Elder financial exploitation crosses all social, economic and cultural boundaries. Older Hispanics, like other older adults, increasingly are targets of financial abuse and scams by a broad spectrum of perpetrators. A 2012 study found that 17 percent of Hispanic seniors are victims of financial exploitation, and that limited English proficiency is a factor that contributes to the vulnerability of older Hispanics.
Nearly 1.5 million – or two-in-five- older Hispanics have limited English language proficiency and speak Spanish only. Their limited access to trusted information and resources in Spanish hampers their ability to detect, respond to and report abuse.
We have Spanish versions of two resources that can help Spanish-speaking seniors, their family members and other caregivers, and the professionals and organizations that work with them:
- Money Smart para Adultos Mayores (Money Smart for Older Adults) – an educational program with the FDIC that teaches older adults and their caregivers how to spot scams and frauds, and prevent financial exploitation. The translated guide can be used as a self-study guide or delivered as a training in a group setting.
- Cómo Administrar el Dinero de Otras Personas (Managing Someone Else’s Money) – a set of four guides for financial caregivers—government fiduciaries, agents under power of attorney , guardians of property and trustees —to help them understand their duties, and how to prevent and respond to financial exploitation.
More and more homeowners are considering tapping their home equity as they approach retirement age. Getting a reverse mortgage is one way that some older homeowners can do that. Reverse mortgages are a special type of home equity loan sold to homeowners aged 62 years and older, which are repaid when the borrowers sell the home, move out, or die. It’s a complicated type of loan that works best for homeowners who carefully consider all of their options.
Things to consider
Before borrowing, seniors and their families should consider:
- The cost of homeowners’ insurance and taxes
- Plans for staying in the home or leaving it to family members
- Plans for dependents or others living in the home
- Alternatives to reverse mortgages
Because some important things about reverse mortgages have changed recently, we’ve updated our guide to reverse mortgages.
First-year payout limits
One of these changes limits the amount of money you can draw from your loan in the first year. Borrowers often get into trouble by taking a lump-sum payment early on. It may feel great to get a big payment up front, but borrowers can outlive this money – which spells financial trouble for borrowers who live longer lives.
This limit encourages borrowers to make their money last longer. Borrowers can still take out lump-sum single payments – but this is still a risky choice. Borrowers should strongly consider the monthly payment or line of credit options before choosing to get a lump-sum. These options provide more long-term security than lump-sum payments.
Protections for non-borrowing spouses
Another important change is for couples considering a reverse mortgage. In the past, couples who took out a reverse mortgage loan in the name of only one spouse ran into trouble when the borrowing spouse passed away. When a borrower died, the “non-borrowing spouse” had to pay back the reverse mortgage or move out. Many surviving spouses were surprised to learn this, and lost their homes. With recent changes, a non-borrowing spouse may be able continue to live in the home under certain conditions, even after the spouse who signed the loan passes away. However, the non-borrowing spouse will still stop receiving money from the reverse mortgage after his or her spouse dies.
For couples considering a reverse mortgage, borrowing together makes more sense. If both spouses sign the reverse mortgage, then the surviving spouse can continue to receive monthly payments or use an existing line of credit. It also ensures that a surviving spouse may live in the home after his or her spouse (co-borrower) dies.
These changes help protect reverse mortgage borrowers, but make no mistake—reverse mortgages are still not right for everyone and can be risky and expensive. If you’re considering a reverse mortgage, get the information you need to make an informed decision and give yourself time to weigh your options.
Check out our guide to reverse mortgages for older homeowners and their families.
Whether you’re one of the millions of workers who pay Social Security taxes or the 50 million retired Americans and dependents who receive benefits, it’s good to keep track of your Social Security benefits.
National My Social Security Week takes place August 17 to 23 — the perfect time to take a step toward creating an online account with the Social Security Administration at www.socialsecurity.gov/myaccount. This account will give you secure and convenient online access to your personal Social Security information, including your earnings records and estimated benefits. If you already receive Social Security benefits, you can change your address and phone number, get a benefit verification letter and start or change direct deposit information.
This website has information to help you plan for your future and protect your finances with:
- Estimates of your monthly retirement and disability benefits, including how much more you could get if you delay your retirement.
- Estimates of monthly survivors’ benefits for a spouse and children.
- Essential information needed to create a retirement budget, make decisions about other financial resources, and even decide if delaying your retirement is the right choice for you. This is helpful if you’re among the thousands of people reaching age 62 and making decisions about whether to claim Social Security.
- Summary of your earnings and Social Security taxes you’ve paid. Because your Social Security eligibility and benefits depend on these factors, this gives you the chance to check that the information on your earnings record is correct. You could also spot fraud or misuse of your Social Security number. In fact, opening an account prevents others from doing it without your authorization.
Creating a my Social Security account online is quick, safe, easy, and free. Set yours up today!
We’ve heard a lot of stories about vulnerable adults falling prey to con artists, family members, fiduciaries, and professional advisers who steal their nest eggs and threaten their financial security.
