Care home place costs double the average pensioner's income

Care home place costs double the average pensioner's income - A place in a care home now costs up to £30,000 a year, almost twice the average pensioner's income, according to new figures.

A “clear gulf” in funding for services for the elderly has opened up, forcing individuals to sell their homes and raid savings to top up their incomes in order to meet the costs of long-term care, analysts warned.

Research from the leading care agency, Prestige Nursing + Care, suggested that Britain faces a “huge crisis” as people live longer, while councils cut back on state-funded places in residential homes.

An estimated 20,000 people are forced to sell their homes to pay for long-term care every year. A panel of experts, led by the economist, Andrew Dilnot, will recommend reforms to the funding of care and support for elderly and disabled adults in a report to ministers next month.

International projections suggest that the UK will be forced to spend an extra £50 billion a year on services for elderly people as the population ages over the next four decades.

Researchers commissioned by Prestige Nursing + Care found that the cost of a typical care home place already far outstrips the average pensioner’s income.

A single room in a private residential home in Britain now costs an average of £25,953 a year, but a typical single pensioner is on an annual income of just £13,998, the research found. This leaves a shortfall of £11,965 a year.

In London, the most expensive region in the country, average care home costs were £30,784 a year, while in the South-East, annual fees typically reached £29,827.

Jonathan Bruce, Managing Director of Prestige Nursing + Care, said most people did not plan for the expense of paying for care and could find themselves suddenly saddled with huge bills when they or their relatives needed support.

“It is very distressing for families,” he said. “Mum or Dad breaks their hip and goes into hospital, they need rehab when they come out, and often families haven’t really thought about it.

“With 87% of people approaching old age without having made any financial provision for the cost of care, we face a significant crisis.”

Industry experts believe care homes are being forced to increase the charges to private residents who do not qualify for state support because councils have cut the fees they are willing to pay for publicly-funded residents.

Mr Bruce said: “Government funding cuts are having a direct impact on local authority care budgets so those who rely on state care may find that the rug has been pulled from under their feet.”

The cheapest care home places were in Wales, where average fees were £17,680 per year, only £3,744 more than the average single pensioner’s income.

The research involved an analysis of Government statistics, a survey of more than 1,000 adults, interviews with 400 elderly people receiving care at home and their families, and a survey of 55 residential homes.

The findings suggested that most people would prefer to remain in their own homes, with nursing care and support to continue living in their local communities. The second most popular option for long-term care was sheltered accommodation, while just 17% said they would rather move into a residential home.

The analysis follows a warning this week from Europe’s human rights commissioner, Thomas Hammarberg, that Britain’s care system is in “crisis” as privatised care home operators struggle to maintain good quality services in the face of funding cuts. ( telegraph.co.uk )

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How to make money from a manor house

How to make money from a manor house - Owners of big houses face a dilemma when their children grow up: sell up or stay put. Max Davidson looks at different approaches

To sell or not to sell? For owners of big country houses, who have lavished years of love and attention on their properties, it can be an agonising choice.

Sell and they kiss goodbye to a large part of their life. Stay put and they risk ending up in a house that is too big, expensive to maintain and crumbling around them.

It can be very difficult to strike the right balance between nostalgia and pragmatism, particularly about a beloved family home.

“This house has been a labour of love,” says Julian Bannerman, owner of Hanham Court, in Gloucestershire. “I think of it as a republic, self-contained, a world within a world. But there is no point in clinging to the past. You have to move on.”

Julian and his wife, Isabel, are award-winning garden designers, responsible, inter alia, for the British 9/11 Memorial Garden in Manhattan and the Stumpery at Highgrove. They have worked at some of the best-known stately homes in England, from Waddesdon Manor to Arundel Castle, but it is Hanham Court, which they acquired in 1993, that is their pride and joy.

Hanham Court is on the market for £2.5 million through Savills (01225 474500; www.savills.co.uk)


Hanham Court, which is mainly Tudor, was a wreck when Julian and Isabel Bannerman took it on in 1993

In 2010, Hanham was voted number one Dreamy Garden in Britain in Gardens Illustrated. It is easy to see why. The gardens – open to the public two afternoons a week in summer – have a fairy-tale quality, seducing the eye and beguiling you with their subtle scents. There is a formal area, bordered by lilies, old roses, tree peonies and fountains. A woodland garden is overrun with tree ferns, snowdrops and magnolias, while meadows of wild flowers overlook the River Avon.

