The reverse mortgage loan is something that is taken out be seniors over the age of 62. However, it is something that may be useful to the younger generations in the family. That's because the reverse mortgage can be used to keep the elderly generation somewhat self-sufficient so as to reduce the financial drain that the individual places on the rest of the family as he or she ages.
We've talked here before about how the reverse mortgage can be of use to the sandwich generation - the population of baby boomers who are taking care of both their children and their elderly parents. The elderly parent takes out the reverse mortgage to assist with paying the bills. This helps the baby boomer from having to postpone retirement in order to care for both generations.
This can also be looked at in terms of the "negative inheritance". This term refers to the situation when a person caring for an elderly family member has to pay more for the care than he or she will get in inheritance. We do this because we love our family and it's the right thing to do. But it certainly places a burden on us. The reverse mortgage can alleviate that burden.
And of course, as the baby boomer generation ages, those individuals may also take out reverse mortgage loans to further reduce the strain on the younger generations. This may be increasingly important as our health care system struggles to care for the big baby boomer generation that's getting older. By limiting the strain as much as possible now, we'll be able to support each other in the years to come.
Question of the Day: Do you believe that the reverse mortgage is a good solution to the problem of negative inheritance?
