Financial Options Designed for Seniors to Remember During a Time of Crisis

The Coronavirus outbreak has had a significant impact on the bottom line for seniors across the country. People have watched the stock market drop, wiping out a substantial percentage of their holdings and income. But it is important at times like these to not “panic-sell” and lock in your losses. This situation is fluid and unfolding at a rapid pace. Markets are waiting to see how fiscal policy is implemented from Washington, D.C., and that could bring about stabilization and then recovery in the not too distant future.

Chris Orestis, CSA

But in the meantime, there are still safety nets and even financial opportunities that can help seniors in particular. Social Security, Medicare and Medicaid payments remain unchanged. Income from annuities remain guaranteed and unchanged. Money in banks is protected by the FDIC which guarantees $250,000 per depositor. Disability income from SSDI or disability insurance incomes remain unchanged. And financial opportunities for seniors, particularly those with impaired health and need for care, exist that should be considered.

Veterans could be eligible for the Veteran’s Aide and Attendance Benefit which can provide up to $2,000 a month towards long-term care support and services for the veteran and/or their spouse. A HECM (reverse mortgage) line of credit can be taken out by anyone age 62 and older to establish a credit line against the equity of the home. The credit line can be drawn only as and when needed, and there are no monthly payment obligations as long as the borrower is living in the home. With the Fed reducing rates to historic lows, now is the time to look at re-financing your mortgage to reduce your monthly obligation. For the owners of life insurance, there are a couple of options to get liquidity from this asset. If the owner wants to keep the policy in-force, they can take out a policy loan for upwards of 90% of the cash surrender value. If the policy owner does not want to continue paying premiums to keep the policy in-force, they could use a Life Settlement to sell the policy under tax-favorable conditions for a percentage of their death benefit today (and be relieved of paying anymore premiums).

Also, don’t forget that the tax deadline has been extended from April to July 15!

About the Author

Chris Orestis, CSA is President of LCX Life and RetirementGenius.com. He is a nationally recognized senior care advocate and expert in specialty senior-living funding solutions. The author of two books, numerous published papers and articles, and a frequent industry speaker; he is the innovator that brought the LTC-Life Settlement into the market over a decade ago.