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Homeless and Healthy at Age 83?!

By Susan B. Geffen

I feel so bad when someone comes into my office and has run out of money. It is a matter of having a roof over one's head, food and sometimes necessary physical support.

On Friday, I had an 83 year old woman come in who, in December, is quitting her job as a concierge at a well known exclusive hotel chain. It pays $1,600.00 a month. She gets $1,500.00 a month from Social Security. Her rent is $1,600.00. She has $85,000 to her name. She has no family or friends to help her.

If nothing goes wrong, she will be able to continue her lifestyle for a little over 5 years assuming she burns $1,200.00 a month on food and insurance supplements and car insurance, etc.

The obvious solution is to cut her rent in half; that will give her 14 years to burn through her savings. This assumes that she will not need any assistance. That is a BIG IF.

Nonetheless, it seems obvious that she must bring her rent down to around $800.00 a month. This way if she does need assistance in the next few years, she will still have some savings that would provide her with an opportunity for an inexpensive board and care.

Remember from my previous newsletter, if you become eligible for SSI while in an assisted living facility, the facility must accept the SSI rate and you cannot be evicted.

Where will my client find suitable housing for $800.00 a month?

It used to be that I could refer a client to Section 8 housing. However, now that is not a viable option in her neighborhood (Marina Del Rey) or in any neighborhood within at least a 50 mile radius.

In most cases there is a very long waiting list. Here in the city and county of Los Angeles, Section 8 is closed "Due to a lack of Federal funding, the Housing Authority City of Los Angeles and County ....is not issuing any new vouchers at this time."

I called the Orange County Housing Authority. It closed it Section 8 housing 3 years ago.

In an attempt to uncover all options, I emailed my dear friend and very trusted colleague at the Culver City Senior Center, Darren Uhl.

His response? "I have had at least 20 of these inquires this week." He referred me to a site that puts older adults together with homeowners, but there are only 3 houses listed.

My advice to the very scared woman who sat before me was to move to Riverside County or any other county where a one bedroom apartment would be much less. This is a matter of life or death.

What will happen to her even if she is able to hang in there for another 5 years at the current status quo? There is no option. If she is not medically in need of a nursing home, she cannot go onto long term Medi-Cal and to get her food and shelter for free.

She will be a homeless healthy 87 year old.

Had she cut her expenses in half 10 years ago she would have been able to have a much healthier cushion. If she rented for $900.00 instead of $1,600.00 when she was 73, she would have been able to save another $84,000 for a total of $170,000.

There is much to be said about living for the day. Truly, we do not know what tomorrow may bring and we must enjoy our moments. We also have to reasonably peak our head out every once and awhile and not let a catastrophe silently creep upon us.

Remember not to be afraid of using your equity in your house with a reverse mortgage. If my client had owned a house or a little condo, she would be able to generate more money and not be in a panic.

She would not have to pay back principle or interest. If she had an existing mortgage, she would stop paying that as well. If you need a referral to a trustworthy reverse mortgage broker, let me know.

I do believe that in that industry it is the people involved and not the product that can be harmful.

Lastly, you may have read an article in the Los Angeles Times that discussed "peer to peer lending" or a caregiver loan. It allows children and grandchildren to pool resources to provide a flexible line of credit at interest rates below what lenders charge.

From an elder law perspective, these types of family reverse mortgages do not impact the look back period for Medi-Cal. In other words, any payments made to the children will not constitute gifts. Here is a link to a company who will put together these agreements for families.

I didn't mean to scare anyone. I just want you all to be safe.