Program may help Americans unprepared to retire


By Alain Valles

Two recent nationwide studies have concluded that that a large percentage of Americans are not financially prepared for retirement, and will not be able to retire comfortably. However, for senior homeowners 62 years or older with sufficient home equity, a reverse mortgage may be a practical solution to the retirement dilemma.

A_VALLESThe Federal Reserve Board published in the September 2014 Report on the Economic Well-Being of U.S. Households in 2013, that 31 percent of non-retired respondents have no retirement savings or pension. For people age 60 or older, 15 percent have no retirement savings or pension, and 67 percent are relying on Social Security to fund retirement. The report also found that the Great Recession has had a significant impact when people plan on retiring, with 40 percent delaying their planned retirement date.

A second study released in September 2014 by the Harvard Joint Center for Housing Studies & AARP Foundation reported similar findings. The study, Housing America’s Older Adults — Meeting the Needs of An Aging Population, found that the country is unprepared to meet the housing needs of its aging population, which is expected to grow to 132 million 50+ year olds by 2030.

In addition, the study highlights that seniors will have difficulty affording their homes and may be forced to cut back on food and health care. Home repair costs and in-home care will also have a substantial financial impact.

While these two studies present a bleak outlook for seniors, reverse mortgages may solve the financial challenge of maintaining quality of life in retirement. The Harvard/AARP study states that, “Reverse mortgages can be particularly helpful to lower-income households holding most of their wealth in home equity. For example, reverse mortgages can be used to convert a portion of housing wealth into an income stream to help cover property taxes and insurance payments, the costs of supportive care and other living expenses. The ability to choose either a lump sum or a line of credit can assist homeowners in paying for one-time, big-ticket expenses, such as home modifications or improvements.”

Alain Valles, CRMP and President of Direct Finance Corp., was the first designated Certified Reverse Mortgage Professional in New England. He can be reached at 781-724-6221 or by email at or visit Additional articles can be read at