As states across the country enacted social distancing to
stem the devastating impact of Covid 19, unemployment rose to heights not seen
since the Great Depression. A byproduct
of nearly 40 million lost jobs was the reaction by banks.
Rates have been dropped dramatically, making the cost of
credit extremely low. This is fantastic
for businesses but not great for consumers.
Because banks, seeing the jobless rate balloon, are concerned about the
ability of individual borrowers to repay loans.
So, banks across the country have increased thresholds to access their
money. This is impacting credit cards,
personal loans, mortgages, and home equity loans.
For example, despite credit card rates being at a three
year low, according to CNBC, over 50 million credit card customers have either
seen their account spending limit reduced or had their accounts closed
altogether. Non-secured personal loans
might be possible but require high credit scores. Some mortgage options, like cash out
refinances and jumbo fixed-rate mortgages, have been eliminated. Other products require 20% down and a minimum
700 credit score.
Home equity loans, or Home Equity Lines of Credit, have
not been spared. Giant national banks
like Chase and Wells Fargo have temporarily frozen their home equity
products. Even when they’re available,
credit score requires have increased by nearly 10%, according to BankRate.com.
How does this effect you?
Clearly overall access to cash is severely limited. And, as a homeowner hoping to use their
equity as collateral, banks are increasingly a limited resource. And, even if they are, loan recipients are
required to pay fees and ongoing interest.
Fortunately, that is not the case with SmartRE.
We only charge a low, one-time fee when your home equity sells on our platform. We never charge interest. We have no payback period and no inheritance issues. And access to our buyers requires no minimum credit scores or income. All you need is ownership of 50% of the value of your home. Visit We Can Help to learn more about our process.
Work is a constant challenge that keeps your mind sharp. Whatever your occupation, you needed to both think on your feet and spend time in contemplation. Logic, math, science – whatever the subject we swore we’d never use again when learning them in school – were ubiquitous despite our incorrect assertions. But once you stop working, that is no longer the case. Problem solving is often times a thing of the past. That’s why, no matter your age upon retirement, it is important to find a hobby. Why? Because hobbies replace the mental manipulation that was a minute by minute fixture of your working days.
The key is to do something that keeps your mind sharp. Because using your head has multiple benefits.
According to the European
Journal of Epidemiology, which reviewed recent studies done in the US and 12
European countries, the memory problems are correlated to age of retirement –
the earlier one retires, the more likely they are to eventually have memory
issues. One study showed that short-term
memory decreased 40% faster once employees retired. So consider a hobby that places a barrier to
stop the erosion of mental acuity.
Kelly Lambert, a University of Richmond neuroscientist,
likens working with the hands to pharmaceuticals because the actual neurochemistry
of the brain can be positively altered through craftwork. In addition to cognitive benefits (the
Journal of Neuropsychiatry showed that crafting, playing games, and reading
books could reduce the chance of developing mild cognitive impairment by 30 to
50%), crafting is used to treat soldiers with post traumatic stress disorder;
CNN reported one study showed 81% of over knitters with depression reported
feeling happy after knitting. 50% felt
In another study from University College of London, Dr Daisy
Fancourt found that basketwork conducted by stroke patients helped re-establish
neural pathways and improve brain plasticity.
It can do the same for people suffering from dementia. Creativity can be used to control emotions,
to boost self esteem, and as a means of reflection and contemplation.
Gardening has similar positive impacts. According to a study called “The benefits
of gardening and food growing for health and wellbeing”, gardening reduces
dementia risky by 36% in people aged 60 or older. A bacteria in soil releases serotonin, a
natural anti-depressant that strengthens the immune system, into the brain.
AgingInPlace.org is a website whose goal is to help people
stay in their home as they age. They’ve
actually been able to identify specific benefits for different types of
hobbies. Music helps to reduce blood
pressure and elevate mood. Meditation helps
induce positive outlook and reduce anxiety.
Reading, and recounting what has been read, is a significant means of
improving cognitive ability. Problem
solving, a constant during everyone’s careers that is typically lost upon
retirement, can be replaced through working puzzles. They also reduce blood pressure and heart
rate, while 3D puzzles especially improve manual dexterity. Research reveals that playing brain games
delays dementia’s onset in older people.