Everything any gardener could ever wish for, and much more besides, is seamlessly blended into the 26-acre estate. Whoever buys Hanham, which the Bannermans have finally decided to sell, is privileged indeed. But of course – and this is the pathos of selling up – what they do with it is anybody’s guess.

“The sort of buyer I have in mind is someone abroad who is dreaming of England,” says Julian. “But who knows what will happen to the place? There is no point in trying to keep it the way it is.”

Julian turns 60 this year, and he and his wife will soon be empty-nesters. The last of their three sons is in his final year at school. It seems the right time to move on. They have already bought a smaller property in Norfolk, which will be their base for the immediate future.

But they will be leaving a wealth of memories behind, with the life of the family inseparable from the life of the property. On the very day they moved into Hanham, Isabel was rushed into hospital to give birth to their second son. “This was our sons’ childhood,” she says. “They have loved Hanham as much as we have.”

If the garden is the pièce de résistance, the house is not too shabby either. This sense, of a grand old country home blending perfectly into its surroundings, gives Hanham its enduring appeal.

The earliest part of the building is the chapel, which dates back to the 13th century and is now incorporated into the main house, a large Tudor property with many later additions, such as Palladian windows, Victorian turrets and gargoyles.

For 200 years, Hanham belonged to the Creswicke family, prosperous local gentry, before a period of decline in the 20th century.

When the Bannermans moved in the place was a wreck, with plastic cornices and other modern excrescences, which had to be weeded out if the property was to be restored to its former glory.

For years, it was a work in progress, all higgledy-piggledy, rather than a candidate for the Ideal Home Exhibition.

“Many of our friends found the borstal-cum-bed-and-breakfast aspect of Hanham daunting,” says Julian. But though the plumbing and central heating were erratic, there was no getting away from the romantic charm of the property, with its wood-panelled halls, quirkily shaped bedrooms and Tudor spiral staircases. It is a place of magic and adventure, for adults and children alike.

Julian says that the two things he will miss most about the property are the wisteria and the Elizabethan fireplace.

“I’ve never known a fireplace that both looks so good and functions so perfectly,” he says. Leaving will be a wrench, one way and another.

The Bannermans are unusual in that they are not under financial pressure to move. But for many, the upkeep of such a home can be prohibitive: roofs and windows have to be replaced, and the heating bills read like bad jokes in Christmas crackers. The trouble is that “sensible” options for balancing the books tend to get muddied by sentimental considerations.

“We all know in life what we should be doing, but that doesn’t mean we do it,” says Ruth Watson, the presenter of Channel 4’s Country House Rescue. The show’s cavalcade of aristos with moneymaking wheezes, such as butterfly farms, has made the programme compelling viewing for lovers of English social comedy.

Luckily, not all cash-strapped owners of country houses are so eccentric. Some bring a welcome pragmatism to the task of staying put, come hell or high water, in the home of their ancestors. A hundred miles to the east of Hanham Court, in West Sussex, the Fifth Viscount Mersey – Ned Bigham to his friends – has no intention of selling up.

Bignor Park, the family seat for generations, is a magnificent Georgian property set in 1,200 acres overlooking the South Downs. It is still a family home – Lord Mersey lives there with his wife and children, while his mother has a cottage in the grounds. But it is also a commercial business.

“I had to do some serious number-crunching when I inherited the title in 2006,” he says. “My father was a lovely man who took his responsibilities to the estate and its staff seriously. He was a bit like the Earl of Grantham in Downton Abbey. But he was not always very practical. His passion was forestry and he planted many new trees on the estate. But forestry is a long-term investment: you have to wait years before it produces revenue. I needed money for extras such as gravelling the drive and maintaining the garden, neither of which is cheap.”

There is more money in weddings than trees, and it is to weddings that Lord Mersey is looking to boost his family income. Bignor Park is the only property in West Sussex licensed to hold outdoor weddings and, for £3,000 a pop, you can rent the Greek loggia and surrounding land to hold a ceremony.

It used to be just family and friends who got hitched at Bignor, but the venue is now open to all-comers. “We don’t want the whole thing to turn into a conveyor belt,” says Lord Mersey.

“We’re not offering cut-price deals if you get married on a Tuesday in February or anything like that, but we are taking the operation seriously. I have a first-class events manager and have cherry-picked the catering companies, so the quality is guaranteed.”

