Senior Care Academy - A Helperly Podcast
Senior Care Academy is the podcast for caregivers, senior care providers, and families with aging loved ones. Hosted by experienced professionals, we explore essential topics like elder care planning, dementia support, financial advice, and emotional wellness for caregivers.
Each episode offers expert insights, practical tips, and resources to help you navigate senior care with confidence. Whether you're a healthcare provider, a family member supporting aging parents, or a senior adult seeking guidance, this podcast delivers actionable advice tailored to your needs.
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Senior Care Academy - A Helperly Podcast
You've Saved for Retirement, But Will It Be Enough?
Retirement planning has a serious problem: we're living much longer than previous generations, but our financial preparation hasn't kept pace. With many retirees finding themselves 45% short of what they'll need for a comfortable retirement lasting potentially 30+ years, what options do we have?
Laura Phillips, a licensed reverse mortgage specialist with over 25 years of experience, joins us to demystify one powerful but often misunderstood financial tool - the modern reverse mortgage. She tackles the elephant in the room immediately, acknowledging the product's controversial reputation while explaining how today's reverse mortgages differ dramatically from their predecessors. "It's not your grandmother's reverse mortgage," Phillips explains, detailing the significant consumer protections now built into these loans.
We explore the mechanics of reverse mortgages in straightforward terms, from how they calculate available funds (based on age, equity, and interest rates) to what happens when the homeowner passes away. Phillips brings compassionate insight to the emotional aspects of retirement planning, addressing the delicate balance between using home equity as a financial tool and honoring the sentimental value of the family home.
Perhaps most eye-opening is our discussion about financial education and America's retirement readiness gap. Phillips shares personal experiences that highlight how unprepared many of us are for financing decades of retirement, noting that even financial advisors struggle to project 30 years into the future. Her passion for helping seniors find solutions shines through as she encourages earlier, more honest conversations about aging and finances.
Whether you're approaching retirement age yourself or helping parents navigate their options, this episode provides valuable perspective on one potential strategy for aging in place with greater financial security. Connect with Laura Phillips to learn if a reverse mortgage might be right for your situation.
• Reverse mortgages have evolved substantially with improved consumer protections
• Modern reverse mortgages require both spouses on the loan and verify ability to pay taxes/insurance
• Homeowner age, available equity, and interest rates determine how much can be accessed (42-75%)
• Older borrowers can access higher percentages of their home's value
• Reverse mortgages work best when heirs aren't expecting to inherit the physical home
• The loan grows over time but has protections against going "underwater"
• Heirs can choose to sell the home or purchase it by paying off the loan balance
• Financial education about longevity planning should start much earlier in life
• A home should be viewed as both an emotional space and a potential financial tool
If you're 62 or approaching that age and thinking about retirement options, reach out to Laura Phillips at laura@lauraphillips.com or call 303-817-4611 to discuss whether a reverse mortgage might be right for your situation.
Today on Senior Care Academy podcast, we are diving into one of the most important and often misunderstood topics in retirement planning, which is financial strategies for aging well or aging at home. Joining us is Laura Phillips, a licensed reverse mortgage specialist with over 25 years of experience in real estate lending. Lara's helped countless families navigate the complexities of home financing, specializing FHA, hecm and portfolio jumbo reverse loans. She's based in Colorado and she's made it her mission to guide seniors, caregivers and families through the reverse mortgage process with clarity, compassion and strategy. Her approach is rooted in a powerful belief that a home is more than just a house. It's one of the most significant financial commitments a person will make and should support you in your best years and not hold you back. So let's welcome Laura Phillips to the show. I'm happy to have you here.
Speaker 2:Hi, thanks for having me. Caleb Glad to be here.
Speaker 1:Yeah, so jumping kind of into your personal background, you've seen people plan for retirement for over 25 years now. What was your first wake-up call about planning for the future and planning for retirement that you think people often miss?