Hobbies are critical in retirement. But they often don’t come cheap. Woodworking requires tools. Car restorations require expensive tools,
materials, and, of course, cars. Art
work like sculpting, painting, and pottery typically require retrofitting kids’
old rooms into studios and have their own equipment and material costs. So approach your hobby the SmartRE way – use
the money frozen in your home equity to fund your retirement hobbies.
“The best way to find yourself is to lose yourself in the
service of others.” — Mahatma Gandhi
Everyone has heard the reason – I’m traveling to find myself. A great place to look is through providing service while traveling, because it combines the thrill of exploring the unknown with the fulfillment of helping those in need.
Initially, the idea of volunteering abroad might be
intimidating. But consider the
benefits. You are literally broadening
your horizons, seeing new places but connecting in an intimate and personal way
that can never be matched by mere touring.
You are immersed in local culture in a way that normal tourists can
never hope to experience. With
volunteering, unlike a monetary donation, you know firsthand how your
contribution is being applied. And just
by telling your story to others when you arrive home after your excursion,
you’re helping to bridge the divide in understanding that can exist.
And you can do it without going overseas. AmeriCorps says “AmeriCorps is your moment to
take the path less traveled, to break the status quo, to stop talking about the
problem and be the solution.” AmeriCorps
State and National has programs as short as 3 months. Projects include disaster services, environmental
impact, and veterans and military families.
The Peace Corps isn’t just for recent college graduates.
“Retired Americans can use the life skills and professional experience they
gained during their careers to make a lasting impact in communities around the
world,” says Peace Corps Director Jody Olsen.
About 6% of Peace Corps volunteers are over 50. The oldest is 93, working in Malawi. housing is paid for and volunteers get enough
of a stipend that they don’t have to dip into savings set aside for retirement. Approach with an open mind, because the Peace
Corps isn’t for everyone. Living is
rougher than American standards and there is a significant time commitment.
Fortunately, there are many opportunities for travel and
service that are much shorter and a more comfortable.
Discover Corps is an organization that combines vacations
abroad with service. Trips target
Wildlife & Nature, Festivals, Cultural Explorations, and Custom Travel to
places like Hawaii, the Galapagos Islands, and Thailand.
Build Abroad is like a global Habitat for
Humanity. Volunteers construct homes,
schools, or better infrastructure in places like Nepal, and Costa Rica.
GVI is an organization committed to providing
high-quality and sustainable experiential and development programs in 13
countries around the world. Volunteers
travel to places like Ghans, Laos, Fiji, and Greece to work with children,
marine life, or in public health.
Go Overseas is a website that acts as a clearing
house for global volunteer programs.
They have projects in countries like South Africa, India, and
Global Volunteers is the highest rated volunteer
abroad program since 1984. They have a
multitude of service projects, including computer literacy, gardening,
nutrition and teaching. Their programs
are all over the world as well – 13 counties including China, the Cook Islands,
Poland, Cuba, Vietnam, Tanzania, and St. Lucia.
volunteerism is a commitment of both time and money. Be prepared to be away from home for weeks at
a time and to pay a four or sometimes low five figure amount. And since these programs are addictive, with
many people pursing several trips a year, the cost adds up. But it is a cost that is more than worth
it. So use SmartRE to fund your
adventures. With only a low, one-time
fee, you can free cash locked in your growing home equity and put it to use for
you and the world.
According to USA Today, 34% of people approaching retirement
intend to spend their time pursuing hobbies.
But, since most people have spent their pre-retirement time working and
raising a family, there was never enough time to commit to hobbies. So what choices are there?
Whether you like to spend time alone or with others, inside
or outside, or saving money versus spending money, there are a lot of wonderful
things to do to occupy your time.
Because studies show that maintaining a routine, even if it is not as
robust or strict a routine as your former workday, is critical to a healthy
‘Making’ is a term that covers creating with your
hands. Artwork like painting, drawing,
and sculpting, craftwork like crochet, scrapbooking, or knitting, and shopwork
like woodworking or working on cars are all hobbies that fit within the ‘making’
category. Working with your hands has
multiple benefits, not least of which is the finished product. The gratification of a beautiful (to just you
or to everyone) piece of art makes the hours of effort pay off.
If making is too much, try finding. As in finding treasures at swap meets, flea
markets, or arts conventions. You can
build collections like car parts or comic books or lamps or thimbles or movie
posters or lunchboxes, or dabble across categories, but the thrill of the hunt
drives ‘pickers’ to find that item that others overlooked or even trashed. Building your knowledge so you can spot the
needle in the haystack is a constant driver, and you’re always on the lookout
for something you’ve never seen before.
