The Success Of The Baby Boom Generation

The Baby Boom generation has played a major key in the American economy over the past 50 years. More importantly over the past 30 years as these individuals have come to age and began leading society they have been the main driving force for the economy, “In their heyday, the boomers were an unprecedented economic force, pushing up rates of homeownership, consumer spending and, most important of all, employment. (Casselman 2014)”. This generation makes up a key number of population in today’s society. This paper will look at the positive and negative effects that the group has had in the American economy and how economists plan future projections from the impact of the group. Retiring age for this group has hit or is fast approaching is the economy set for a steep decline because of this or can it maintain status quo?

In 2008, 78 million baby boomers will turn age 62 and qualify for a reverse mortgage. These seniors have 4 trillion dollars in home equity available to them in an illiquid asset, their house. In fact, these retirees have 50% of their net worth tied up in their homes. Estimates indicate that there is a target population of some 15 million senior households that both qualify for and are good potential candidates for the Department of Housing and Urban Development 's home equity conversion mortgage (HECM)program. The HECM is when a lender advances, a senior age 62 or older and a current homeowner, money based on the houses equity. The senior homeowner can take the cash as a monthly payment all at once in a single lump sum of cash, as a

On the flip side, if there is equity in your home and you wish to sell or refinance it you keep the equity, not the reverse mortgage lender. The same holds true for your heirs who may choose to refinance the home and keep it or sell it and get its equity if the home value is greater than the reverse mortgage payoff. In the vast majority of the time the home still has equity remaining when the borrower passes away. For more information explaining how the equity growth works see "what will happen to my equity"

“The American Dream” of homeownership is still a central ideal of American culture but for Millenials it is a dream worth deferring until their own personal goals are fulfilled. More and more millennials are hesitant to invest in owning a home as they pursue entrepreneurial, educational and professional goals before having children and expanding their living space.

If you're near retirement age, you might be looking into information about a reverse mortgage on your home. A reverse mortgage allows you to get the equity out of your home so you have extra funds for retirement, and the benefit is that you can continue living in your home. Here are a few things you may want to know.

A retirement crisis can be seen looming on the horizon. Countless financial writers have interviewed analysts and actuaries documenting studies showing a large percentage of American workers will be financially unprepared for retirement. The effects will be devastating for an aging population facing increasing life expectancies. The cost to the U.S. economy and to those still working to support the financially

A reverse mortgage could prove to be the best solution for seniors who have plenty of equity in their homes and little savings to handle their day to day living expenses. Since a reverse mortgage does not require any monthly payments, the money which seniors receive does not create any new financial obligations.

To Retirees Who Dream To Be Mortgage Free For Life But Unable To Get Started

Most of the seniors fix their core focus on the "reverse mortgages". No doubt, it is a trustworthy resort for the seniors after the retirement. This aspect will give them the liberty to live freely and without any dependence. The difference is the rates that are associated with these mortgage options. They sing a different tune.

Data is cited showing that, in an aging population, individuals rely on state support in their retirement years. Suggested policies include financial literacy programs, delayed retirement, automated personal saving, and financial advisory reform. Nishiyama et al. (2014) proposes that a key problem regarding personal savings, assets, and retirement are the very state funded programs designed to help retirees. The research concludes that median income levels among the Boomer generation will not be able to support it’s level of “consumption based on it’s own assets” (Nishiyama et al. p. 65) in the retirement years. In conclusion, this study asserts that the financial education and reflexive retirement delay components provide the most broad and effective measures to mitigate budget shortfalls in an aging

ratio over 40% is considered troublesome. Also, compared to the 1995 and 2004 pre-retirees, the 2013 pre-retiree’s debt-to-income ratio exceeds the previous cohorts. However, the mean monthly total debt payment is lower for the 2013 cohort as compared to the 2004 pre-retirees. This may be a direct result of the decline in income for the 2013 cohort. In addition, the mortgage debt-to-income ratio for the 2013 pre-retirees increased over the measurement periods between 1995 and 2013. Moreover, the mortgage debt-to-income ratio for the 2013 pre-retirees increased as compared to the 1995 and 2004 pre-retiree cohorts. This observation provides evidence that the current group of pre-retirees has increased their mortgage debt over time and they

Reverse mortgages are a revolutionary way of achieving financial freedom while on retirement. It does not put strain on the individual through payment of costly monthly installments, and provide a person loved ones with a cushion incase anything goes wrong. It also has lower interest rates. Despite the fact that it is one of the loan products that fits well for senior citizen, numerous people do not understand how it works.

You can use a reverse mortgage as a retirement tool. Which is better, a home equity line of credit or reverse mortgage?

Keep in mind that baby boomers were the first generation to grow up on television and credit cards (O 'Neill, 1991). Lusardi (2009) noted that most individuals deal frequently with credit cards and other forms of borrowing yet only a minority of individuals possess basic financial knowledge about debt. The previous generation used credit as the ultimate last resort while baby boomers were conditioned to be much more comfortable with credit. For many baby boomers, their idea of saving is buying more to receive a discount on the purchase. The concept of saving first and paying cash has been replaced with the concept of you can have anything your heart desires today as long as it is within your credit limit. More financial education in this area may be a way to prevent a future financial crisis. For immediate results, this education can be provided by financial advisors. As financial planners work with their clients to examine their income, expenses, assets and liabilities, the numerical ability of consumers can be enhanced, thus potentially reducing the number of future foreclosures on homes.

In answer to "what is reverse mortgage", this is actually a private type of loan but one that is insured by the federal government. What makes a reverse mortgage unique is that a portion of the equity in the home is converted to cash, which can then be used by the homeowner in whatever way they see fit. Because qualifications and restrictions are associated with a reverse mortgage, it is used by the elderly, many times as a means of financial security.