Speaker 2:Oh, wake-up call. I think we're still in that wake-up call yeah, to be honest with you.
Speaker 2:I I think that this is a personal opinion, um, probably based on my own personal experiences is that you can't really plan for every incident that's going to happen in your life, and much less where the economy is going to go and what it's all going to cost. You know it would be very difficult for all of us to save several million dollars to put aside. So what do we do? How do we handle that and I think that's what I do best with seniors when we're talking about aging in places what strategies can we look at to help that happen? So yeah, I think that's a big wake-up call still.
Speaker 1:Yeah, yeah, I think I can't remember the statistic, because a lot of people, like you said, they spend all of their working years saving and 401k-ing and Roth IRA-ing and all the things, and then they get to retirement and they're still like this isn't going to last me the next 25 years, you know. And so I guess, as you've served hundreds of families, what would you say is the biggest misconception people have about financial stability in retirement? It could like is it the amount of money that you need, or just what might it be?
Speaker 2:Well for one. I don't think we ever thought we were going to live an additional 30 years. What might it be? Well for one. I don't think we ever thought we were going to live an additional 30 years yeah. So most of the retirements were planned probably for our parents and our grandparents and they didn't live much past their retirement years. The health you know. There were a lot of reasons on why that happened, and so if we were to retire at 60, we could live to be 90 years old.
Speaker 1:My grandpa just turned 90, last month yeah.
Speaker 2:So we need to think about that, and I think that when people look at their retirement and I love financial advisors, I think they do a fabulous job in helping people build wealth but even they will admit that it's hard for them to kind of think about what's going to happen in the next 30 years. So that's probably the biggest thing that we all talk about when we talk about what are we going to do. Why would we look at a reverse mortgage? How can it help? And one of the questions I ask is what are your plans? You're healthy now. Things are looking really good, but what happens? Life happens, unfortunately, and what do you have for plans around those scenarios?
Speaker 1:expect retirement to be? How much would you say it is on average of like oh, I've got a million saved. Or like in my whatever, that's great. How short do you think people are typically?
Speaker 2:Well, statistically they're showing us to be about 45% short.
Speaker 2:So that's nationwide I would say that's pretty individual to areas that you live in and kind of the workforce of the area that you're in. So I don't know if I could say individually what I have. I think I've seen it across the board for people who are really well, well repaired to do this versus somebody who's more in the 70 to the 45% and not as prepared. So I've seen the entire scope and again, it would probably depend on the demographics of where you are as to what those numbers really look like.
Speaker 1:Yeah, I mean, even if you're 70% prepared and you're living for 20 years post retirement, that's six years of where you're out of money, which is crazy. That's a long time to live without money. I'm curious. So, growing up, is there any like lessons that you learned from your parents that still ring true and maybe have shaped the way that you view retiring and finance and retirement?
Speaker 2:Well, I had a. My parents were kind of an interesting scenario. I don't think I will follow in their footsteps, probably because it's not an available situation for me, but they actually funded their entire retirement.
Speaker 1:Wow.
Speaker 2:I know, you know probably a rarity, to be honest with you they didn't really have a lot of trust in giving money to somebody else. I think that's a hangover from the Depression era. My parents were both early teens during the Depression, so I think that was definitely a hangover from that. And that thought pattern is, you know, keep the money within yourselves. So they funded their entire time, which was great. You know, I was really great.
Speaker 2:We were grateful as kids because none of us were really able to chip into the amount of money that it took to take dad through his—my dad had Alzheimer's in the end, and so that care is outrageously expensive, and rightfully so. I mean they are staffed 24-7. They're in lockdown situations. They need that care, but the cost is really high and we were really grateful in the end that my folks had that money to be able to do that. Had they not, it would have been a lot more of a challenge for all of us, for us kids, to be able to try to help support them through that. So, taking that lesson forward, I'm scared to death of my quote senior years, because I am not that prepared. I'm up there with the tail end of that 50,. You know, I'm not the 45, but I'm also not the 100%. I'm kind of in the middle. I look at those numbers and I think how are we going to make it? What are we going to do and I don't want to be a burden on our children if we can help it.
