“[T]he other major demographic trend you see is the aging of America,” Whitney said. “So what’s called the silver tsunami is 10,000 people a day turning 65. And by 2030, the entire baby boomer population or generation will be over 65.”

That will grow to encompass 21% of the total U.S. population, and when combined with the outsized rate of homeownership among older Americans, the potential exists to dwarf the most active year the U.S. has seen for home sales, she said.

“[T]he AARP estimates that 51% of people over 50 downsized their home,” she said. “And people over 50 are 74% of total U.S. homeowners. So if you just take half of that, you’ve got about 30 million homes that should be coming on the market. And the peak in existing home sales was 2005 when you had around 7 million transactions.”

Whitney referred to this trend as a “python” that could begin coming to fruition in the latter half of 2024, which could then persist “for the next several years,” she explained.

“[T]hat, I think, is what’s going to be reshaping housing in America,” she said. “And I think that’s what will put regional pressure in terms of more and less on home prices.”

Most housing analysts, including HousingWire’s Logan Mohatashami, say the silver tsunami’s transformative potential for the U.S. housing market has not yet materialized in any meaningful way, and few expect it to anytime soon. Boomers, the wealthiest generation, are increasingly staying in their homes, and the vast majority don’t have a mortgage or have one with a low interest rate.

Whitney says that home prices could moderate in the future because of its potential impact.

“[I]f you lower the overall home price, the serviceability becomes more affordable,” she told the outlet. “That’s what I think is invariably going to happen because you’re going to have more seniors, the silver tsunami, selling and there are fewer buyers so the give is going to be lower home prices.”

If this came to pass as Whitney predicts, then some seniors may not have as much of a need for a product like a traditional reverse mortgage through the Federal Housing Administration (FHA)’s Home Equity Conversion Mortgage (HECM) program. However, HECM for Purchase (H4P) — a comparatively lesser-used HECM variant — could be used to allow more older Americans to purchase a new home using a reverse mortgage.

H4P has struggled to gain traction in the already-niche reverse mortgage market, though some reverse mortgage industry professionals have aimed to amplify its potential among their peers.

Last October, FHA introduced a proposed seller credit for the H4P program. When news of this proposal reached attendees during a panel discussion at a recent industry event, audible cheers from the assembled professionals broke out.

But industry professionals also tend to see H4P as a bit of a hard sell for borrowers and, critically, real estate agent referral partners.

This is according to the recently released 2023 Schroders U.S. Retirement Survey, which queried non-retired members of Gen X between the ages of 43 and 58 in this profiled data.

These cohort members “say on average it will take approximately $1.1 million in savings to retire comfortably, yet they expect to have just $661,000 saved,” the survey findings said. “The resulting savings gap is significantly larger than the expected shortfalls facing Millennials and baby boomers.”

More than six-in-ten (61%) surveyed Gen X members “are not confident in their ability to achieve a dream retirement, the results found. Both millennials (49%) and non-retired baby boomers (30%) are far more confident in their ability to do so by comparison.

Non-retired Gen X members also outpace both millennials and boomers in the rate of not having done any retirement planning. Nearly half of surveyed Gen X members (45%) have not performed any planning, compared with 43% of millennials and 30% of non-retired baby boomers.

“Underscoring the need for a plan, non-retired Gen Xers are allocating on average 32% of their assets earmarked for retirement to cash despite their time horizon and sizeable retirement saving gap,” the results also found. “When asked about the reasons for investing their retirement assets in cash, almost two-thirds of these Gen Xers (63%) say they fear losing their money and nearly one-quarter (24%) report they are not sure how best to invest their savings.”

The oldest members of Generation X do not yet qualify for Home Equity Conversion Mortgage (HECM) loans, but some have begun qualifying for certain private-label reverse mortgages within the last few years. In some states, offerings of such products open up to borrowers aged 55 and older, with the oldest members of Gen X, on average, turning between 58 and 60 years old in 2023.

That also means that the oldest members of Generation X will begin qualifying for HECM loans in the next two to four years, opening up a new cohort to the reverse mortgage market. Some members of the cohort carry different kinds of financial burdens than their baby boomer parents, including student loan debt.

These differences may necessitate the reverse mortgage industry to change some of its informational and advertising approaches to accommodate the realities of a new generation, though we are many years away from Generation X becoming the dominant demographic the industry will be able to serve.

Many outsiders often see the reverse mortgage industry as a “loan of last resort” for financially distressed seniors, a tagline that the industry itself has had a conflicted relationship with.

