THE 5 BIGGEST REGRETS PEOPLE HAVE BEFORE THEY DIE

E     BEFORE THEY DIE                        May 16, 2016

Want to hear the strangest thing on earth?

Death is perhaps the most constructive fact of our existence. Being aware of death throughout your life can beget the healthiest attitude: one of perspective.

Countless people throughout history knew this too. The ancient Greeks used to “practice death every day,” and the Toltecs would use death as “fuel to live and to love.” The constant reminder ensured they would live more boldly, more kindly, and with less fear.

THE GOOD NEWS ABOUT DEATH

Here's how the morbid subject can actually benefit us: Our limited days on earth are the ultimate impetus to live with less fear and more intention.

The majority of the time, many of us live as if there will be no end to our days. We stay in unfulfilling careers. We remain in unhappy relationships. We will travel the world “one day.” We fail to tell people how much they matter to us. We hide our real truth, gifts, or talents from the world because we are scared of being judged and criticized.

“Our limited days on earth are the ultimate impetus to live with less fear and more intention.”

Losing a parent when I was young made this much more real for me. I felt blessed to come to the realization of how precarious and precious life is while still in my younger years. But you don’t need a loss early in your life to take advantage of the wisdom that awaits you. Learn from people who know.

One of my favorite books is Bronnie Ware’s international bestseller The Top Five Regrets of the Dying. Ware was a hospice nurse in Australia for several years and cared for patients in the last few weeks of their lives. She writes with incredible clarity how similar regrets surfaced again and again.

Surprise, surprise: There was no mention of insufficient status; undelivered revenge; or sadness over not being the thinnest, prettiest, or most famous. These were the most common regrets. (Numbers one and five could make me weep.)

THE 5 MOST COMMON REGRETS

1. I WISH I'D HAD THE COURAGE TO LIVE A LIFE TRUE TO MYSELF, NOT THE LIFE OTHERS EXPECTED OF ME.

"This was the most common regret of all," Ware writes. "When people realize that their life is almost over and look back clearly on it, it is easy to see how many dreams have gone unfulfilled. Most people had not honored even a half of their dreams and had to die knowing that it was due to choices they had made, or not made."

2. I WISH I HADN'T WORKED SO HARD.

"All of the men I nursed deeply regretted spending so much of their lives on the treadmill of a work existence."

3. I WISH I'D HAD THE COURAGE TO EXPRESS MY FEELINGS.

"Many people suppressed their feelings in order to keep peace with others. As a result, they settled for a mediocre existence and never became who they were truly capable of becoming. Many developed illnesses relating to the bitterness and resentment they carried as a result."

4. I WISH I HAD STAYED IN TOUCH WITH MY FRIENDS.

"Often they would not truly realize the full benefits of old friends until their dying weeks, and it was not always possible to track them down. Many had become so caught up in their own lives that they had let golden friendships slip by over the years. There were many deep regrets about not giving friendships the time and effort that they deserved."

5. I WISH THAT I HAD LET MYSELF BE HAPPIER.

"This is a surprisingly common one. Many did not realize until the end that happiness is a choice. They had stayed stuck in old patterns and habits. The so-called 'comfort' of familiarity overflowed into their emotions, as well as their physical lives. Fear of change had them pretending to others, and to their selves, that they were content.”

GET CLEAR ON WHAT YOU WANT

Here's an exercise I perform with my clients, which you can do at home to figure out what you want to do, have, and be during your precious days on planet earth.

Take an hour to be quiet with yourself, a time without distractions when you will not be interrupted. Picture yourself in your elderly years. Attempt to see your life through the lens of your 80- or even 90-year-old self.

Start a conversation with this wiser, older version of you. Be blatantly honest. Ask yourself:

·         What do I really, really, really want?

·         Where am I holding back?

·         What will I congratulate myself for having the courage to do, right now?

·         What part of myself do I really need to honor and be true to (even if this goes against others' expectations of me)?

·         What really makes me feel happy and alive?

·         How can I make my happiness and my truth my number one priority?

It’s up to you to get the highest possible return on every day of your limited life. You can eradicate these potential regrets, starting now.

Whenever you think upon these questions, keep that older version of yourself in mind constantly. And every day, with every small action you take in the direction of your personal truth and happiness, he or she will be there, encouraging you. And he or she will be smiling.

This article was written by Susie Moore from Greatist and was legally licensed through the NewsCred publisher network.

