The True Cost of Aging
At the very end of this story at Housing Wire, AARP is quoted: “Importantly, aging itself is not a challenge; being unprepared for aging is.”
We couldn’t agree more. As the article highlights, citing data from Genworth Financial, the cost of a home health aide is projected to rise to $8,700 per month by 2034 and $11,700 by 2044.
Who Can Afford That?
Aging and retirement have become pressing financial topics in the U.S. and worldwide. As life expectancy increases, so does the economic impact of an aging population. The numbers are staggering—by 2030, just 15 years from now, one in five Americans will be age 65 or older.
As AARP points out, this demographic shift is transformational, affecting every sector of society. Some states have introduced initiatives to make healthcare more affordable, expand financial planning resources, and create livable communities that support aging in place.
However, many individuals are taking control of their financial future themselves.
The Challenges of Funding Retirement
Buried within that HousingWire article is an all-too-common financial recommendation that demands scrutiny: the reverse mortgage. Even a finance editor at Kiplinger made the case for it.
Here’s how a reverse mortgage works:
- A homeowner takes out a loan against their home equity.
- Instead of making monthly mortgage payments, the lender pays the homeowner.
- The loan is repaid when the homeowner sells, moves out, or passes away.
While this may sound like an appealing option, the reality is more complicated.
The Potential Downsides of a Reverse Mortgage
- Equity Depletion – With each payout, home equity shrinks, but cash flow improves. There is not equity protection with a reverse mortgage, which can result in little to no equity when it comes time to sell. This also means less wealth to pass on to heirs.
- High Costs – Reverse mortgages come with steep upfront fees, accrued interest, and ongoing insurance premiums. These costs can chip away at home equity quickly.
- Tax & Benefit Implications – The mortgage interest deduction? Gone. Medicaid and Social Security eligibility? Potentially affected, always discuss with a financial advisor or benefits specialist before entering a reverse mortgage.
- Limited Upside – While a reverse mortgage provides liquidity, due to the negative amortization, it limits how much you can realized in the form of home price appreciation.
More Americans are prioritizing aging in place, with 77% preferring to stay in their homes rather than move to assisted living (AARP). Fortunately, a better financial strategy is available—one that unlocks home equity without debt, high costs, or tax penalties.
A Smarter Solution: CHEIFS
A solution, such as Cornerstone Financing’s CHEIFS (Cornerstone Home Equity Insurance/Investment Funding Solutions), transforms dormant home equity into tax-free cash, providing a way to afford long-term care while also capitalizing on investment opportunities.
CHEIFS offers:
✅ Not a loan – This is an investment strategy, not a borrowing strategy.
✅ Equity protection – CHEIFS protects 50%, or more, of your home’s equity, including appreciation.
✅ Tax efficiency – No tax liabilities on withdrawn funds.
✅ Growth potential – CHEIFS allows homeowners to retain upside in the housing market.
Planning for the Future Starts NOW
As the U.S. population continues to age—and birth rates decline—retirement planning must evolve. Traditional financial products often fail to provide the flexibility, security, and growth potential needed for long-term financial stability.
Taking control of how we fund retirement is the key to ensuring financial security and a better quality of life.
Yes, AARP—we agree. Aging itself isn’t the challenge. Being unprepared for it is.
