A Senior's Quality Of Life By - American Advisors Group

The seniorcare challengeCaring for an aging loved one can be challenging at times. As anadult child and caregiver, some of the difficulties you may encounterdaily include having less time for other family members and yourself,balancing work and caregiving, dealing with physical and mentalstress and dealing with mounting financial obligations that can beassociated with senior care.Luckily, Home Equity Conversion Mortgage (HECM) loans, alsoknown as reverse mortgages, are available to help older Americansaccess the wealth in their homes. This powerful retirement fundingtool taps into home equity to help pay for the care they need,and enables them to continue living in their homes.As the nation’s leader in reverse mortgages, American AdvisorsGroup (AAG) is dedicated to informing seniors, their adult childrenand caregivers about how a reverse mortgage can enhance theirlives during retirement and help them age in place.What is a HECM reverse mortgage?A HECM is a government-insured loan for those aged 62 and older,with no monthly loan payments for as long as the borrower lives inthe home, continues to pay taxes and insurance, maintains theirhome, and otherwise complies with the loan terms.“My daughter Maryann learned of American Advisors Groupand was convinced I should look into a reverse mortgage. Theyexplained the process as an alternative to selling our home. Nomore sleepless nights. I can pay off my debts and finally havepeace in my life.” Helen T., California2

Agingin place“Not onlycan care beprovided lessexpensivelyin the home,evidencesuggeststhat homecare is a keystep towardachievingoptimal healthoutcomesfor manypatients.”The JointCommissionHome CareProgram “Home– The Best Placefor Home HealthCare,” 2011Aging in place helps enhancea senior’s quality of life byempowering them to:a Continue living in their comfortable andfamiliar environment while preservingtheir community connectionsa Feel independent, while remaining closeto family and friendsa Reside in a home that may haveemotional value for them and/or .LEARNMOREINSIDEaag.com 3

A solutionfor senior careFor those who are 62 orolder, a reverse mortgageloan can be used to help payfor senior care, giving lovedones the opportunity to livesafely and comfortably intheir homes, on their ownterms.A reverse mortgage can:a Pay for in-home care services, reducing the need forexpensive nursing homes and offering improved quality ofcarea Fund in-home care, which can be ramped up as graduallyor quickly as needed – from household chores to 24-hournursing carea Allow access to a standby HECM reverse mortgagegrowing line of credit – which can be set up in advance,before care is needed – ready to help pay for unplannedexpensesa Eliminate monthly mortgage payments for as long as yourloved one lives in his/her home and otherwise complieswith the loan terms‡a Provide tax-free proceeds4†

Howcan you qualify?Qualification is simple and easy, and isbased on the important factors below:a You must be age 62 years or older;your non-borrowing spouse may beunder age 62a Own your homea Occupy your home as your principalresidence(The borrower must meet the financial requirements of the HECM program.)Flexible loandisbursement options:A LUMP SUMPAYOUTPay off largeexpenses orother debtMONTHLYPAYMENTSFor a set periodof time or for aslong as you livein your homeand comply withloan termsA HECM GROWINGLINE OF CREDITAccess to fundswhen you needthemaag.com 5

Howdoes it work?A HECM reverse mortgage allows your loved ones to access theirhome equity and turn it to cash, a line of credit or a combination ofthe two.The loan amount they qualifyfor is based on their age,their home’s appraisedvalue, and current marketinterest rates. With a reversemortgage, there are no monthlymortgage payments‡ required,but the borrower is responsiblefor paying property taxes,maintenance and insurance.When the last remaining spouse leaves the home (or does notcomply with the loan terms), the loan balance including any fees andinterest, becomes due.“It’s going to be more important to look at housingwealth as a resource to sustain retirement because a houseis a big part of a baby boomer’s wealth compared to justportfolio value. A reverse mortgage is a nice additionfor risk management—and for many people it’s probablygoing to be a need rather than a want.”John Salter, Ph.D. - Assistant Professor of Financial Planning,Texas Tech University6

