A yes life care communities require a lump sum

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A: Yes, life care communities require a lump sum payment before a person moves in. Q: Do retirees (or their children) need to assess the financial health of a life care community? A: Yes, the financial health of a life care community should be assessed and then periodically monitered. The "Other" Alternative It might actually make sense for a retiree to stay in their long-time home. This choice might require some creative solutions, but it may be best in the long-run. Could guardrails and possibly automatic lifts be added to stairs? Could flooring be altered to make the house easier to maintain and less of a tripping hazard? Could the laundry, bedroom, bathroom, and eating area all be situated on the same floor? Could a service be hired to maintain the lawn and remove snow during the winter? What about a service like Life Alert (Links to an external site.)Links to an external site. to be available in the event of immediate emergencies? If these concerns could all be addressed and the neighborhood is not a problem, then remaining in a long-term primary residence might be the best solution. This enables the retiree to avoid the psychological nuances of choosing to sell a house and moving to an unfamiliar area. If the retiree is experiencing financial difficulty, then there are a few creative solutions to enable to remain at home and still tap the equity. The first creative solution is called a sale-leaseback agreement . In this type of arrangement, the retiree will sell their house to someone else but enter a contract to rent it from them for a certain period of time, which is typically a lifetime lease (as long as the retiree is alive and/or physically able). In this way, they are accessing all of the equity, staying in the house longer, and shifting maintenance issues to the new owner. They could also look into renting out space in their home to a college student or maybe even something like Airbnb . The other product of creative finance is called a reverse mortgage . This product creates a non-recourse loan, which means that all retirement assets other than the collateralized house are safe from this creditor. The homeowner will receive payments while they remain in their house. The payments could take one of three forms: a lump sum based upon their age; a credit line accessible as-needed; or a set monthly cash advance. Essentially, a loan balance will accrue in exact reverse of how the homeowner paid for their house in the first place. A homeowner must be at least 62 years old to access this option, and older retirees are permitted to borrow
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significantly higher percentages of the home’s appraised value because their life expectancy is shorter. You might be wondering what happens to the remaining home equity if there is any equity left when the retiree either passes or decides to move. In a reverse mortgage, the excess equity belongs to either the retiree or their heirs, whichever is applicable. For more information on reverse mortgages, please watch the video below.
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  • Spring '14
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