Wednesday, September 07, 2011
Seniors hobbled by debt, especially lower home values
The Wall Street Journal today has an important subscriber article “Debt Hobbles Older Americans”, by E.S. Browning, link here.
The single biggest problem for many seniors is their upsidedown mortgages, or at least lower home values, that would hinder getting effective reverse mortgages.
And far too many seniors are withdrawing 401(k)’s too early and paying penalties. And their kids could wind up on the hook.
Here’s another wrinkle. Sometimes older Americans do inherit houses as parts of trusts from even older parents. But as long as a house remains in a trust, you can’t take out a reverse mortgage. You have to sell it in a bad market and live in something else.
I still think that the “free market” can do a much better job of building more CCRC’s. I would think Trump would get into the business. Maybe this would be a good job for the next “Apprentice.”