3 Commonquestions1. What happens to the family home?Borrowers may leave the home to lovedones as they wish, and heirs may stillchoose to sell or keep it after repayingthe loan. There are various methods thatborrowers or heirs can use to repay theloan when it is due.2. How do we repay the loan and how much will we owe?The loan is repaid once both spouses have left the home or the loanterms are not complied with. If the home is sold, the loan (includinginterest and fees) is repaid, and any remaining equity goes to theborrower or the borrower’s estate.3. What happens if our parents leave their home beforereceiving their full reverse mortgage loan?If your loved one leaves the home, any part of the loan that hasn’tyet been disbursed remains as equity in the home and becomespart of the estate. The reverse mortgage becomes due and the heirsare given a reasonable time to sell the home. They also have theoption to keep the home by paying off the reverse mortgage loan orrefinancing. Otherwise, the home is sold with proceeds first payingoff the reverse mortgage loan, and the remaining balance going tothe estate.aag.com 7

DecidingtogetherAmerican Advisors Group encourages loved ones to get involvedand go through the loan process alongside family members, so thateveryone understands how a reverse mortgage works. We realize thata reverse mortgage is a big financial decision and we suggestthe following tips to help guide your family’s reverse mortgagediscussion:Tip 1 - Living Choices Where are your parents going to live as theyget older? Do they want to stay at home or move to an assisted livingfacility? These questions can help your family better understand aboutyour loved one’s future living preferences.Tip 2 - Finances Have your parents calculated the costs involved inmeeting their retirement goals? Have they consulted with a financialadvisor to find out how much money they will need for long-term careexpenses? Can they afford to maintain their current lifestyle, and if not,can you afford to supplement their income? Knowing your parents’financial situation can help plan for the future - resulting in greater peaceof mind for everyone. Have your parents planned financially for theirpotential senior care health needs?Tip 3 - Health Have your parents outlined their goals for a healthyretirement lifestyle? Are their health screenings and medical checksup-to-date? Addressing health concerns is valuable as our parentsadvance in age.Tip 4 - Talk With a Professional Did you know that you can use areverse mortgage to fund home modifications? Or that your loved onewill continue to own his/her home when they get a reverse mortgage?AAG licensed professionals are trained to help you explore your parent’sfinancial situation, provide you up-to-date facts and walk you throughthe process every step of the way.8

RCALL 1-800-608-6004to speak with an AAGprofessional today.“You have definitely taken some financial burden off myparents. The smiles they have on their faces are justbreathtaking. Thanks again, American Advisors Group”Daughters of Mary & Alvin, Louisiana

What seniorshave to say“Our reverse mortgage with American Advisors Grouphas allowed us to buy a new vehicle and take care ofmy wife’s medical bills. Your service has gone above andbeyond what I’ve received from conventional banks.”Terry B., Louisiana“I wanted to have a line of credit in case we hadan emergency that would [exceed] the funds wehave. Peace of mind is number one which isthe reason I went for a reverse mortgage.”Donna P., Michigan“Each step taken to complete our reverse mortgagewas a step into new beginnings of our lives. Thankyou American Advisors Group. We can once againenjoy a stress-free life.”Nina and Walter S. , New Jersey“I am very happy with the results of myreverse mortgage. For the very first time inmy life, I am debt free!”Regina B. ArizonaPictures are included as artistic elements onlyand are not photos of actual borrowers.CONSIDER THIS SOLUTION:The best strategy for seniors may be to set-up a HECM reverscredit in advance, so funding is available when it’s most needeAmerican Association for Long-term Care Insurance retrieved from aaltici.org. 2USA Today “Do Retirees Need LonHuman Services.“What is Covered by Health & Disability Insurance?” Retreived from LongTermCare.gov. 4John Hahttp://www.sfpfinancial.com.110

CONSIDER THENUMBERS97%Senior care is one of themost significant life events,yet most seniors don’tadequately plan for it. ManyAmericans believe that longterm care will be paid for bytheir medical insurance. Thereality is that Medicaid willpay for most long-term carepatients in the U.S., but it istargeted to those with lowincome and fewer assets.For clients in the middleclass, care can come at agreat price.se mortgage standby line ofed.ng-Term Care Insurance?” 3U.S. Department of Health andancock (2013). “Long-Term Care Cost of Care Survey”. fromMore than 97 percentof Americans make noadvance plans for theireventual senior careneeds191%For couples, there is a 91percent chance that oneof them will require care289%The percentage of adultchildren who want theirparents to pay their billsand not worry aboutleaving an inheritance3The cost of senior caremay range from 29,640per year for in-home careto more than 94,170 peryear for convalescentcare4aag.com 11