But in recent years as more industry professionals and companies have offered proprietary alternatives to the government-backed Home Equity Conversion Mortgage (HECM), wealthy seniors have become a more viable cohort as potential clients. These seniors may still have financial issues to address, though.

One such issue is a portfolio that includes “working” versus “non-working” assets, and one financial advisor is aiming to call attention to the latter in a new piece at InvestmentNews.

Michael Landsberg is a partner and the chief investment officer at Florida-based Landsberg Bennett Private Wealth Management, a firm that manages roughly $1 billion in assets for mass affluent retirees. These older Americans have a lot of assets in the forms of multiple homes, cars and boats, which leads to discussions with those clients about the differences between such assets.

“Nonworking assets cost money,” according to the column. “The vacation home, the second or third car, and the boat all require money, time, and effort to maintain. Working assets, such as rental properties or stocks, generally produce income and don’t involve tremendous financial expenditures to maintain.”

Assessing the role these assets play in an overall retirement strategy and investment activity is important in the pursuit of maintaining long-term financial stability. The home (or homes) may have an outsized role to play.

“Landsberg said that it’s important for retirees to reassess these assets and consider downsizing their home or selling the unused vacation home, in an effort to streamline their financial life and shed assets that are costing money to maintain and keep every month,” the column said. “Many nonworking assets look attractive on paper, but they’re actually financially problematic.”

Landsberg recommends downsizing since it could allow certain clients to avoid relying on debt in their later years, and it helps avoid the stress of maintaining multiple homes. While he doesn’t specifically mention reverse mortgages, Landsberg says many of his clients own their homes free and clear.

Reverse mortgages are not an option for second homes. The occupancy requirement precludes a client from taking out a reverse mortgage on a home they do not occupy as their primary residence.

However, retirement professionals and educators like Wade Pfau and Steve Resch have presented a reverse mortgage as a viable vehicle for more affluent retirees who can use a standby line of credit as a buffer against market volatility, protecting investment accounts.

This could be an avenue for discussion with more affluent retirees, especially since they have expressed doubts about achieving an optimal retirement in the past.

7 money moves for a prosperous New Year

Use these seven tips to save money, get additional tax benefits and make the most of your insurance, credit cards, retirement accounts and more.

1. Create a business holiday spending plan

If you don’t already have a business holiday budget, consider what you can realistically afford to spend. Make a list of every holiday-related expense you’ll need to fit into your budget, like hosting a party, cards for prior clients and gifts for coworkers and service providers you regularly work with. 

Then, assign an estimated dollar amount for each purchase or gift and total your list.  

If your estimated holiday expenses are over budget, consider ways to make it more manageable. If you wait until the last minute to think about holiday giving, you’ll have fewer options, feel more stress and spend more. 

2. Use your business credit card rewards 

If you use business credit cards, they probably offer rewards, like points for travel, purchases and gift cards. Some may require you to activate specific spending categories, so pay attention to bonus offers, and sign up to maximize your rewards. 

Many card issuers offer additional rewards for purchases made through their online shopping portals, giving you more points for every purchase. However, some rewards may expire at the end of the year, so log into your account and take advantage of them. They might help you purchase gifts or other holiday-related items on your shopping list.

3. Create or update your business goals

Set some business New Year’s resolutions as the year ends. Think carefully about what goals you want to achieve in the coming year, such as prospecting targets, advertising, closings and taking time off.

Consider coordinating your objectives with your brokerage so you’re aligned. 

4. Prepay tax-deductible business expenses

Another smart year-end money move is to pay or prepay as many tax-deductible business expenses as possible. Here are a few to consider:

• Education: Costs for continuing education, training, books and conferences.

• Marketing: Costs for advertising your business and listings, such as home magazines, social media, websites and billboards.

• Insurance: Premiums for various coverages like errors and omissions, commercial auto and a business owner’s policy.

• Home office: If you use part of your home exclusively for business, you may be able to deduct a portion of your residential expenses, such as mortgage interest, rent, utilities and maintenance.

• Professional fees: Costs for accountants, attorneys and consultants for your business may be deductible.

5. Maximize a retirement account

Every pre-tax dollar you contribute to a traditional retirement plan, such as an IRA,  SEP-IRA, or solo 401(k), is money you skip paying income tax on until you make future withdrawals.

For instance, if you make $100,000 and put $20,000 in a SEP-IRA for 2023, you only pay income tax on $80,000 for the year. You get that fantastic tax benefit even if you don’t itemize deductions on your tax return.

