Paying Medicare or Insurance Premiums with a Reverse Mortgage
Healthcare costs continue to rise, and it’s one the biggest threats to retirement nest eggs that seniors face. A study in 2018 showed that over the course of the year American seniors took out an estimated 22 billion from their savings to cover health-care related expenses. The average amount withdrawn was nearly $4,000. Not only can a critical, unforeseen health crisis leave seniors financially devastated, but just covering monthly health care is difficult for many. Thankfully, there is a solution to help seniors pay for healthcare needs: A reverse mortgage.
Leveraging Home Equity
A HECM (Home Equity Conversion Mortgage) reverse mortgage lets homeowners 62 or older use part of the equity in their homes as tax-free income without having to leave, sell, or give up the title to their homes. The equity payment can be taken in a lump sum or can be broken into monthly payments or a combination of both. There is also an option to convert the home’s equity into a line of credit.
The funds from a reverse mortgage can be used for anything, including annual Medicare or private insurance premiums, deductibles or HMO co-payments, and prescription drugs. Many retirees make the assumption that Medicare will cover the majority of their healthcare costs, but that’s just not the case.
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More on Reverse Mortgages & Healthcare Costs
A study published in 2018 indicated that in 2013, the average senior on Medicare paid over $5,500 in out of pocket, dental, and long-term care expenses which are not covered by Medicare. The amount, on average per capita, is 41 percent of a person’s Social Security income. This amount is expected to increase to 50 percent by 2030.
Healthcare costs after retirement are more expensive than most seniors realize. And for those living on a fixed-income, the rising costs can leave seniors feeling overwhelmed and financially insecure. A reverse mortgage can provide seniors sixty-two and over the solution they’re looking for to bridge the gap between Medicare and out-of-pocket healthcare expenses. To find out if a reverse mortgage is right for you, speak with a Certified Reverse Mortgage Professional.
Learn more about how people are using home equity conversion mortgages for purchasing homes:
Please keep in mind that the reverse mortgage industry in constantly changing and some of the information contained on this site may not be current. Please ask a licensed reverse mortgage professional for up-to-date guidelines.