Acknowledging that May is "Older Americans Month," the Consumer Financial Protection Bureau (CFPB) highlighted their efforts to help guide seniors through their financial eyes by creating an Office of Financial Protection for Older Americans.
With largest ever generation of Americans now in their sixties, the office will be focused on how the CFPB can effectively serve this large segment of the population. Mandated by the Dodd-Frank Act, the new office must be active by January 12, 2012.
According to a statement, the office will strive to help older Americans address some of the unique financial opportunities and challenges they face, including:
* Many older Americans live on fixed incomes with limited savings to cover unexpected medical or other expenses. People need access to reliable and relevant information and advice to help make their savings stretch farther.
* Unfortunately older Americans are often the targets of investment scams such as Ponzi schemes and illegal offshore investments. Knowing how to spot “fraudsters” can often be challenging, especially when they have been referred by a friend or family. The CFPB has been charged with helping to educate older Americans to avoid unfair and deceptive practices.
* Americans aged 62 and older are eligible for reverse mortgages. If you are over 62 and own a home, you can borrow against the equity of that home in small amounts over time. Repayment is due when you no longer own the home or are absent for 365 days. This can help create a steady income during retirement, but it creates a large debt load. Reverse mortgage borrowers need to understand and be prepared for that risk.
By highlighting reverse mortgages, the CFPB has indicated that the program will be a focus of the new office, especially in terms of disclosures that are presented to seniors to help them understand the potential issues with borrowering against thier home.
In his proclamation honoring Older Americans Month, President Obama said, "Having lived through many of our Nation’s most challenging times, older Americans have shaped the story of America and secured the promise of our future. We are privileged to recognize these treasured citizens during Older Americans Month, and honor both the impact they have made and their accomplishments yet to come."