How to Leverage Real Estate Equity to Reduce Medical Debt
By Rick Tobin
The greatest form of wealth is happiness and good health, from my perspective. If you live a shortened life due to significant health challenges, it really doesn’ t matter whether you’ re rich or poor if you’ re not around to spend the money on yourself or share with your loved ones.
Unless you’ re a billionaire, the odds are quite high for the typical homeowner that the bulk of their net worth created during their lifetime originated from the equity built up in their primary home after years or decades of mortgage payments.
What’ s interesting to me is that the average U. S. home seller in 2024 was 63 years of age. If many of these home sellers purchased their home using a 30year fixed rate mortgage and did not accelerate the mortgage payoffs with biweekly payments and / or extra principal paydowns, then many sellers first bought the home 30 years earlier in 1994 at the age of 33.
I’ m sure that a high percentage of these home sellers did not want to sell their homes at the average age of 63 last year in 2024. They either needed to downsize their living space after their family members moved out years or decades earlier, or they couldn’ t afford to continue paying rising insurance, property tax, credit card, student loans for themselves or their children or grandchildren, and / or medical bills.
Another motivating factor for some of these home sellers is that they wanted to take their equity gain and share it with loved ones after selling the home and moving to a smaller property. However, there are still ways to stay in a home of any size and later transfer the equity gains to the family heirs by way of family trusts, family limited partnerships, and other entities suggested by their trusted advisors and reverse mortgage solutions.
Medical Dependence and Skyrocketing Costs
Real estate creates the bulk of wealth for most Americans that were likely purchased earlier in life and medical bills later in life can wipe out most or all of the same wealth, tragically.
The U. S., with just 4.5 % of the world ' s
Image from Canva Pro
Real estate creates the bulk of wealth for most Americans that were likely purchased earlier in life and medical bills later in life can wipe out most or all of the same wealth, tragically.
population, consumes 2 / 3rds, or a rather devilish 66.6 %, of all pharmaceuticals on the planet.
The # 1 cause of financial insolvency here in the U. S. is directly related to unpaid medical bills. This is in spite of more than 70 % of these same people having medical insurance coverage at the time that wasn ' t sufficient enough to cover all of the medical debt.
According to the Centers for Disease Control and Prevention( CDC), almost 60 % of American adults have at least one chronic disease such as cancer, diabetes, heart disease, stroke, dementia and other neurological challenges, and obesity. Sadly, a high percentage of young children and teenagers also battle one or more chronic disease symptoms.
The medical treatment costs for some of these almost lifelong health challenges can run anywhere between several hundred thousand to a few million dollars over years or decades. For example, some memory care assisted living facilities with 24hour services can cost between $ 10,000 and $ 20,000 + per month, depending on the healthcare provider and state location, as per CareScout.
38