A son steals $315,000 from his elderly mother’s retirement accounts and frequents casinos. When he doesn’t pay his mother’s rent, she’s evicted from her assisted living facility.
The pastor of a 77-year-old man with Alzheimer’s and Parkinson’s diseases makes 130 withdrawals from the man’s bank account but fails to make nursing home payments on his behalf for nine months. The man was nearly discharged from his nursing home.
These stories are all too common. We’d like to equip assisted living and nursing facility staff with the know-how to prevent and spot the warning signs of abuse, so we’re releasing a guide to protecting residents from financial exploitation.
Our action-oriented guide gives staff the tools to:
- Prevent financial exploitation and scams by educating staff, residents, and family members about warning signs and precautions
- Recognize, record, and report financial abuse as early as possible using a model protocol and a team approach
- Get help from first responders in the community
What you can do
If your family member or friend lives in an assisted living or a nursing facility, share this manual with the administrator and professional staff. You may want to read it as well to learn some of the signs of financial exploitation and where to go for help.
Some signs of abuse
Here are some warning signs that a long-term care resident is being financially exploited or abused:
- Possessions disappear from a resident’s room or apartment
- Resident pressured to make a decision or sign a document “now”
- A previously uninvolved person claims authority to manage a resident’s care and/or finances but does not provide documentation
- Unpaid facility bills
- Resident’s checkbook or check register shows checks made out to “cash” frequently or check numbers out of sequence
- Frequent or costly gifts to facility staff or volunteers
Compared to a decade ago, there are fewer older homeowners who own their homes free and clear. Older homeowners are also carrying more mortgage debt. While the share of older homeowners with a mortgage increased from 22 to 30 percent between 2001 and 2011, the median amount of their mortgage debt grew from about $43,400 to $79,000.
For many of the roughly 4.4 million retired homeowners with mortgages, making monthly mortgage payments on a fixed income on top of other monthly expenses is a hardship. You can read more in our snapshot of older consumers and mortgage debt.
We’ve got some things you can do to keep your retirement plan on track.
1. Plan for your mortgage pay-off date
For most older homeowners, maintaining their home is their largest expense during retirement, especially if they carry a mortgage. Making your mortgage pay-off date a part of your retirement plan will help you to manage and afford your housing costs.
For some, owning their home free and clear allows them to handle their monthly expenses and have a reserve on hand in case a financial emergency arises. Aiming for a mortgage payoff date that is earlier than your planned retirement age can help you manage expenses if your income decreases unexpectedly. While carrying a mortgage in retirement may not be a hardship for everyone, it’s always a good thing to include your mortgage pay-off date in your retirement plan.
Before paying off your mortgage, you may wish to discuss any tax and estate implications with your attorney, tax accountant or other financial professional.
2. Be careful when getting a new mortgage, refinancing, or tapping into your home equity
Many consumers take on new loans or refinance their existing mortgages to get a lower interest rate and/or monthly payment. Pay attention to the term of your new mortgage as it can affect your retirement plan. For example, taking on a new 30-year mortgage when you are nearing retirement can become a hardship later. Consider choosing a shorter-term mortgage, such as 10 or 15 years, when refinancing or buying a new home when you are close to retirement. You’ll have higher monthly payments now, while you’re still working, and be less likely to still have a mortgage in retirement.
If you’re considering getting a home equity loan or a reverse mortgage, you should revisit your retirement plan. Some people use their home equity to pay for varied expenses, such as home improvements, consolidating debt, medical bills or college tuitions. Consider how you will pay for unanticipated expenses in the future if you draw down on your equity now.
Using your home equity to consolidate credit card or other debts can be risky. A home equity lender can foreclose on your home if you miss payments.
3. Estimate your retirement income and expenses
Generally, people have less income when they retire. Retirement income (from pensions, social security, annuities, and other savings) typically won’t fully replace your work earnings. One study estimates that half of retirees without a pension will receive less than 65 percent of their pre-retirement income.
Knowing your expected retirement income and expenses is important, especially if you’re retiring with a mortgage. You’ll be able to plan and budget for your mortgage payments and other living costs, even if your taxes, insurance, and other housing costs go up.
Some expenses to keep in mind:
- Older consumers often spend more for their health care and/or long-term care needs later in life than in their younger years.
- Monthly mortgage payments on top of paying other monthly living expenses can pose a hardship or prevent you from meeting your retirement lifestyle goals. In 2011, older homeowners with a mortgage spent $800 more per month than their counterparts with no mortgage.
- If you plan to age in your home, you may need to pay for home modifications. Adapting your home to age in place can cost thousands of dollars.
Resources to take action
Get your questions answered. We’ve got answers to your questions about mortgages and other topics.
Get help. If you’re behind on your mortgage, or having a hard time making payments, we want to get you in touch with a HUD-approved housing counselor. We can help you find housing counselors near you.
Start making a plan. Calculate how much you’ll need and how to budget for retirement.
Submit a complaint if you have a problem with your mortgage. You can submit a complaint online or by calling (855) 411-2372 or TTY/TDD (855) 729-2372. We’ll work to get you a response from the company.