Note that some retirement accounts, such as an IRA and SEP-IRA, don’t have a year-end deadline but give you until your tax filing deadline, including any extensions, to contribute for the prior year. 

6. Get more from your medical insurance

Your health insurance benefits and deductibles get tied to an annual schedule. So, year-end is the perfect time to squeeze more value from your medical policies. If you’ve already met your yearly deductibles, you can save money by scheduling needed appointments and paying for healthcare before the end of the year. Otherwise, your deductibles will reset to zero starting on Jan. 1.

Note that the annual open enrollment for marketplace health coverage begins on Nov. 1 for coverage to start as soon as Jan. 1. During open enrollment, you can visit Heathcare.gov to sign up for a new health and dental plan or change your current policies. 

If you miss the annual healthcare open enrollment, you won’t be able to purchase a marketplace plan unless you have a qualifying life event, such as losing your job, getting married, having a child, or relocating to a new state. However, you can shop plans designed for the self-employed, such as HBG Solo, any time during the year.

7. Boost your retirement savings rate

The end of the year is an excellent time to increase your retirement savings rate for the following year. Use your online retirement account to make contribution changes or ask your account custodian for help.

Some investing firms allow you to automatically increase your saving rate by 1% at the beginning of each year. If you have that feature in your retirement account, set an automatic escalation so you won’t have to think about it next year.

Laura Adams is an award-winning financial author, podcaster and spokesperson.

“While many employees (79%) are satisfied with their retirement benefits, they don’t necessarily believe their savings will prove adequate and 76% have increased concerns about their capacity to save for retirement given the unstable economy,” the findings read. “More than a third (35%) of employees cited the rising cost of living expenses as the top impediment to saving, followed by personal debt (20%) and family obligations (11%).”

There is also a disconnect between the competitiveness of retirement packages offered by employers between dedicated human resources professionals and workers, with 91% of HR professionals believing their companies are competitive with such benefits while 61% of employees believe “they could find a better package with a different employer.”

“With rising inflation, it’s not surprising that employees are concerned about their ability to save for retirement and this, in turn, is reflected in the perceived value of employer-sponsored retirement plans,” said Tonya Manning, U.S. wealth practice leader and chief wealth actuary at Buck. “[Defined contribution] plans have evolved to become the primary retirement savings vehicle for Americans, and for plan sponsors, the challenge is how to help participants reach their savings goals.”

Employees also remain far more focused on their immediate financial needs as opposed to thinking ahead to retirement, as more than half (53%) of employees preferred a $500 pay increase over a $500 increase being applied to retirement plan contributions.

Workers also report that despite legislative changes to retirement plans in the U.S., many have not noticed any discernible change to their own retirement plans over the past two years. But employers do have plans in motion, according to the survey.

“[Fifty-seven percent] of employers offer, or plan to offer, matching retirement contributions for student loan payments, a provision included in the recent SECURE 2.0 legislation,” the results explained. “This would be a popular move as 57% of employees would like to see this enhancement.”

In terms of survey methodology, Buck “commissioned an independent research firm to survey benefits-eligible employees and HR and benefits professionals who administer retirement plans, allowing for a comparison of similarities and differences between employee and employer responses,” the results said.

“Twenty-two percent of American workers said they weren’t making retirement contributions in 2023 or 2022,” the survey found.

Additionally, 25% of survey respondents say they’ve put more into retirement savings since August 2022; 36% say their contributions remain the same; and 17% are contributing less.

Millennials are more likely to report that they contributed more to their retirement accounts over the past year (31%), while only 18% of baby boomers responded similarly.

More than half of respondents (56%) felt they were behind where they should be when it comes to meeting their retirement savings goals, with 37% of respondents saying they are “significantly” behind.

“Retirement savings goals seem to be slipping through Americans’ fingers,” said Bankrate Senior Economic Analyst Mark Hamrick. “Armed with information and financial resources, they can turn this around and gain a firmer grasp.”

While inflation is a likely culprit depressing the savings activity of many, its grip is loosening since wage growth is outpacing the rate of inflation, Hamrick added.

“At the same time, the job market remains tight, and the unemployment rate is still historically low, providing ample opportunity for income,” he said. “Not tomorrow, but now, is the time to prioritize retirement savings for those who are employed or expect to be soon working.”

While financial experts have long cited having at least $1 million as a benchmark for a comfortable retirement, 32% of survey respondents said they need more than that to achieve adequate retirement savings.

Beyond that, one-quarter (25%) of respondents also revealed that they don’t know how much they need to save for a “comfortable” retirement, the survey revealed.