If weddings are the big new attraction, they are not the only source of income. The golf course option was considered by the Fourth Viscount but rejected. Yet there are five cottages in the grounds, let out commercially, which are nice little earners. A recent fashion-shoot with Emma Watson suggests that it could have a future being used as a dramatic set.

Lord Mersey works in the music industry and, although turning Bignor into a recording studio is not viable, he likes the idea of staging concerts on the estate. “I’m not thinking of gigs attracting 20,000 fans,” he says. “They already hold big concerts at Petworth and Cowdray Park. But it would be nice to host the odd boutique event.”

Scraping every last penny out of the estate is not the objective. Nor are hare-brained schemes or aristocratic follies. “We just want to do sensible businesslike things,” says Lord Mersey. “That is the best way to guarantee the future of Bignor.”

He is following a different course from the Bannermans, but he is certainly following it with gusto. ( telegraph.co.uk)

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Remote houses that call out to your soul

Remote houses that call out to your soul - If you're over the 'Daily Grind', swap it for the ever-changing life of a traditional farmer in a remote house on the magical isle of Mull.

Aeneas and Minty McKay live by the seasons. In June they shear the youngest sheep, the year-old hoggets. In July they move on to the main flock and, if the grass has come on well, they make hay.

They eat off the land and from the sea – venison, organic beef, line-caught fish, and vegetables they have grown themselves.

Their home is a magical peninsula on the south-western corner of Mull. Here they have 1,500 acres of rough grazing and pasture, two hill lochs running with brown trout, the ruins of two deserted ancient villages and deer roaming the hills.

There is more than four miles of coastline, where they can spot minke whales, porpoises and dolphins, and where white tailed eagles hang on the wind.

They have lived here since 1994, converting the farm to organic, setting up a weaving mill to use the wool from the land, and winning awards and national attention for their dedication. They had both worked with animals before.

Minty and Aeneas McKay: 'The key is to let the land tell you what to do'


Ardalanish, their 1,500-acre farm, which has four miles of coastline

Minty grew up on Mull, and Aeneas on Loch Lomond, so they have Scotland in their blood. "Sometimes we can work at the hay until after midnight, and then we collapse with a good whisky," says Aeneas.

They turned away from commercial farming to old-fashioned traditional methods, reintroducing hardy native Highland Cattle and Hebridean Sheep, well adapted to the weather and the landscape.

The animals were allowed to graze and forage freely, as wild herbivores would once have done. Long-haired and double-coated, the cattle can stay outside all year long. In the summer they run with their calves on the hill, and in winter they are brought closer to the house.

"The challenge is that it has to work economically," says Aeneas. "This is not a time-warp, or a yearning for the old days, but a forward method of sustainable organic farming on a small scale."

In winter he is out feeding the cattle with hay, whole sheaves of oats and swedes, all grown organically on the farm. Another winter job is to lift the swedes by hand.

"One of the wonderful sights that visitors in the summer always comment on is the number of birds, large and small, and the huge variety of wild flowers tumbling in the ditches and hillocks between the fields, and the cascade of butterflies," he says.

The farm looks over Ardalanish Bay. On clear days the islands of Oronsay, Colonsay, Jura and Islay can be seen. A mountainous spine through the middle rises to Ben More, over 3,000-feet high. They are far from anywhere. The ferry is an hour's drive away, and then 45 minutes to Oban.

"The key is to look at the land and let it tell you what to do," says Minty. "In the summer it is wonderful because it is light early. We get up at four or five to gather in the sheep.

"Because of the way we farm, there are incredible numbers of little birds because we have all the insects to support them."

The weaving mill happened by accident. "We used to send the wool to Wales to be made into blankets and scarves," she says.

"It seemed very exciting and we had no trouble selling them on the farm. But then the weaving mill nearby was closing and we offered to store the equipment rather than see it thrown out. We all realised the owner needed to rebuild it here."

But its success took them by surprise. The tweed is loved by Savile Row tailors and fashion houses. Every year they take an apprentice and train a new weaver.

World wool prices have doubled in the past year and there is demand from affluent China. The future looks promising.

"People think we live in the middle of nowhere and that they will find an old woman with a pipe sitting in the corner weaving, but actually we produce high-end fashions in a farmyard," says Aeneas.

