Home Mortgage and Financial Planning Guide for Seniors


A senior is generally defined as a person of age 62 or above who receives either a pension or Social Security payments. According to statistical analysis from a 2014 US Census, 25 million seniors receive Social Security payments each month, with many also continuing on as active workers.

The Social Security program, has been forced to adjust to the demands of the retirement market. Recently the Social Security Program altered the retirement age requirements higher than previous decades. Eligible beneficiaries born before 1950 can now retire at age sixty-five with full benefits based on the average income during working years. Those born between 1950 and 1960 can retire at age sixty-six with full benefits. For those born in 1960 or later, full benefits will be awarded for retirement at age sixty-seven.

Seniors who retire early tend to face obstacles maintaining stable housing with income restrictions placed on beneficiaries after they start receiving Social Security benefits. Statistically, seniors who wait until full benefit age fair far better with viable income payments to support the need for housing and daily living expenses.


The best options for senior housing

Numerous government agencies, including Eldercare.gov, offer guides and advice for housing options for seniors who are contemplating downsizing or relocating based on their retirement payments and cost of living adjustment for Social Security Benefits. Several organizations dedicated to senior care research and philanthropy issue yearly help guides that address problems and issues facing seniors. USA.gov offers Edlercare Locator that matches benefits and resources based on a senior’s current geographic location.


Financial options for senior housing

Seniors receiving full Social Security benefit payments are unrestricted from earning investment income based on their assets and equities. If assets such as a home or rental property is a viable option, there are ways to earn a return on such properties. Refinancing a home may reduce the overall cost of the mortgage and allow for previously allocated payments to become available. According to Senior Living, investing as a senior could be just as profitable as pre-retirement employment.


Second mortgages

 An increasingly popular investment option among seniors is the second mortgage. A senior may want to authorize a second mortgage on a home that has equity and appraised value. A second mortgage is suitable for those who do not wish to sell but utilize the value available on an upswing in the price of home values. According to Duke University, there are restrictions on when a second mortgage can be authorized and on what terms. Seniors who are willing to accept the terms from the lender can go to the Cornell University’s link to familiarize themselves with the law regarding second mortgages.


Reverse mortgages

 Seniors who feel that risk is not necessary can apply for a reverse mortgage in which the equity of the home is assessed and the monthly mortgage payment is substituted for the equity of the home. Seniors are still responsible for the insurance and property tax, and must settle any liens on the property before obtaining a reverse mortgage. Strict government regulations on reverse mortgages protect seniors from otherwise illegal practices by predatory lenders. You can learn more about them through HUD. The HECM process, also known as a home equity conversion mortgage can be quick and efficient if a senior qualifies and is in need of financing options. A home equity conversion, as explained by Benefits.gov, might provide the financial solutions needed to have a long and rewarding retirement.


Reverse annuity mortgage

 If a senior does not qualify for certain home finance options, they can apply for a reverse annuity mortgage and/or a long-term home loan specifically designed for seniors. This loan is suitable for those who can afford monthly payments, but intend to pay off the mortgage when the house is sold. Long term loans may have a lower interest rate and can provide steadier payments for those Seniors with stable income. To learn more about this option, you can visit the state of Connecticut’s section on reverse annuity mortgages.


Long term care for seniors

Senior citizens who are in need of long term care can apply for HELOC loans that allow them to pay for healthcare in their homes using the assessed value of the home. HELOC loans are risky and do not have the same consumer protections as HECM loans. Seniors should compare the differences between HECM saver and HELOC to determine which is best for current financial obligations.

Not all retirees are in need of finance options but would like to save on home modification programs. Home modification can be costly to those who are retired and disabled. Each disability is different and requires a specific budget for necessary retrofitting and adjustment. HUD oversees government subsidized programs that seniors with disabilities can apply for.  Seniors who wish to use reverse mortgages for modifying their home can easily save money by contacting specialized lenders who work with home modification specialists.

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Money saving tips for seniors

Do you still need to find a way to make ends meet? Consider some of these money saving options.

  • Senior citizen discounts – Don’t be afraid to ask for senior citizen discounts. You can save money on a public transportation and some establishments implement discounts for senior citizen. Businesses do not always advertise the discounts, so it’s always best to ask. Additionally, if you are taking medication, you may qualify to save as much as 20% – simply have your ID with you to be eligible for a senior discount. You can also apply for an American Association of Retired Persons card through AARP which offers discounts on accommodations and more.
  • Spend your money wisely – Always buy what you need and not what you want. Instead of buying things that you think will make you happy, it is better to spend more time with nearby family. Maybe you’ll find the real treasure is what money can’t buy. Plan a weekly visit the grandchildren; or have a meal with your loved ones and enjoy every bit of that moment.
  • Shop once a month – This is one of the smartest ways of saving. Make a list to avoid multiple trips for the same things and skip on buying unnecessary items.
  • Invest more in your health – Finally, take good care of your health. Getting sick is costly, it can easily consume a chunk of savings, especially if you find yourself taking maintenance medications. Have a regular annual visit to your physician and exercise regularly. Avoid buying unhealthy food, instead plan set meals that form a balanced diet, adjusting if something feels wrong.

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Senior scams and how to avoid them

An ever increasing market for criminals is the emerging senior living market. Numerous non-profit agencies, such as NCOA, publish relevant warnings and tips on how to avoid scams and swindles for those of retirement age. Identity theft disproportionately affects seniors, so StopFraud.gov regularly releases articles about safeguarding identity and how best to protect it online and offline.

Online transactions are becoming ever more convenient and popular among seniors, so taking steps to protect financial information is highly recommended. For those who have already been victims of fraud, restitution may an option.

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Additional financial resources for seniors

For further information on financial resources for seniors, visit the Aging institute and their financial planning template. Rutgers University, a prominent business school, offers money advice for older adults. In addition, there is also a comprehensive seniors guide at LOC.gov with periodical updates has abundant resources for seniors and their families.