Retirees may own houses and cars, but that doesn’t mean they couldn’t also use a loan. From paying for emergency expenses to providing tax benefits, loans can be beneficial to older Americans for many reasons.
“It’s not uncommon for retirees to realize they need to get their hands on a lot of money,” says Ric Edelman, founder and executive chairman of advisory firm Edelman Financial Services in Fairfax, Virginia. Seniors may have an expensive medical emergency, discover their home needs a major renovation or decide to help an adult child with expenses.
Other times, seniors may pursue a loan for a better interest rate or to maximize tax savings. David Kanani, founder of financial firm Kanani Advisory Group in Irvine, California, says he most often sees retirees applying for loans to refinance their mortgage, to downsize to a smaller home or to buy a second home.