Speaker 1:Yeah.
Speaker 2:So, yeah.
Speaker 1:So if you had to complete the sentence, what would you say? So the best retirement plan starts with yeah.
Speaker 2:Oh, oh. This starts with admitting you need one. Admitting you need one. A lot of people think I've actually talked to some people and this was probably my parents too they didn't think they were going to die. I mean, when it actually came to that time in my mom's life because she passed first she said you know, we just figured we'd live forever. So I think starting with knowing that there is an end and to make it as comfortable as you can for yourself and for your family is a good thing to start out with. Start with that thought.
Speaker 1:Yeah, and start with that thought I would say as soon as you can in life of like, eventually I'm going is it? Is it a good thing to start out with? Start with that thought, yeah, and start with that thought I would say as soon as you can in life of like, eventually I'm going to get older. Hopefully, you know, I'll get old and I want to make sure that it's a good experience Talking through like cashflow and how retirees can unlock, like breathing room without burning into their funds. That's kind of where you come in in the reverse mortgage I feel like it's had in the past. I know it had a really bad stigma because it was like a five-year or seven-year or something, so it still didn't solve it. How have reverse mortgages changed in the last decade or two that's made it so that way? It's something that people should more seriously look into.
Speaker 2:It does have a negative reputation, something that people should more seriously look into. It does have a negative reputation, and that's definitely an elephant in the room.
Speaker 2:If you were to say to somebody I'm thinking about a reverse mortgage, they would get out garlic and say run for the hills because of that reputation and it's the Reagan era. And so when it first came out there were a lot of aha moments they didn't think about. They didn't think about in that time period. They put the man on the loan because he was traditionally the bread earner the money earner.
Speaker 2:And they didn't put the wife on the loan, and so when he passed which was also a traditional thing it's the male pass first, particularly that age group. She was on the street, literally. She was a widow on the street.
Speaker 1:It was like oh let's think about this.
Speaker 2:So they've made a lot of corrections to make it. What I say is not your grandmother's reverse mortgage. Both parties are on the loan. We work with the youngest person's age to make sure that the youngest person has viability to be able to stay in the home comfortably. Another thing that they never gave a lot of thought to, but now do, is can you afford to pay your taxes and insurance? And one of the few ways that you can actually lose your home with a reverse mortgage is not paying your taxes and insurance on time. So it's a lien that goes ahead of all loans, and a reverse mortgage is a loan, so it would cut ahead of that, and no lender likes that at all. So again, they didn't think about that. They didn't look at people's income and say, gosh, can they afford to do this? Can they afford to pay the taxes and insurance on their own? Those are the two biggest changes that I've seen in the product that make it a much, much better product for people today.
Speaker 1:How much? I guess it totally depends, because if they bought like my grandpa bought his house like basically, or it was even gifted to him maybe 70 years ago when he first got married gifted to him maybe 70 years ago when he first got married. So he has zero, like it's been paid off for forever. So when he, if he were to do a reverse mortgage, he could pull out hundreds of thousands of dollars compared to somebody that maybe bought their house 10 years ago. But what kind of flexibility or like buffer does on average, would a reverse mortgage give to somebody?
Speaker 2:Well, actually with a reverse mortgage I'm reverse mortgage especially if I've had my book in front of me, of course not, sorry. So remember in high school you probably worked with logarithm tables In the back of the book you go over and down. It's kind of a mathematical formula. It's the same with a reverse mortgage the older you are you will get more money accessed to, or more access to your equity. The younger you are, you get less. I call them three gears that turn together to calculate actually how much you can have. One of them is your age, one of them is that the house is free and clear or how much equity is actually available. If you have a loan, you pay that off and then that's what is accessible. And the third one is the interest rate. So all three of these gears turn together to tell us how much of a principal balance you're allowed to have.