Want to learn how to plan for these "regrets" before they happen, then learn about the benefits of a Reverse Mortgage and how it can change your retirement: contact George Lagarde at  GLagarde@FinanceOfAmerica.com

The new math on reverse mortgages

Published: Apr 10, 2016

Advisers now are promoting them as a valuable tool for retirement planning, thanks to recent safeguards

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By

ROBERTPOWELL

  

The reverse mortgage has won some new respect.

A decade ago, most financial advisers would roll their eyes at the mention of reverse mortgages, loans that give homeowners an advance on their home equity and allow them to delay repayment until the home is sold. Such products, these advisers used to say, weren’t for their clients, but rather for those who didn’t prepare financially for retirement.

New safeguards in recent years, however, have led many advisers and researchers to change their minds about reverse mortgages. Indeed, many now are exploring when and how to use them in financial plans.

One important change, the Reverse Mortgage Stabilization Act of 2013, prevents homeowners in most cases from taking all their equity at once — roughly 40% of the total amount that can be borrowed is unavailable until a year after the initial loan. Other recently enacted regulations require homeowners to demonstrate they are able and willing to pay their property taxes and home insurance. And there are new protections for the non-borrowing spouse.

Recent policy changes “should make the product safer for seniors in the future,” says Stephanie Moulton, an associate professor at Ohio State University and co-author of a 2015 paper on reverse mortgages published in the Journal of Urban Economics. Moulton estimates that such changes as limiting how much equity borrowers can extract upfront could cut the default rate on reverse mortgages in half. (In 2014, nearly 12% of reverse-mortgage borrowers in the federally insured Home Equity Conversion Mortgage program were in default on their property taxes or homeowners insurance.)

“Over time, these changes may encourage larger banks to re-enter the market, further increasing the credibility of the product and potentially lowering costs,” Moulton says.

Of course, there are still risks, including spending the proceeds too quickly and suffering losses if the proceeds are invested, as pointed out in a 2015 paper written by Wade Pfau, a professor at the American College of Financial Services in Bryn Mawr, Pa., that favored the use of reverse mortgages in a retirement-income plan under the right circumstances.

While acknowledging the risks, Moulton says that “one of the advantages of the federally insured reverse mortgage, the HECM, is that the government assumes some of the risk for the borrower.” For example, she notes that HECM borrowers can never end up on the hook for negative equity. If the balance on the reverse mortgage ever grows to exceed the value of the home, the federal insurance covers the difference.

Here’s a look at some of the reverse-mortgage strategies financial planners suggest:

Taking a lump sum

Borrowing enough of the equity in a house in a lump sum to pay off an existing mortgage is one of the most frequent uses of a reverse mortgage, says Moulton. More than 60% of reverse-mortgage borrowers have used the proceeds for this purpose, according to her research. “This actually may be a pretty smart strategy,” she says.

Moulton cites a recent report by Harvard University’s Joint Center for Housing Studies that found that nearly 40% of seniors age 65 and older carry a mortgage today, a rate that has more than doubled since 1992. “Using a reverse mortgage to pay off a forward mortgage frees up monthly cash flow to a household,” she says. “Essentially it has the same effect on a household budget as receiving a monthly annuity payment.”

But lump-sum borrowing can go wrong. Harold Evensky, chairman of Evensky & Katz/Foldes Financial, a wealth-management firm based in Lubbock, Texas, generally advises against using a lump sum as leverage to increase debt — as a down payment on a second home or vacation home, for instance. “There may be circumstances that justify the strategy, but it’s not something that should be considered without carefully considering the potential risk,” he says. “The risk is overleveraging,” he says—taking on more debt than you can afford to pay off.

And even if that isn’t the case — if the homeowner spends the borrowed money without incurring additional debt, say on a vacation or a car — spending the equity in a home this way deprives the homeowner of a valuable financial cushion, he says.

Opening a line of credit

Increasingly, advisers are suggesting that homeowners establish a line of credit through the HECM program whether they need the money immediately or not, because it can be used in several ways, as the need arises, to protect savings or even increase income in retirement.

A line of credit makes more sense than borrowing a lump sum and keeping it in reserve, says John Salter, an associate professor at Texas Tech University who has co-written papers with Evensky on reverse mortgages. That’s because, due to the intricacies of reverse-mortgage terms, the unused portion of a line of credit grows over the years, giving the homeowner access to more cash.

Shelley Giordano, chairwoman of the Funding Longevity Task Force, a Washington, D.C.-based industry group that promotes the use of home equity as a tool for retirement income, suggests setting up a reverse-mortgage line of credit as a way of protecting retirement funds from fluctuations in the financial markets.