“Baby boomer workers, who are either close to retirement age or are already old enough to retire, are the most likely generation to not know how much they need to retire,” the results showed.

Twenty-nine percent of baby boomers responded as such, compared with 25% of Gen X workers, 24% of millennials and 22% of Gen Zers.

While the state of North Carolina has outlined an ambitious policy plan to collaboratively address the needs of older adults and people with disabilities, other political priorities often end up taking precedence and push the needs of older people further down the road. This is according to a story published recently in N.C. Health News.

“North Carolinians 65 or older make up 17% of the state population, and by 2031 they will represent one in five,” the story explained. “However, recent state leaders facing multibillion-dollar issues such as tax cuts, teachers’ salaries and Medicaid expansion have not put top priority on older people’s state-funded needs, according to legislative budgets, state and local officials and older people in several counties.”

N.C. Gov. Roy Cooper (D) has described a need to create new policy designed to serve the growing population of older North Carolinians, but has faced resistance from the state assembly which contains a veto-proof Republican supermajority, the story said. Still, despite his stated support for policy that would serve older residents, certain advocates on the ground contend that Cooper could do more to serve them even if his legislative agenda encounters roadblocks.

“I really think that he tries, but the effectiveness hasn’t really been there,” said Norma Duncan, an 86-year-old retired N.C. state employee. “We aren’t getting enough funds; we’re seeing the needs not being met.”

North Carolina’s assembly includes the Senior Tar Heel Legislature, a body designed to keep the state’s senior citizens informed about the legislative process and matters being considered by the North Carolina General Assembly that could apply to them. But the body has not seen many of its policy priorities put into action, echoing the struggle other state legislatures are seeing when addressing policy aimed at aging populations.

This is most especially true of funding increases for certain programs including the state’s Adult Protective Services program; home and community block care grants designed to fund senior-specific services; and long-term care ombudsmen who advocate for the needs of seniors in long-term care settings.

In other states, policy aimed specifically at aging populations tends to run into resistance for lawmakers generally critical of government spending.

In Washington state, for instance, Gov. Jay Inslee and the Democratically-controlled legislature recently implemented a new tax designed to create a long-term care insurance program by taking a deduction of 0.58% of state workers’ paychecks, a worker first becomes eligible to access the fund for long-term care after contributing for 10 years.

But the state’s Republican lawmakers are currently in the process of crafting legislation designed to make the new program optional for state workers, which leaders admit could derail the fund entirely.

However, those leaders also say that the funding gathered by the tax will be “woefully inadequate” to meet the needs of the state’s future aging populations, according to coverage from Seattle-based National Public Radio (NPR) affiliate KUOW.

This is according to survey results from Today’s Homeowner. In a survey using third-party tool Pollfish and conducted on June 28-29, one respondent described their motivation for wanting to remain in their home.

“I will stay here as long as physically possible, and if there is an issue I will be concerned at that time,” the respondent said. “My mom was able to live independently in her home until she was 95.”

Comparatively, only 36% of respondents said they would be willing to move to a different area with a lower cost of living. Per the survey, 34% said that nothing could encourage or entice them to leave their homes.

There are, however, concerns that some respondents expressed about living in their own homes into older age. These include performing day-to-day activities (37%), loneliness (35%) and being able to afford at-home care (27%).

The survey also identified three cities it said would be “easier” for aging in place with others: Corpus Christi, Texas, Spokane, Washington, and Amarillo, Texas were listed as the easiest, while only two cities in the most popular retirement states — Florida and Arizona — ranked in the top 30 cities for aging in place.

According to a separate 2022 survey conducted by Bethesda Health Group, seniors who live in more traditional care settings are happier than those who do not. But seniors who wish to age in place expressed concerns about their independence when living in such a setting, the new survey results explained.

“The other top reasons were living in a fully paid-off home (19%) and an affordable living situation (11%),” the results read. “Data shows that the cost of senior housing and care facilities has been rising, with a median annual cost of $54,000 for an assisted living facility in the U.S. in 2021. For many older Americans, aging in place may be the more affordable option.”

Coverage on the survey from McKnight’s Senior Living characterized the survey results as indicative of a need to change perceptions about senior care facilities.

“[T]he International Council on Active Aging recently published a white paper showing a large discrepancy between how senior living professionals view the industry compared with the views of prospective residents and their adult children,” the coverage said. “That white paper showed the industry has some work to do to change perceptions, including adopting an ‘autonomous living’ approach, which would see the industry becoming more flexible in helping residents maintain their independence.”