"It knocks people back." Minty and Aeneas also supply organic meat to local residents and take it to farmers' markets.

Why are they selling? The land, three-bedroom farmhouse and three-bedroom cottage is on at £950,000 through Savills (0131 247 3720). They are both in their sixties and feel Ardalanish needs "new energy".

Aeneas fancies getting into second-hand books. Isn't that all done on the internet these days? "People said farming had gone downhill, there was no one interested in good organic meat, the wool industry had collapsed, and look what we have done."

That is his answer. Follow your heart and do what you believe in. It is a message which all visitors to Ardalanish take away with them. ( telegraph.co.uk )

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Secrets of America's most expensive home

Secrets of America's most expensive home - Bernie Ecclestone's daughter Petra is said to have bought the most expensive house in America at £92m. Cassandra Jardine takes a look inside

A present-wrapping room. What a perfectly lovely idea. A permanent home for those messy rolls of paper, string and tags is one of those little luxuries that we all need but never realised, until Petra Ecclestone, Bernie’s younger daughter, showed us by buying, reputedly, the most expensive house in America as her second home.

With her £56 million Chelsea home undergoing a two-year renovation, the F1 heiress can now nip off to her new pied-à-terre in LA to give a boost to her model/actress/designer career plans. With Manor House in Bel Air – on the market for $150 million (£92 million) – she has bagged the essence of the look-at-me-I’m-rich aesthetic. With 56,500 sq ft of floor space, this 1988 chateau is larger than Versailles, but considerably less classy.

There’s a tragi-comic video on YouTube of the agonisingly face-lifted vendor, Candy Spelling, taking us around the home she created for her late husband Aaron, producer of Charlie’s Angels, Dynasty and Beverley Hills 90210. Passing from one characterless, cavernous space to another, Candy titters about how the house grew as she didn’t have any idea of scale on the plans. The result is a mere 123 rooms, because Aaron knocked a whole wing off, thereby releasing parking space for 100 cars. Even so, he was able to quip: “Big? I’m still trying to find the bathroom.”

Candy Spelling has reportedly sold her mansion in Beverly Hills to the daughter of Bernie Ecclestone

Petra Ecclestone's new house

In an interview earlier this year, Petra – who sounds both fragile and determined to be a businesswoman – said that what she most likes doing with her fiancé, 29-year-old entrepreneur James Stunt, is watching TV. Should that pall, they will have a bowling alley, fruit machine arcade, barber’s shop and beauty salon, four “wet” bars and an indoor skating rink, as well as the museum Candy built for her dolls.

If, after their wedding in August, the Stunts tire of cosy suppers à deux, the kitchen can cater for 800 guests. James, an enthusiastic collector of Château Pétrus, can show them the wine-tasting room. After the meal, guests can repair to the Spellings’ pride and joy, the viewing room, with a vast screen and projectors that appear from behind pictures.

Petra will never have to battle her winter woolies into vacuum packs, because a whole floor is given over to walk-in cupboards. Clutching one of her 400 handbags, she can then descend the double staircase designed with Gone with the Wind in mind.

Is all of the above enviable or grotesque? It depends on whether you buy the dream of acquiring and flaunting extreme wealth. Taste comes into it, too. The house was put on the market in March 2009, and the gossip is that Petra may have got it for a knock-down $75 million to $85 million because it was hard to shift. Even she who has been called the “most spoiled girl in the world”, was not prepared to pay over the odds for a vast mock-up, on a smallish plot of land, with no views.

The Playboy Mansion is three doors down but, should the Stunts have been planning all-newly-weds together sessions with Hugh and Crystal Hefner, they will be disappointed. Only a couple of days ago, Crystal thought better of marrying a man 60 years her senior. There’s a danger that they may end up as lonely in The Manor as Candy Spelling, who has not been on speaking terms with her daughter Tori since Aaron died.

Houses so large that a GPS is needed to find the bedroom are not conducive to intimacy. But let’s not be too down on Petra’s new toy. Bernie Ecclestone may feel a little dwarfed by the 30ft ceilings. Petra may find her favoured colour scheme of black and gold a trifle oppressive on this scale. But there are upsides.

