With a traditional forward mortgage, over time your debt decreases and your home equity increases. You borrow money to purchase a home and make monthly payments.

A reverse mortgage is a loan against your home that you don’t have to pay back for as long as you live there. You can turn the value of your home into cash without having to make monthly payments. This money can be taken as a lump sum, monthly cash payments to you or in a creditline account where you decide how much cash is available to you.

To qualify for a reverse mortgage, you must be 62 or older and own your home. With a reverse mortgage you don’t have to pay anything back until you die, permanently move out of your home or sell it. Unlike forward mortgages, where your income must be sufficient to qualify, you need not have any income to qualify for a reverse mortgage because there are no required monthly payments.

As you take loan payments you will be “spending down” the equity in your house. When the loan is over, your heirs must repay the loan plus the interest. During the term of the loan you are still responsible to pay the taxes and insurance on your home.

Before making any decisions regarding a reverse mortgage, there are several factors to consider. We will cover these in future posts.

The House has passed a bill that will gradually raise the minimum wage from $5.15 to $7.25 per hour over three years. The bill will now go to the Senate.

With more seniors and retirees staying in the work force, many taking part time jobs as supplemental income or as a way to get out into the community and keep active, the increase could affect millions of seniors who fill minimum wage positions. It will also positively affect all minimum wage workers in the lowest income brackets.

It doesn’t sound like something anyone would be opposed to, does it?

The fly in the ointment is that the bill pairs the increase in the minimum wage with estate tax exemptions. Democrats in the Senate are vowing to kill the bill, rather than allow what they consider a tax cut for the rich to go through. The bill contains exemptions on the estate tax of $5 million for individuals and $10 million for the estate of a couple. The current law provides for a 55% tax on estates worth more than $1 million starting in 2011.

Seniors who may be even now doing their estate planning will want to take note and research the bill and the effects it may have on the taxes their heirs will pay upon inheritance. As always, you should voice your opinion to your state representatives and senators.

You can find out who your state representatives and Senators are at this website. Email addresses are available for most of the members of Congress. Ground mail addresses and phone numbers are available for all members of Congress.

The U.S. Administration on Aging has announced a new program , “Money Follows the Person”. Under this initiative, states will be awarded grants for programs and services that allow more choices for seniors and persons with disabilities who need long term care but prefer to live in their own homes and communities.

According to HHS Secretary Mike Leavitt, “States will also get more for their money by giving the elderly and people with disabilities more control over how and where they get the Medicaid-funded long-term care services they need.”

Visit this site for more information on the New Freedom Initiative.

One one hand we hear the Baby Boomers are not planning on retiring at all.  On the other hand, we hear that they are all getting ready to flee the workplace simultaneously.  How can they both be true?  Perhaps the desire is there for retirement, but the funds are not.  It seems Baby Boomers have lived so much in the here and now that they don’t have the savings built up to kick back and relax at retirement.

Almost one in three boomers will lack money in retirement to pay for health care or long-term care, according to a study cited in a Minnesota Human Services Department report that’s part of Transform 2010, the first lap of the longer-range Project 2030. A risk index released recently by the Center for Retirement Research at Boston College raises similar concerns. Thirty-five percent of early boomers and 44 percent of late boomers will be “at risk” at age 65 of maintaining a pre-retirement standard of living, the index reports.

For a generation that prides itself on being cool, that’s not cool at all.  In fact, this is very uncool.  This is a serious problem that is coming our way, and it is coming fast.  There is help, and although it won’t be easy, there are ways to fatten up that nest egg.  Reading this article is a good start – research your options and make the best decisions you can to increase your savings and secure your future.

Baby Boomers Lacking Retirement Savings