“Many federal employees and retirees bought their current homes years ago and have accumulated equity in their homes,” Zurndorfer said in his column. “They can tap into that accumulated home equity while they continue to live in their homes to pay current and future expenses including the cost of LTC.”

While most seniors tend to use a reverse mortgage to supplement their cash flow in retirement, federal retirees may have unique interests or needs that might make a reverse mortgage an appealing option, he explained.

“[A] federal annuitant who is receiving a CSRS or FERS annuity, Thrift Saving Plan (TSP) and Social Security retirement benefits, may need to make some major improvements to their home,” he said. “They may qualify to get a lump-sum amount of money from a reverse mortgage in order to finance these improvements.”

In the realm of LTC, a person who wishes to remain in their own home or to fund the care of a spouse may also see potential in a reverse mortgage’s product features.

“Provided that the other spouse remains living in the home, a reverse mortgage could be used to pay for the annuitant’s or spouse’s stay in the assisted living or nursing home facility,” he said. “If the homeowner is an LTC insurance policyholder, then monthly payments via the reverse mortgage can be used to help pay the LTC insurance premiums.”

However, there are also potential drawbacks to consider that most reverse mortgage professionals immediately recognize as applicable to all potential borrowers.

These include “the possibility of losing the house to foreclosure if the homeowner cannot afford to pay the property taxes; the homeowner will likely leave less inheritance to his or her heirs; at least one individual has to be living in the home (such as the co-borrower or spouse) if the funds from a HECM mortgage are used to pay for the homeowner’s move to an assisted living or nursing home facility.”

Potential borrowers also need to understand that there are a lot of potential expenses the reverse mortgage customer is and could be subject to, including a loan origination fee, mortgage insurance premiums, counseling and other fees.

Zurndorfer also mentions the potential for irresponsible use that could come from an influx of money.

“A reverse mortgage allows a homeowner to borrow against the value of their home, thereby creating ‘liquid’ funds from an ‘illiquid’ asset (that is, the equity in one’s home), to be used to help pay for an important need such as LTC expenses,” he said. “But the availability of ‘liquid’ funds resulting from obtaining a reverse mortgage can create the temptation to use the liquid proceeds in an unwise manner. In that case, then the homeowner is better off avoiding a reverse mortgage.”

Beckwitt, who joined the company in 2006 as executive vice president, has held the CEO position since April 2018. In 2020, he was joined by Jon Jaffe as co-CEO and co-president. Jaffe will be president and co-CEO with Stuart Miller, who is Lennar’s executive chairman. 

During his 17 years at Lennar, Beckwitt helped the homebuilder weather the collapse of the housing and finance industries amid the Great Recession of 2008. In addition, Lennar said in a statement that Beckwitt stabilized and fortified the firm’s foundation to grow. 

“With the help of Rick’s partnership over these past 17 years, we are very well positioned for continued growth, improved productivity, and innovation in the future,” Miller said in a statement.  

Jaffe added, “Over the last years, we have grown revenues and improved efficiencies across the Lennar platform.” 

More recently, Beckwitt helped Lennar navigate the most challenging housing market in decades. Surging mortgage rates resulted in cancelations and reduced profits for Lennar and other homebuilders, who still had persistent supply chain issues and worker shortages.

In the second quarter of 2023, the company reported $871 million in net earnings attributable to Lennar, compared to $1.32 billion in the same period last year. 

But the company sees a recovery on the horizon. In a recent interview with Bloomberg, Miller called for an end to falling housing prices, he said had come down “about 10%.”

Miller, commenting on the company’s second-quarter 2023 earnings, said that Lennar “Continued to see the housing market normalize and recover from the Federal Reserve’s 2022 aggressive interest rate hikes in response to elevated inflation.”

“As consumers have come to accept a ‘new normal’ range for interest rates, demand has accelerated, leaving the market to reconcile the chronic supply shortage derived from over a decade of production deficits.”

For the first time in nearly a year, homebuilder confidence in June moved into positive territory thanks to strong consumer demand, limited competition from the existing home sales market, and an improving supply chain, according to the National Home Builders Association.

Homebuilders, however, are also looking at the single-family rental market. In December, according to a Bloomberg report, Lennar offered to sell some 5,000 homes to investors in the SFR market. Lennar in 2021, with partners Allianz Real Estate and Centerbridge Partners, launched a subsidiary to acquire and operate SFR and multifamily properties. 

Lennar’s shares, which reached $116.91 in December 2021, closed at $130.37 on Monday afternoon, down 2.87%.