If the new Mr and Mrs Stunt limit themselves to 120 children, each can have a bedroom of their own. Nor will there be any shortage of places for wedding presents. Perhaps they should consider an unwrapping room as well? ( telegraph.co.uk )

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Want your kids to do well in school? Simple. Make a lot of money and get married

Want your kids to do well in school? Simple. Make a lot of money and get married - Want your kids to do well in school? Easy. Make decent money and have a steady home environment that includes mom and dad. You do those two things, and you’re well on your way to raising an educated child.

Note what I don’t mention up there: Money spent per pupil, teacher/student ratios, amount of homework given, quality of teachers, the overall curriculum and the dozens of other things educational administrators discuss when the topic of educational success comes up.

If you read between the lines, what it really comes down to is this: Give your kids a solid foundation and be an engaged parent.

By the way, I’m not just spitting out opinionated nonsense: I’ve got studies! In 2003, The Journal of Marriage and Family noted students in one-parent families fared significantly worse in math and science than students in two-parent households, and furthermore, a study that study cited showed students who lived in households with never-married single mothers did even worse.

Want your kids to do well in school? Simple. Make a lot of money and get married

And another study, by the Institute for Research on Poverty, showed a direct link between income and standardized test scores. An increase of a mere $1,000 in household income raised student test scores between 2.1 and 3.6 percent.

Money and family. A kid has those two things, he’s got all the head start he needs. Unfortunately, we can’t — or at least, don’t fully — legislate money and family, so we’re left to school administrators flailing about, trying to figure out ways to raise the educational standards.

For instance, take a look at the Hopewell Valley Regional school district, where a 45-person(!) committee is looking at homework, both the rate it’s given and the value it provides. And if the statements from HVRSD Superintendent Tom Smith are any indication, it appears homework in Hopewell is going to be cut back.

“It’s become clear, from conversations with parents, that kids are in so many after school activities, and we value developing the whole child,” said Dr. Smith. “So this homework discussion really is a discussion of what we value as a community.”

It should be noted the school district, according to Census records, has less than one percent of residents living below the poverty line, and of the households with a child under 18 living in them, over 90 percent of them are two-parent households.

So will a lessened homework schedule work there? Of course it will. Kids will probably do better because they won’t be stretched to the limit. Tough to concentrate on math problems after an afternoon of soccer and violin practice.

But imagine this “homework be gone!” idea in Trenton, where after school programs aren’t catching the kids, where there’s twice as many single parent households than married-with-children households and where 22 percent of the population is under the poverty line. (And here’s a wildly interesting stat: While 6.9 percent of married couples with school age children in Trenton are below the poverty line, 45 percent of single parent households fall below poverty level.) If homework was lessened in Trenton, I’d bet test scores and the like would also go do down.

Of course, homework is just one piece of the giant, pointless puzzle that constitutes our fight to make kids less stupid. Untold numbers of man hours and billions of dollars are poured down the education hole, and yet no one will recognize the simple fact that it just doesn’t matter. Kids with a solid home and with parents who live over the poverty line are simply better positioned to do well, and more often than not, will succeed in school.

And if you don’t believe me, run this thought experiment: Hopewell students do better than Trenton students, by every measure, from graduation rates to SAT scores. Is it because Hopewell students are inherently smarter? I say absolutely not. Switch every student at birth, and I’d bet the the numbers stay the same. The “Hopewell” kids would do well, the “Trenton” kids would not. Doing good in school is nurture, not nature, in the vast majority of cases, and if there’s no nurture at home, kids start out on the losing side.

So maybe instead of spending money on education, we should be spending money on keeping families together and making sure they have enough money in their pockets. To put it another way: I’m advocating Religious Right values (get married!) alongside lefty Commie propaganda (have to get people above poverty). In other words .... we’re doomed. ( trentonian.com )

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Sneaky Ways to Save 7+ Hours Every Day

Sneaky Ways to Save 7+ Hours Every Day - The easiest way to stop feeling so stressed? Add a few more hours to your day! Just try these tricks to carve out more time.

Save 10 Minutes

Skip the suds.Shampoo every other day (or even every three days) -- it's better for your hair, you'll save time in the shower, and thanks to the miracle that is dry shampoo, no one will even notice.

Stop the scavenger hunts.Two minutes looking for your cell phone, five minutes tearing the house apart for your keys, nine aggravating minutes searching through the pockets of every pair of pants you own to locate your wallet -- it all adds up. Save yourself the time and stress by cleaning out your wallet/purse/pockets/whatever on a regular basis and placing your keys and phone in the same spot every time you enter the house (a basket or tray in the entryway or kitchen works well).