Speaker 2:But the bottom line is the older you are, the more you're able to get. The younger you are, the less. So at, somebody that's 62 years old probably would only get about 42%, 43%, depending on the interest rate. Again, that's a big piece in this. Higher the interest rate, unfortunately, the less you could have. Lower the interest rate more, and that goes up to about 75 percent. My oldest loan person was 92, and his house was free and clear. He wanted to use the reverse mortgage as a legacy for his children. He had enough funds. He felt like he was going to be able to handle his care, what was left of his years his care. So he used his reverse mortgage as a legacy for his kids and he was able to get about 73% of the value of his home. That's awesome.
Speaker 1:Yeah, and I guess it makes sense on the age thing, because you don't want some 63 year old to get 75% and then go and splurge it in their first two years and then all of a sudden they don't have any.
Speaker 2:That actually did happen up until when President Trump was the president first go around. They were able to. People were able to get about 70% earlier on and so that got a big haircut with his administration that first go round to actually prevent that from happening, to prevent the house from going. We call it upside down, where the house is worth less than the mortgage, and that was so. Yes, the numbers now are considerably less than they were 10 years ago.
Speaker 1:My other question is so say that I get a reverse mortgage at 70 and I live until 90. Obviously there's lots of appreciation that's happening in the house in that time, and so is it similar to a regular mortgage where you're refinancing every few years with the appreciation. Does it kind of like? If it's appreciating 3% every year? Does it just add an additional 3% automatically? How does that all work?
Speaker 2:Well, I will say this is not a loan that I think should be churned. That's where you refinance it every few years.
Speaker 2:It's a forward loan, which we've all done, and we look at, we chase interest rates down. We're very big on that. We do that but this is an expensive loan. I'm not going to lie. There are some good reasons for why it's expensive and there are good protections behind it, but it's something that I would say don't consider it your last loan that you'll ever do, but consider it a loan that you would maybe only do one other time. I think I've answered that question pretty well, if I didn't get me back.
Speaker 1:Well, you answered the refinance part of it. As far as the appreciation over the 20 years, how does that work out?
Speaker 2:We work with a nationwide average of 4%. Now a lot of us have seen in the last three years fabulous, fabulous appreciation in our areas.
Speaker 2:Those are anomalies, I'm going to tell you. We would love to see that, but that's just not going to happen forever. So we work with a nationwide average of 4%. Now what happens is it is a negative amortization loan and it's a big word, and what that means is that the loan balance grows. You're not paying anything on it. It's a loan where you do not have to make any monthly payments, but the interest gets accrued. It is a bank loan, so they're going to collect the interest and they're going to tack it on to the balance. So each month the balance or each year the balance grows. Now does that grow at 4%? That's going to grow at the interest rate.
Speaker 2:One of the types of loans there's two. There's a fixed rate and a line of credit. The line of credit has an individual growth that will grow at about the same as the interest rate. So it's kind of confusing to think about. But what happens is if you get a loan at, let's say, 70, will I see it go upside down at some point in that lifetime of the loan? The answer is yes and it will probably be in the mid-90s or longer. So I think that's really the question you're looking at and the reality is yes. So if you started at 60, very possibly you're going to see that happen, you bet.
Speaker 1:Yeah, that's awesome. And then all of it's with the assumption. I guess not the assumption, but once the individual dies, or the partnership dies or passes away, it's assumed that the house will just be sold off. The bank will sell the house, or I guess the kids could buy it at that point. I know that was one big barrier that I've seen with people with reverse mortgages. That was one big barrier that I've seen with people with reverse mortgages. It's like I was supposed to you know, that was my retirement thingy and the kids kind of get maybe selfish around the use of a reverse mortgage Cause they're like that's my inheritance, you know.
Speaker 2:Well, people are funny about money. So you know, I try not to go there.
