Today's retirees didn't have the same access to IRAs and 401ks early on in their careers as workers today. As such, many kicked off their golden years without much in the way of personal savings, and those without pensions are forced to live mostly on Social Security -- a program that only pays the average senior about $1,500 a month.
As such, many older Americans rely on the equity they have in their homes as a means of accessing money as needed. That's exactly why reverse mortgages have been pitched for years as a viable solution to seniors' financial woes.
A reverse mortgage, as the name implies, lets homeowners receive money based on the equity they have in their homes rather than pay a lender on a monthly basis. At face value, it seems like a great option for cash-strapped retirees.
But reverse mortgages have their share of drawbacks. They come with hefty fees, they're difficult to understand, and they don't actually offer any relief with regard to home maintenance costs and property taxes, thereby putting seniors who borrow this way at risk of losing their homes anyway.
And the nature of the reverse mortgage industry, consisting heavily of salespeople who prey on seniors by appealing to their fears and pushing a product that, in many cases, is not nearly as helpful as it might seem to be, has long been blasted as predatory.
One presidential candidate clearly isn't happy about that and wants to see some changes. In February, Mike Bloomberg revealed a plan to shore up retirement for seniors that includes Social Security reforms, expanded Medicare coverage, and protection against reverse mortgages.