Use shortcuts. Bookmark websites you frequently visit, create shortcuts on your desktop for applications or folders you open regularly and enter new contacts into your phone's speed dial.

Procrastinate at work. How can procrastinating save you time? Allow us to explain: If you normally get stuck spending the entire morning at the office on the phone with Chatty Kathy -- aka the sales rep who talks your ear off every time you call -- wait until the end of the day to ring her. At 5 p.m., when she's rushing to get things done so she can go home, she'll be more likely to get down to business (and less likely to gab about the new cleanse she's trying so she can lose the baby weight).

Screen. Caller ID was invented for a reason, people! So only pick up when it's someone important (like your boss and, okay, maybe your significant other) or you actually have the time to talk. As for your mom, the bank promising you a better deal on your mortgage and your best friend with her 10th crisis of the week? Call 'em back when you have time (like when you're waiting in line to return something)...or never -- it's up to you.

Save 20 Minutes

Cut commercials.Sure, you've been waiting all week to watch the new episode of Glee. But trust us, you can wait another hour. Take advantage of TiVo, DVR or your Internet connection (stations like CBS and Fox post episodes on their sites soon after they air) to watch your favorite shows -- commercial-free.

Make errands efficient. Plan to pick up your prescription between two meetings or grab TP on your way to work (if you're not too embarrassed to waltz into the office with your Charmin in hand). That way, you won't be tempted to wander around the store browsing, saving you both time and money.

Turn up the intensity. Cut your gym time in half by alternating between spurts of high-intensity cardio and slower recovery periods. Studies have shown that 20 minutes of intervals can burn just as many -- if not more -- calories than 40 minutes at a steady, mid-intensity pace, and you'll burn more calories for hours afterward. Bonus: Add a little resistance or up the incline to burn even more calories in the same amount of time.

Curtail cook time. Considering the average woman spends 46 minutes a day on food prep and cleanup, it's not hard to see why takeout and frozen dinners are staples for many households. But you can actually save money, calories and time by trying one of our quick and easy weeknight meals that'll have you sitting down to eat in 20 minutes or less.

Save 60+ Minutes

Multitask.True, in some cases doing several things at once, like trying to finish three presentations at the same time, can actually slow you down (shifting focus zaps enough time to really add up). But there are situations when multitasking can add minutes (or even hours) back on the clock, like when one or both tasks don't require much focus. Some multitasking moves that can save you time: watching your favorite shows while you work out, going through the mail while you're on hold with the cable company or throwing in a load of laundry while you wait for the oven to heat up.

Turn off personal email alerts. Checking your email every time a new message pops up in your inbox kills your focus and wastes more than the two minutes it took to read about J. Crew's 30 percent off sale -- there's also the time it takes to refocus on what you were doing just before your inbox dinged, buzzed or flashed. To stay on task, switch off the email alert setting and set a calendar alert for every hour (or half hour, if you must), reminding you to check your mail. Relax -- if someone really needs to reach you, there's this thing called a phone, and it's actually far more efficient.

Stop surfing.Ever notice how what was supposed to be a five-minute celeb gossip break can easily morph into a 45-minute sesh spent reading about the merits of the new Shake Weight? Check out RescueTime.com, a website that will monitor how much time you spend on certain sites, alert you when you've been there for too long and even block certain sites you can't help but procrastinate on (besides TheNest.com, of course).

Skip the gym. Now here's one we love. If you're working out intensely five or more days a week, feel free to cut back...to three or four. Fitness experts insist that more isn't necessarily better when it comes to exercise. Giving your body a day to recover can help you go harder and faster the next time you work out.

Set deadlines.Ever notice how your coworkers who have kids somehow find a way to get their work done by 5 p.m. every day? Believe it or not, they're not running on baby-induced adrenaline; they're just wasting less time during the day -- gossiping, online shopping, perusing YouTube-ing -- because they know they have to leave to get the kids, no matter what. Deadlines help you work much more efficiently. So even if you don't have kids, give yourself a deadline by making plans to meet a friend for happy hour or your trainer at 6 p.m. sharp. ( msn.com )

READ MORE - Sneaky Ways to Save 7+ Hours Every Day

Four Ways Your Home Can Pay You

Four Ways Your Home Can Pay You - Despite being financially stressed and worried about retirement, homeowners, by and large, continue to see their homes as a roof over their head and not a key financial asset that may improve their retirement prospects. According to research by the Society of Actuaries, only about 20 percent of homeowners plan to use their home equity to help finance retirement. Of those who do, few have thought about tapping their home's value and simply plan to sell it to generate retirement funds.

