Aging in Place vs. Your Mortgage
February 14, 2009 by Mr. GoTo
Filed under Boomer Reading, Mortgages, Debt, and Credit
Mrs. GoTo and I recently paid off the mortgage on our vacation home. (If you are interested I described the practical steps we followed to complete the mortgage payoff.)
In this post I want to mention something else about other baby boomer trends that are related.
Baby Boomers and the Foreclosure Trend
Americans age 50+ represent 28% of all mortgage delinquencies and foreclosures.
Over 684,000 older Americans were either delinquent or in foreclosure at the end of 2007.
Older households have less time and ability to financially recover from foreclosures. At the same time, more 50+ homeowners are carrying mortgage debt into their retirement years.
This is sad news indeed and is more evidence that as a generation of people who should know better, we haven’t been making very good decisions about our financial future.
Aging in Place
One of the big problems with the surge in mortgage delinquencies and foreclosures among the 50+ crowd is that it is inconsistent with the “aging in place” concept that is also attracting a lot of attention. Many retired Americans are eager – almost desperate – to stay where they are as they age. I don’t suppose I can blame them even though we haven’t yet decided where that “place” might be.
Numerous government and private organizations have been focused on the aging in place issues. The Aging in Place Initiative is one of them. Part of the reason is cost. It is a lot less expensive in most cases to care for older citizens in their own homes than it is to house them somewhere else.
If retired baby boomers are struggling to “stay in place” because of mortgage obligations, they will not have the option of “aging in place.”
The bottom line is that something must be done to reverse this trend of mortgage failures on the part of older boomers and get them focused on becoming mortgage free. I hope this becomes part of any mortgage rescue plan in current or future government stimulus packages.
Boomer Reading
I read a few things this week that you may like as well:
First, Mark Miller at Retirement Revised wrote an important piece on why if Social Security isn’t Broke, Don’t Fix it. The point is that – yes – the Social Security system has issues, but not as bad as most seem to think. The other interesting argument is that the government should actually ramp up the entire system to make it a more significant component of retirement income.
Consumer Boomer offers some good advice on how to manage your retirement assets in the event of a layoff. This is an important issue to think about because if you burn through those assets before retirement, it can be almost impossible to get them back.
My writing also appeared in these carnivals this week, providing more interesting reading:
Carnival of Personal Finance #191
Photo credit: Prakhar
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