Speaker 2:I actually don't have a degree in therapy. I feel like sometimes I should have one. It helps. But yeah, and so if you're planning on giving your house to the children and you would like to have it be free and clear, like your grandpa got his house free and clear, then the reverse mortgage is probably not the loan to look at. I'll be very honest with you, because at some point it's still a loan. It needs to be paid off. Honest with you because at some point it's still a loan. It needs to be paid off.
Speaker 2:Now, what happens if both husband and wife or the parties involved in the reverse how many there are if they pass away? What happens? It goes to the estate. The bank doesn't own your home. It's a lien against your home, just like any other loan. So you still have full ownership of your home and it goes to the estate. Now, if there's money left in the house the house has value still then the heirs can sell it or they can buy it. They have those choices and they have a time period to put it on the market and sell it. Pay off the reverse mortgage. If the house is worth less than the loan, then you give the keys back to the bank and there's no fault, no harm. Nobody's going to come after anybody in any of the estates and ask for additional money, and that's where the loan gets expensive. Is that particular insurance that covers?
Speaker 1:that Kind of switching a little bit more to the the emotional side of things. You've said before that it's not just a house, it's a home. So how do you balance the emotional weight that it carries of like being a home with the practical financial reality of how valuable a reverse mortgage can be, even though maybe it means that for the next generation the home's not in the family, or something like that?
Speaker 2:That's a tough call. I mean, my husband looks at the house more as a home. I look at it probably because of my business and my career. I look at it as a financial tool and should be used as such and with stewardship of handling it as a financial tool. So a lot will depend on it.
Speaker 2:If the history of your family and the culture that you have grown up in is to get grandma and grandpa's house and to hand it down, then, as I said earlier, a reverse mortgage is probably not the best loan for you. There probably should be better ways to look at pulling out equity. It's hard to pull out equity, as I say, to punch a hole in the wall and pull some of that equity out. You have to be able to cover the cost. But if you look at it as my kids are settled they don't even live in the same state as I do do they want the house? Probably not, probably not. Would they like the money? Yes, they would probably like the funds.
Speaker 2:There's a reality to that statement. Then maybe a reverse mortgage looks at funds. There's a reality to that statement. Then maybe a reverse mortgage looks at that and then we can talk about that. That's where I think I bring a lot to the table. When I visit with a client, I sit down and ask you want to give your kids some money? You want to leave it? Well then, let's look at how much you really want to pull out in equity and how do you want to handle that.
Speaker 1:Now, once you have the that, they just don't go out and buy a yacht and a boat and a airplane, they can go.
Speaker 2:Oh, you're right, we need to think about this, because we do want to leave the children some money Maybe it's not the full about, but we also don't want the kids to pay for us, so it's it's and reality.
Speaker 1:It's saving the kids money, right? If they're, it's saving them, it's maybe taking the future money, but saving them needing to pay actively throughout retirement for things that are expensive like Alzheimer's care and home care and all the things. So it's definitely a good option. We've got a handful of minutes left, but if you could overhaul the way that we teach retirement prep in America, what would you want to change? First, I didn't learn about retirement prep in my financial ed class in 10th grade.
Speaker 2:And I think that maybe it even goes beyond retirement prep, as it is financial stewardship of money. They didn't teach that in my school. When I was in school, I didn't know how to balance a checkbook oh my God, I mean, I got math, I could add and subtract, but nobody said I was supposed to do that on a daily basis with my checkbook. And so I think financial education should be part of the education early on, and maybe a class somewhere in high school or college, wherever you are, that it does teach you what it's going to take to live, to be 90 years old. And we don't talk about that at all in this country, and I'm not sure they do in other countries either, but I can speak to what we do speak about here in America is that we don't talk about living that long and what that means, and I think it's a conversation that should be out there.