"Even for middle-income and moderately affluent Americans in their critical preretirement years (55-64), non-financial assets, principally home equity, may represent as much as 70 percent of total assets exclusive of pensions and Social Security," the report said. Tom Horgan, a Society of Actuaries spokesman and former chief actuary of the Federal Housing Administration, agrees with traditional advice that home equity should only be tapped when necessary, and when it helps achieve a specific retirement objective. In most cases, his best advice for homeowners approaching retirement is to sell their home and downsize into smaller, less-expensive living quarters that also may be closer to shopping and cultural activities. Renting an apartment also eliminates property taxes and most maintenance expenses.

"Retirees are really not looking at home equity as an attractive option for helping to fund their retirement," says another Society of Actuaries spokesman, Steve Siegal. "I think people tend to look at their houses as an anchoring point, and are kind of reluctant to mess with that. There's an emotional attachment there." While echoing Horgan's emphasis on only accessing home equity after very careful thought, Siegal adds that the study found that people were "not exploring any of the options. The point is that people should explore options and find out what's right for them."

There were slightly more than 23 million U.S. households in 2009 headed by someone at least 65 years old, according to federal housing statistics. About 80 percent of these households owned their homes, and of these, 65 percent had no mortgage or other home debt. Even with sharp housing price declines, the median value of homes owned by older people was about $150,000—over $100,000 more than they paid for it.

The best home-finance solutions, experts agree, tend to be the ones that meet an individual's specific needs. The major variables in home equity use include age, health and healthcare expenses, marital and family situation, life expectancy, current and future income streams, family assets, and estate considerations. In short, just about all significant life decisions can come into play in deciding how to deal with your home as a possible retirement asset.

There are four major types of decisions that involve your home and your future: borrowing against the value of your home, generating rental income from your home, taking full advantage of government tax breaks, and moving into a residence that cuts monthly housing expenses and is more aligned with reduced retirement income levels:

1. Loans.

Home equity loans and mortgage refinancings are rarely advised for paying basic retirement expenses, but they may make sense for special needs or one-time projects. Usually, borrowers need a reliable income stream to satisfy lenders of their ability to repay the loan. In some cases your retirement income would be enough, but you'd need to satisfy lenders that you have enough left over after paying your living expenses to service and repay the loan. Reverse mortgages do not require repayment but usually only make sense for people who plan to stay in their homes for a long time and do not intend to sell them and use the proceeds for other retirement needs. If you have a mortgage and are sure you want to downsize to a smaller home in a few years, consider refinancing your mortgage into a five-year adjustable rate mortgage. You will save a lot of money on mortgage payments and can use those savings to pay down your home loan even further. Just make sure you can sell the home before the five-year reset deadline occurs.


2. Income.

Consider renting out a room in your home to generate extra income. This may make special sense if you're still carrying a mortgage on the property. Most retirees bring home less money in retirement than when they worked, which can make carrying a mortgage very difficult. Rental income can help you pay off the mortgage and take a lot of pressure off of your retirement budget. You could even consider renting our your entire home for a visiting vacationer. It could pay for your own vacation, and tax specialist CCH says if you rent out your home fewer than 15 days a year, you don't even have to include the money you receive as gross income on your tax return.


3. Taxes.

The mortgage tax break may be reduced or even disappear as Congress wrestles with reforming the tax code and reducing budget deficits. But for now, it's the largest single tax break that individuals receive. Interest on home equity loans is usually deductible. There may also be energy credits and other tax breaks that make sense.


4. Moving.

Downsizing can be the smartest way to let your home—or in this case, your new home—pay you money. Reduced living expenses, smaller utility bills, and even lower commuting costs should be on your mind as you consider how you will balance the household budget during your retirement years. Moving closer to key shopping and cultural activities can not only save you money, but also make increasing sense as you age and your time behind the wheel of a car grows shorter. Think carefully about whether you want to rent or buy your new home. And don't forget that gains on the sale of your current home—up to $500,000 in gains for a couple—are tax-free. ( .usnews.com )

READ MORE - Four Ways Your Home Can Pay You