The Fear Of Elderly Homelessness

There’s been a surge of homelessness of the elderly in many cities across America. This recent article (click here) shows a 22% rise in the elderly not having a home to live in, catching many Los Angeles officials off guard. “While some homeless people are aging in place, L.A.’s spiraling housing costs increasingly are driving people into homelessness for the first time at advanced ages. A fall, a job loss or a medical crisis pushes them over the edge.”

homeless in LA
This is a very powerful photo from the article. “Now 70, Andrea Colucci (pictured) lives in a white van with no license plates, a sagging tire, her support dog and a broken window.”

Brandi Orton, a government relations director for St. Barnabas Senior Services and managing director of the Los Angeles Aging Advocacy Coalition states:  “Three to five people a month are falling into homelessness late in life.” This is the statistic for LA but I am certain this is happening all over America at either a faster or slower rate than LA.

That is why, it is imperative, that the number one thing a person should do when preparing for retirement is to secure a guaranteed place to live out the rest of their lives. For me, IMHO, I have always advocated owning your own home, debt free, in retirement. I am totally against renting because you are always at the whim of a landlord. There is NO security in renting. You can be thrown out on the street at any time. And what happens if, God forbid, you can’t make your monthly rent? Or come up with a security deposit, first and last month’s rent for your next rental?

Granted yes, owning your own home means additional expenses such as maintenance, insurance and taxes. That’s an additional cost I’m more than willing to pay because I’m guaranteed that I will always have a roof over my head. If for some reason, I can no longer afford my property taxes or maintenance costs, I can always sell because I have built up equity in my home. I can always downsize. I can also take out a reverse mortgage BUT I do not advise this unless absolutely necessary.

The secret to a successful retirement while owning your own home is to pay off your mortgage and be as totally debt free as possible. Retirement and debt don’t mix. I always advised that a person should buy a house no later than age 35, take out a 30 year mortgage, never, ever borrow out your equity, stay in the home and pay the mortgage off by the time you are 65. Of course there are other ways to do this (like a 15 year mortgage) but the bottom line is this: just do it!

I have a great fear of being homeless in my old age. I have a more recent fear that my property taxes are going to be raised to a point I can no longer afford (my town in in the process of doing property re-evaluations again! the last time was 2010). I have a fear that the day will come when DH and I can no longer keep up nor have the resources to keep up our maintenance schedule. No worries. When the time comes, we can sell and downsize to a newer home. But we will always own our own home. Or have enough financial resources to afford assisted living.

Critics say that many homeless people have done it to themselves by making bad decisions. I agree. Not having a paid off home, borrowing out your equity to redo a frivolous kitchen remodel, having a sex-change operation at the age of 67 (read the article) can be some of the bad decisions people make. Be cautious. Be careful. Think things through. Plan for the ‘what-ifs”. Don’t be so smug thinking bad things can never happen to YOU because they can! And sometimes they will! Make owning a place to always live in a priority as you near retirement. Never take your home for granted and protect your home with your life.

Live well my friend, and prosper. Live well and prosper.

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8 comments

  1. I would estimate that 70-80% of the homeless/ people in poverty that I serve at the food bank and on the street are people over 60. Some are toting grand (or great grand) children. They arrive in broken mini vans. We load up food and then they go—somewhere. We collected 1,000 tents at a recent concert. They will be gone by fall. This is an issue. The have nots are growing once again- those who cannot afford the lawyer to figure out their medicaid.
    Unless you have a very good pension (and some do) keeping a house is key to surviving your old age from what I can see.I have two friends who think they can sell and rebuy with a mortgage. They need to get a clue that it is way difficult to get a mortgage when you are retired. I have a good friend who was denied- even with a good pension!

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    • Hi Janette. It’s difficult for a bank to loan an older person a 30 or even a 15 year mortgage. When I got a 12 year loan for my RV, despite having a 807 FICO score the bank still wrote in a survivor clause to be responsible for my measly debt because they didn’t think I’d live long enough to pay off the loan. I can only imagine what it must be like to get a mortgage or a car loan or even a home refi (my sister was denied) when you’re over 60 (my sister is 65 and totally debt free but couldn’t get a loan because her pension and social security weren’t good enough assurance of income. Go figure!)
      What you have told me about the people at your food bank is heartbreaking. I always keep a look out to help any elderly person. I’ve been known to pay their restaurant bill, buy their groceries when I see them struggling to pay the cashier. If ever I meet someone who needs a place to live, I’ve got two extra bedrooms upstairs. God bless them and keep them.
      Thanks for your comment.

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  2. There was a recent book about the elderly living in RVs and moving from place to place to find temporary work but I can’t remem the name of it right now. It was enough to scare the socks off any thinking person.
    My house is paid off and I keep enough money in my emergency fund for 2 years taxes and homeowners insurance.

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    • Hi Florence. There have been several articles written on it also. 1 in 5 elderly over the age of 65 continue to work because they don’t have enough money saved. Those in RVs are called ‘Workers on Wheels’. Here’s one of the articles: http://www.chicagotribune.com/business/ct-elderly-workers-20170929-story.html#
      You are very wise to have a paid for home and at least two years worth of taxes & insurance ready. I just got my homeowners insurance annual bill. It’s $703. Last year it was $585. The increase, they say is due to rising replacement costs. That’s fine. If I pay it in 12 installments I will owe them $868. Thankfully I have the full money available, saving me $165. I pay most home bills and taxes now in full saving me hundreds of dollars in annual fees and installment costs.
      Thanks for your comment.

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  3. Homelessness is so scary, but IMHO, you have planned enough and have your home paid for, and saved enough like we did that I don’t think it should be such a strong fear in your mind. I think medical issues get more of my concern and providing home care or more help when it is needed. Inflation on necessities is also rearing it’s ugly head dramatically.
    When I was looking to moving into an over 55 condo community. 18 months ago the better way to finance the move was to get a no cost home equity loan on my current paid off home with no cost, 2.4% loan, and if I sold my current home before three years, the penalty was $300. My state limited the home equity loan to 80% of its equity and they told me within a minute that this way I could get $200,000 more then I could get by applying for a mortgage with my retirement income. I didn’t make the move because the yearly cost of taxes and condos fees was $12,000 more for 1200 square foot less space on the cheapest condo alternative. Now, that same condo cost $160,000 more with $20,000 for its taxes and condo fees. It’s new prices are higher then most of the homes in the small country town it’s located in! Sincerely, Lara

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    • Lara, the condo fees are crazy. Our Florida condo, to own & maintain, cost us $10K a year, by the time they got through with us, with no end in sight. It just wasn’t sustainable for a retired couple on a fixed income. That’s why everyone we met there had a hustle job. They had to hustle and work, despite pensions and social security and investments in order to keep up with the rising costs. Our single family home is cheaper to own and maintain. It only costs us $75 to either mow of have the snow shoveled. How great is that? And the home is almost maintenance free. I think I’ll be able to handle it alone should the need arise. We plan on staying here for as long as we can and either hiring a person to stay with us and do the maintenance & home care or move into assisted living. This September we’re putting in an automatic generator for when the electricity goes out, which is often. Nick usually hauls out the generator but he can’t do that forever.
      Sometimes the best laid plans are the ones we already made, right?
      Thank you, as always for your comment.

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