Speaker 1:Yeah, a lot of the people that we've had on this podcast talk about how it's something that people don't think about until it's almost too little, too late, because it's like, oh crap, I'm 69, 70 now and my body's slowing down. I guess I should think about this and it's like way too late at that point. And then you see people working at Walmart until their late 80s. You know like it's really hard and the life that they could have had if they started thinking about it at 50, 40, 30. So, looking back at your own journey of being in this space, what does financial peace mean?
Speaker 2:to you now compared to 25 years ago when you really started all of this. Well, there's some huge aha moments as I meet with seniors, I will say and some of them are pretty heartbreaking I mean, I can't do loans for everybody and there's some scenarios that really break my heart in sadness of not being able to help. And I think again I'm of a generation, I'm a boomer. I'm of a generation that wasn't taught to think about this and we probably thought as boomers we were invincible and would live forever also, so that's been the biggest thing to learn. So am I behind the wheel of trying to catch up? Absolutely, I'm just like almost every other boomer out there, looking at what can I do in my own household to make my health better, my own personal health better and stronger, to be able to live as well as I can, and I think that's the things that I've seen the most, that I didn't my 30-year younger person didn't know at all.
Speaker 1:Yeah, I love that. This is kind of a fun one. But let's say you're looking at retirement down the road. What is you? Have your finances taken care of? What is a perfect retirement day for you? What does that look like? Where are you at? What are you doing? Who are you with?
Speaker 2:Wow, I think I'll probably. I love doing my work, so I don't know if I'll ever really retire. I have the opportunity to work as much as I want or as little as I want, and so it's the perfect blend.
Speaker 2:And so will I ever see a full retirement? Probably not, but I will probably take more time off. And what do I see that? I see that with my husband and my two goofy German shepherd dogs on the beach somewhere where they're chasing seagulls, and just in the sand and making just a muck of it. I love the ocean, I love hearing the ocean. It's so soothing to me, and that's funny because I live in the Rocky Mountains.
Speaker 2:There's no ocean here at all, but that would be my ideal world. If I could have that, that would be it.
Speaker 1:That's awesome. I love that. Last two questions is one what are you most excited about in the space or for your next few steps that you're working on?
Speaker 2:Next few steps Excited for me. I love being able to be on podcasts to talk to people about reverse mortgages. I feel like I'm a one-woman band cheerleader. Look at it, consider it. It's not that bad. It's really a great financial tool if used and thought about well. Find somebody to work with that's going to take the time to step you through and ask you those tough questions like what happens if your spouse gets Alzheimer's? What happens if, all of a sudden, you have to take medicines that are not covered by your insurance and are horribly expensive? Let's talk about the things that we don't want to talk about and be able to start addressing them. If I can do anything, I would love to see more of that out there for seniors so they can really address their needs better.
Speaker 1:I love that. And then my last question is who should reach out to you and where do they find you? And we're going to put all that onto the Absolutely. And where do they find you? And we're going to put all that onto the Absolutely, absolutely.
Speaker 2:Well, I would say anybody who's 62 or almost 62 years old that's thinking about retirement, reach out to me, let's talk, let's have a conversation. I'm pretty easygoing. I'm not a salesperson in any form or fashion. Let's just look at the numbers and I've had people that have talked to me for five years in a row and have not done the reverse yet. But we're having a conversation. When is the best time for that party to do this product? That's all I want people to do is to think about when is the best time to look at this product for their needs. How do you reach me At laura at lauraphillipscom for their needs? How do you reach me At laura at lauraphillipscom that's with two vowels for Phillips, or you can call me 303-817-4611. I do answer by phone.
Speaker 1:I'm it, I'm it. Awesome, yeah, awesome. It's been really insightful, learning a lot because I've had reverse mortgages have been a little bit of a black box for me. I've heard about them, I've heard good and bad, and so it's been fun diving into this with you, laura. I appreciate you taking some time.
Speaker 2:Thank you, caleb, I do too.
Speaker 1:Thanks.