Before we finish up on Flat Taxes for 2022, and look at some personal finance reminders, there are a few things that got my attention this week. Of course, as I have often written, many times these things are old news by the time the column actually runs on Sundays.
First, as I have often indicated, too many people in this country have not saved and do not save enough for a retirement with dignity, and the largest increase in individual bankruptcy filings before the pandemic was for people 65 and older, because too many had not saved enough for retirement, had not budgeted realistically in retirement, and were still living above their means with credit cards. An acknowledgement of that credit card component is contained in a Reverse Mortgage commercial I finally focused on this week. It made clear that it was for “older homeowners,” but, also, that one thing you could use the proceeds for was to pay off high-interest rate credit cards. The financial industry knows about the credit card problem in this age group and markets to it.
Speaking of reverse mortgages, we have discussed them in the past, but here are some possible downsides to look for, according to get.askmoney.com. It is why you need trusted legal advice before entering into such a mortgage. First, you may not be able to refinance the loan; there are usually high upfront fees, higher than those for a refinance; and the interest rates, which may be adjustable and subject to interest rates changes, are generally high. Second, they may have a higher risk of foreclosure; you may not be able to move, even into a nursing home, without paying it off; and there could be spousal issues, if you pass away and your spouse was not at least 62 when the mortgage was entered into. Each mortgage is obviously different, but these are some issues to be aware of.
