Forward on reverse: Obama's call and reverse mortgagesAtare E. Agbamu, CRMScommunity service, volunteers, HECM, Obama's "army of new teachers"
Reverse mortgages can boost volunteerism among aging baby
boomers and support President-Elect Barack Obama's call to
community service. That was one of the lessons I took away from my
conversation with Paul and Irene Alexander of Hampstead, N.H. when
I was researching my recently released book, Think
The Paul and Irene are pre-boomers and lifelong volunteers. Paul
is a retired human resource manager, and Irene retired as a
receptionist for a law firm. They believe the reverse mortgage they
took six years ago gave them the freedom to focus on helping others
in their community.
"From a contribution basis, we were able to concentrate on
contributing to other people's quality of life, as well as our
own," Paul Alexander said.
Until Paul took ill three years ago, the Alexanders gave 24
hours a week (or 1,248 hours annually) doing volunteer work.
Nationally, approximately 61 million people volunteered in their
communities and gave 8.1 billion hours of service, valued at $158
billion in 2007, according to the Corporation for National and
Community Service. Volunteering in America reported that 31.2
percent of boomers gave 52 hours a year to their communities
between 2005 and 2007. At 78 million, baby boomers could double the
number of older adult volunteers in the coming decades.
They will help address needs in education and other areas. In
education, for example, we will need more than two million new
teachers in the next decade, especially in math, science and
special education. The teacher shortage is acute in urban and rural
school districts. So, several battalions of President-Elect Obama's
"army of new teachers" will have to come from highly-educated,
retired baby boomers. As Paul Alexander, 74, knows very well,
reverse mortgages can give boomers the freedom to heed Barack
Obama's call to serve their communities.
"If we had to work to pay our mortgage, that's a different
story. We wouldn't be able to make those contributions. It is a
great social plus. [A reverse mortgage] is truly one of the best
things that has happened to this country in a long time," Paul
Unlike the Alexanders, many baby boomers may have to work
because more than half of them have a mortgage payment obligation.
According to a MetLife Mature Market
Institute demographic profile, 56 percent of younger boomers
carry a mortgage. Among older boomers, it is 53 percent. These
boomers will enter retirement with some monthly mortgage payment
While some may find meaningful work that also supplies the cash
they need, others may have to settle for work that may not fully
use their skills and education or give them the flexibility they
need in post-retirement work. That is where a reverse mortgage
solution comes in.
How can reverse mortgages aid volunteerism? There are at least
two ways. First, depending on mortgage balance and equity
availability, a reverse mortgage stops the monthly negative
cash-bleeding. And second, it increases positive cash in-flow,
giving the boomer budgetary flexibility to mix leisure with
community service and enhance life satisfaction.
The physical and psychological health benefits of volunteerism
are well-documented. With a massive and permanent aging population
under way, the public health value of volunteerism cannot be
underestimated. Therefore, policymakers should look at how reverse
mortgages can be used to advance volunteerism among baby
One way is for an Obama administration to waive Home Equity
Conversion Mortgage reverse mortgage two-percent upfront mortgage
insurance premium for eligible older adults who have given at least
500 hours of documented community service two years before applying
for a reverse mortgage.
During the presidential campaign, Obama promised a $4,000
college tuition credit for students who commit to service as
teachers in high-need communities. Similar incentives should be
considered via reverse mortgages for the legions of older adults
who forgo retirement leisure to serve their communities in response
to Obamas call.
Think reverse. Move forward!
Author's note: The book, Think Reverse!, is now
available at reverse.mortgagepress.com.
Atare Agbamu is the author of Think Reverse! (The
Mortgage Press, 2008) and more than 100 articles on reverse
mortgages. He is a reverse mortgage specialist in Minnesota and an
adviser to older adults, their families, professionals and
institutions across the country. He may be reached by phone at
(612) 203-9434 or e-mail [email protected]
offer comments on his book, visit www.thinkreverse.com and
click on the "Bookfeedback" page.