Pitfalls of Reverse Mortgages May Pass to Borrower’s Heirs

~~ Pitfalls of Reverse Mortgages May Pass to Borrower’s Heirs ~~

The only solace for Isabel Santos as she spends her evenings huddled over stacks of yellowed foreclosure notices is that her parents are not alive to watch their ranch-style house in Pleasant Hill, Calif., slipping away.

Ms. Santos, 61, along with a growing number of baby boomers, is confronting a bitter inheritance: The same loans that were supposed to help their elderly parents stay in their houses are now pushing their children out. “My dad had nothing when he came here from Cuba and worked so hard to buy this house,” Ms. Santos said, her voice quivering.

Similar scenes are being played out throughout an aging America, where the children of elderly borrowers are learning that their parents’ reverse mortgages are now threatening their own inheritances. Reverse mortgages, which allow homeowners 62 and older to borrow money against the value of their homes that need not be paid back until they move out or die, have long posed pitfalls for older borrowers.

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How to Cut Health-care Costs in Retirement

~~  How to Cut Health-care Costs in Retirement ~~

Medicare beneficiaries spent on average $3,324 a year of their own money on health care in 2010, according to a recent AARP report. But 10% of beneficiaries — almost five million people — spent more than $8,030, according to the report.

That may seem like pocket change compared with what you need to earmark for prescription drugs if you retired last year. To wit: Setting aside $151,000 of your nest egg for prescription drugs would give a couple retiring last year with median health costs a 50% chance of having enough money to provide for their medications, according to the Employee Benefits Research Institute. And setting aside $220,000 would give you a 90% chance of having enough money for your meds.

So, what can you do to trim those kind health-care costs in retirement? Financial planners shared with us some novel and some tried-and-true ways to cut costs.

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A Time to Splurge, and a Time to Pinch Pennies

~~ A Time to Splurge, and a Time to Pinch Pennies ~~

A friend of mine never understood why his neighbors spent a lot of money on things he didn’t care about, like houses and cars. To him, these things weren’t worth the money. So one time when he was being particularly grumpy about it, I asked him about his family’s spending habits.

I had noticed that compared with most families I knew, his family appeared to spend a lot of money on vacations and even more on recreational gear. My friend, being a smart guy, took only a moment to see the disconnect. Both my friend and his neighbors had made a decision that it was worth it to them to spend more on things and experiences that they really valued.

Read full article at: http://ow.ly/oVm7I

Consumers Not Powerless in the Face of Card Fraud

~~ Consumers Not Powerless in the Face of Card Fraud ~~

When you think about the security of your credit and debit cards, consider the facts on the ground.

Industry representatives readily admit that thieves are often one step ahead of them and that data breaches are a fact of life. One bank went rogue and publicly called out MasterCard and Bank of America for not sharing information and for failing to stem card fraud fast enough in Chicago taxicabs.

Now a for-profit college, sensing opportunity, has found its own angle. Monroe College is currently pitching a minor in cyber security. Its ad on New York City subways features a woman in a white coat holding a card that intersects with beams of light. Perhaps she’ll invent a way to solve the payments industry’s problems.

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Save for Retirement First, the Children’s Education Second

~~ Save for Retirement First, the Children’s Education Second  ~~

A HALF-DOZEN years ago, Brian Appelbaum’s savings plan was focused mainly on his own retirement. But now he is married and the father of two young children.

So Mr. Appelbaum, 53, has reassessed his outlook, as he and his wife try to save money for their retirement as well as for their children’s education. The couple are contributing regularly to a college fund — and are planning for Mr. Appelbaum to work longer, since the children will be college age when he is in his 60s.

“The overall package of things you have to consider at my age is different,” said Mr. Appelbaum, owner of a Scottsdale, Ariz., business that makes cutting blades for the construction industry.

Saving for retirement and a college education at the same time is a challenge for many families, but financial planners advise that if funds are limited — and for most people, they are — it is crucial to fund retirement first before contributing to an education fund.

Read full article at: http://ow.ly/ue6RH