Keep your mind active through continuing education. You can do something close by at a nearby
parks and recreation center or community college, you can go a little further
to a four-year university’s “learning in retirement” program. Many schools offer UBRC, or university based
retirement communities. There you
immerse yourself in the college experience – with people like you – and live in
a campus-like facility with events, gyms, and classes all a walk away.
Go global and combine travel with education. Road Scholars is an organization that individuals,
couples, and families love. See the
world and learn deeply while also closely embracing the local culture of the
country you visit. Its killing three
birds with one stone.
Before you go away, consider starting to learn the language
of the country you’re visiting. Studies
now show that learning a new language is no harder than when you’re young. And learning that second (or third?) language
stimulates cognitive activity, creates new neural pathways, and helps to
decrease chances of developing Alzheimer’s.
If travelling far and enrolling in classes is too much, you
can still learn a lot just by day-tripping.
People are always amazed at what’s in their own backyard. State parks, local museums, funky shopping
districts – new and fun things are typically a short drive away.
If you just want to sit at home, fill your time reading,
solving puzzles, playing mind games, competing online in chess or bridge, or
solving the daily crossword. Create your
own little reading club, deciphering motifs, symbols, and themes with your
spouse, sister, or friend down the street.
Play any of a number of highly rated apps on your phone. Medical News Today rated their favorites as
Luminosity, Elevate, Peak, Fit Brains, Reaction Field, and Speedy Sorts.
Birdwatching is something you can do from any window in your
house. If you like to travel, it can be
done all over the globe as well. Watch
or read “The Big Year”, a great film about the passion and devotion of bird
watchers. A wonderful documentary about
the people of birding is called “Birders: The Central Park Effect”. Phone apps make this hobby easy as well.
Hobbies are a fantastic way to ease the transition from work to retirement. Remember, though – they cost money. Lessons for painters or musicians, binoculars for bird watching, studio space for sculptors, furniture purchases, tuition expenses, or frequent global travel – it takes substantial money to fund your interests. Don’t take away from your retirement savings. Get the money instead from your home equity. Speaking of hidden treasures, that’s just what your home equity is. Your home has grown in value since you first purchased it, and that increase is just sitting in your equity. Take the cash frozen in your equity and put it to use – all while remaining in your home. Cash in and stay in – the SmartRE Way.
“You give but little when you give of your possessions. It is when you give of yourself that you truly give”. Kahlil Gibran
Whether you retired at 65, 75, or 50, charitable
opportunities open up exponentially.
Because time is now not an issue.
A life of hard work mandates lounging and vacationing upon retirement,
but that ends and new retirees are eventually faced with boredom. Volunteering beckons as a welcome medium
between the slavish demands of your working days and the sedentary sameness of
The dual demands of a life raising a family as well as
providing for that family leave little time for volunteering. Really, because of this time crunch, the best
avenue for accessing volunteering opportunities is through work. Charities.org conducted a study that revealed
82% of businesses say that they’re employees would like to volunteer with their
work colleagues through an employer sponsored volunteer program. Yet only 21% of businesses offer paid time
off for volunteering according to OneOC, a nonprofit consultancy. Meanwhile, 65% of Fortune 500 companies offer
matching donation programs.
So it’s clear that giving is more accessible than
volunteering. And that’s a shame, because
according to UnitedHealthcare (UnitedHealth Group 2017 Doing Good is Good for
You Study), volunteering yields significant physical, mental, and emotional
benefits. 75% of Americans over 18 feel physically
healthier, which they attribute to volunteering. More impactfully, 93% report a better mood, 79%
feel less stress, and 88% have more self-esteem when donating their time. And now that you have more time, consider
volunteering as a way to spend it.
As you contemplate what to do, be mindful that volunteering
is not going to be like the career from which you just retired. Non-profits are a wholly different animal
from for-profits. While you may not have
been blown away by your department’s funding in the past, it was likely far
higher than the shoe-string budget that most non-profits deal with. Staffs are comprised of people from varied
backgrounds with different skill sets, so there will always be holes to
fill. And doing so won’t necessarily be
your call, so if you’re used to driving the car, you may need to be willing to
take a back seat and let someone else learn to drive while you learn the
road. All this is a long way of saying
to carefully set your expectations; volunteering is likely different from your
previous experiences, so give it some time.
