED lightbulbs, low-flow showerheads, even appliance replacements. For immediate assistance, the Low Income Home Energy Assistance Program (LIHEAP) offers grants to assist with heating or cooling costs and, in some cases, emergency energy assistance for ineligible households. Some utilities offer low-income “lifeline rates” or budget billing programs that level monthly payments. Older adults living in especially harsh climates could investigate state emergency programs that offer free air conditioners or repairs to heating systems.
At extent, it's necessary to find a way that balances pragmatic solutions with human values. Some may be able to tap the equity in their home to age in place, while others could discover freedom in making a transition to better housing. The key is to make thoughtful choices that will safeguard financial security and quality of life. Through proper education and access to the programs that exist seniors are able to tackle financial difficulty without giving up the comfort and security of some place to call home. It comes down to knowing where to turn for help, and having the courage to ask for it, because when senior citizens have spent a lifetime building buildings, communities, and families, they deserve a little gratitude and respect in return.