Here’s the idea: In a bear market, homeowners can borrow funds as needed through the line of credit rather than withdrawing money from their investment portfolios. Withdrawals from a portfolio in down markets lock in losses and leave less money to grow when markets rebound. By borrowing instead, homeowners give the portfolio a better chance to recoup its losses when markets turn around.

Once the portfolio recovers, it can be used to pay off the line of credit, which is then fully available the next time cash is needed in a bear market. Giordano notes an HECM line of credit “cannot be canceled, frozen or reduced regardless of what the home value does in the future.”

An HECM line of credit also can be used as a source of income for those who want to delay applying for Social Security benefits and so increase their monthly payout when they do start taking benefits, Giordano says. After you apply for Social Security, you can stop taking money from the line of credit and, if you want, pay the loan back.

Because income from a reverse mortgage isn’t taxed, experts say an HECM line of credit can also be used — in place of taxable withdrawals from retirement accounts — to avoid tax-bracket creep, as well as the higher Medicare Part B and Part D premiums that can result from higher incomes.

Giordano also suggests using a reverse-mortgage line of credit to pay taxes due on Roth IRA conversions. In the conversion process, distributions from IRAs are taxed as ordinary income, and experts often recommend paying those taxes with funds outside the IRA, because using money from the IRA for that purpose generates even more taxes.

Evensky says the usefulness of reverse mortgages belies the negative impression some people still have of them.

“I believe most criticisms relate to a myopic view of the product that has not been reviewed for decades,” he says. “Unquestionably there can be misuses of the product. But the problem is the use, not the product.”

Robert Powell is editor of Retirement Weekly, published by MarketWatch. .

Want to learn more about the benefits of a Reverse Mortgage, contact George Lagarde at      GLagarde@FinanceOfAmerica.com

• Retirement and the Unexpected Costs of Living in Retirement.

Written By: Lauren Russell

Retirement planning can be stressful enough when you’re just thinking about the amount you’ll need to live on. And, unfortunately, many Americans only focus on that, completely forgetting the money they may need for unexpected costs. Obviously, it is hard to plan for unexpected costs because, well, you do not expect them. However, there are a few you can assume may happen in your retirement lifetime.

Medical

Aging bodies bring a slew of new health issues. Some are minor; some can be major. You may find that one innocent fall puts you in the hospital for a few days. You may start requiring at home care or physical therapy. Whatever the medical need, those bills can rack up debt if you aren’t careful.

Home

If you’ve been a homeowner for many years, you probably already know that owning a home can be expensive. There could be home improvements you’ve had on your “to do” list for a while, or a ball could fly through your window, shattering it to a hundred pieces tomorrow. Your furnace could be one day away from breaking, and you could be one thunderstorm away from that giant tree crashing down into your yard. You never know with a house. That’s why it is important to keep home improvements – and possible housing emergencies – in mind.

Another issue is if you plan to move out of your home. Whether you are downsizing or moving to  be with family membes, you will have to factor in moving costs and other costs.

Family

As you grow older, so does your family. That may mean that, during your retirement, there may be a few weddings, babies, graduations, and other life events you’ll be a part of. You may need some extra funds to travel, buy gifts, or get dressed up for the occasion.

It may also mean that certain family members may need help both emotionally and financially. Your child may need to move back in for a short period of time, or you may want to help pay for your grandchild’s college tuition. No one can make the decision to help a loved one except you. If you do choose to, though, that may be an extra expense for you.

Loss

This may sound a little macabre, but we all pass away some time. It’s something you must come to terms with when it comes to unexpected costs in retirement. If you or your spouse passes away, there is a loss of income. Not only that, but there may be funeral costs, which can get expensive. This isn’t a fun part of retirement planning, but it’s a must.

When it comes to retirement planning, a reverse mortgage may be an effective financial tool. You can open a line of credit and not use any money until you need it. That line will continue to grow in value over time, and it can never be taken away form you.  When one of the aforementioned events happen, you’ll be well prepared. If you plan to move, you may want to look into using a reverse mortgage to purchase a home. Yes, I said Purchase!  This will allow you to buy a new home and never have to make a monthly mortgage payment as long as you live there – though you are still responsible for paying homeowner’s insurance, property taxes, any HOA fees and home maintenance costs. Not having to pay a mortgage each month can give you more money each month for other expenses, both expected and unexpected.

Want to learn more about the benefits of a Reverse Mortgage, contact George Lagarde at      GLagarde@FinanceOfAmerica.com