And that’s a good thing.
Because some people want to use their retirement to learn new things,
meet new people, and grow new skill sets.
While they may initially feel out of place, these volunteers thrill at
the draw of the unknown and eventually grow comfortable. If initial comfort is what you crave, then
try volunteering where you know you can make an immediate impact. If you’re a lawyer, provide pro bono
services. If you’re a teacher, provide
education services. Avoid burn out
(after all, you did just retire from doing what you’re best at) by being
selective with your work and limiting your hours.
Volunteering is good for the soul. Thomas Jefferson said it best – “I believe that every human mind feels pleasure in doing good to another”. SmartRE can help. Our service liquidates the cash frozen in your home equity – without debt, without interest, and without vacating your home. You can use that cash to help fund your retirement, and volunteer to your soul’s content without worrying about paying your bills. To learn more, go to our Volunteering section to see more articles, like “Ready to Volunteer – Here Are Some Great Ideas”.
Everyone is familiar with debt. It is the cost associated with taking the next step to reach goals like getting an education, buying a car, or purchasing a house. Debt sticks with people even after those goals have been reached. It’s not uncommon to have debt when you enter retirement. The question is, what do you do about it? Here’s an overview of what to know about having debt in retirement and how to address it.
The Retiree Debt Trend
Debt often feels isolating. But in reality, debt among retirees is not uncommon. Between 2003 and 2017, the amount of debt has gone up 87 percent among those ages 55 to 80. Credit card debt, mortgage payments, student loans, and car payments help contribute to this. Other ﬁnancial factors like the availability of credit, lower interest rates, and wealth generated by the housing and equity markets contribute too.
The average debt among people 55 to 64 is $108,000. Those ages 65 to 74 have $66,000 in debt. Because of these high average debts, people in these age groups opt to delay retirement and keep working.
The Unknown Factor
Not retiring may help pay down debts. But it offers no protection against unforeseen situations like high tax bills, unexpected health challenges, or a family member in need of ﬁnancial help. People commonly turn to credit cards for unexpected expenses or other high-interest options. This often puts retirees already saddled with debt into more even debt than they can handle. One way to address this debt is to start making a plan to get out of it.
Planning to Tackle Debt
Making a list of debts and include the amount owed, the terms of repayment, and the interest rates is a good place to start. From this list, put the debts that cost the most at the top and plan to pay those off ﬁrst. But before thinking how to pay them off, ask how these debts came about, to begin with. Understanding the source of debt and creating a budget or a ﬁnancial plan will help prevent the same debt problems at a later time.
Lack of ﬁnancial resources often contributes to current debt problems as well as recurring ones. This is why ﬁnancial experts frequently advise retirees not to rush into any particular ﬁnancial option to address debt. Instead, consider assets that already exist. A home is usually the largest asset that a retiree has. Reﬁnancing the home or taking out a reverse mortgage are two popular options that people take advantage of. But both of them come with risks.
Reﬁnancing a mortgage lowers payments and can provide cash out in the immediate. However, it can strain the budget over the long term. People who continue to work after reaching retirement age cannot work forever. Therefore, the new mortgage payment has to be comfortable to pay when income is less.
Since reverse mortgages do not require a payment, this may seem like an option for most older Americans looking to pay off debt. But reverse mortgages are very complex transactions and they are problematic due to maintenance requirements and for homeowners that have other people living with them. The overall cost of a reverse mortgage loan is also a factor to consider.
Options for Accessing Home Equity
Accessing home equity is a solution for retirees that have debt. But if a reﬁnance payment is too high and a reverse mortgage is too complicated or doesn’t work for the situation at hand, what is the alternative for accessing equity?
Consider a home ownership program like SmartRE. SmartRE allows homeowners to access their home’s equity by selling a portion of the home’s value to an investor. The homeowner can use the proceeds from the sale to pay off debts without extending the term of an existing mortgage or putting their home at risk with a complicated reverse mortgage.
In states like California where the cost of real estate continues to rise, drawing down on home equity benefits both the homeowner and the investor. The homeowner will continue to benefit from the equity in the home and have an affordable way to repay the investment.
Entering retirement with debt is a challenge that causes stress and anxiety for many people. That doesn’t have to be the case. Creating a ﬁnancial plan and considering the best way to utilize existing assets is one way to eliminate debt for good.
To learn more about the smart way to leverage home equity, visit SmartRE today.