Senior Home Buying Example: Qualifying For An Asset Depletion Loan
As an example, suppose retiree Michael has $1,000,000 in his 401 and he has not touched it.
Michael is not yet 70ÃÂ½, the age at which the IRS requires account owners to start taking required minimum distributions from 401s.
He is living off Social Security income, along with income from a Roth IRA.
To qualify Michael for a mortgage, the lender uses 70 percent of the 401 balance, or $700,000, minus his down payment and closing costs.
Note: Fannie Mae also allows borrowers to use vested assets from retirement accounts for the down payment, closing costs, and reserves.
Lets say that after down payment and closing costs, Michael is left with $630,000.
Assuming a 30year mortgage, that amount of $630k can then be used to gradually pay for his mortgage over the next 360 months. That would give him $1,750 a month to put toward a housing payment.
- Amount in 401 = $1,000,000
- Funds left after down payment and closing costs = $630,000
- Monthly mortgage budget = $1,750
Though it is not a separate loan type, lenders sometimes call this an asset depletion loan or asset based loan. And borrowers may still count income from other sources when they use assets to help them qualify.
Michael could use the asset depletion method from his untouched 401 combined with the income he is already receiving from Social Security and his Roth IRA to qualify and borrow as much as possible.
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Helping Seniors Stay Active
Another way the government offers health benefits for seniors is by encouraging active living. The government provides tips and guidelines for seniors. They also run the Ontario Senior Games, for athletes 55 and over.
Most communities provide active living, health, and wellness programs. Some of their program offerings will be tailored for seniors. Some may even offer specialized programming for people with conditions like Alzheimers.
You can visit your local Seniors Active Living Centre to find out more about what they offer. The website 211ontario.ca also offers local listings.
Higher Tax Exemption Limit
For income tax calculation purpose, the Income Tax Department considers 60 as senior citizens age and 80 as very senior citizens age. In case of a resident senior citizen , income up to Rs 3 lakh is exempt from tax, income from Rs 3 lakh to Rs 5 lakh is taxed at 10%, from Rs 5 lakh to Rs 10 lakh at 20%, and above Rs 10 lakh at 30%. In case of a resident super senior citizen , income up to Rs 5 lakh is exempt from tax, income from Rs 5 lakh to Rs 10 lakh is taxed at 20%, and above Rs 10 lakh at 30%. The amount of income tax and the applicable surcharge shall be further increased by education cess and secondary and higher education cess totalling 3 per cent of the total tax payable.
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National Programme For The Health Care Of The Elderly
Launched in 2010, the National Programme for Health Care for the Elderly promotes a preventive case scenario for senior citizens. In order to provide free or highly subsidised services to senior citizens, various community centres such as Community Health Centres along with Primary Health Centres and Sub-centres were established.
Computation For The Senior Citizens Discount
In the Philippines, senior citizens are free from paying the Value Added Tax . To calculate VAT exempt sales, you must divide the selling price by the applicable VAT rate. An example of a calculation is shown in the following scenario:
A senior citizen bought a product that is worth Php 500 with a VAT Rate of 12 %. The formula for the computation would be:
Selling Price ÷ VAT Rate = VAT Exempt Sales
Php 500 ÷ 1.12 = Php 446.43
Remember that on top of the VAT exempt sales, all products and services purchased by senior citizens will also get 20% off. In this case, VAT exempt sales should be multiplied by 20% to determine the discount. The formula for this is:
VAT Exempt Sales x 20% = Senior Citizen Discount
Php 446.43 x 0.20 = Php 89.29
Finally, the VAT-exempt sales should thus be subtracted by the senior citizen discount in order to determine the chargeable amount:
VAT Exempt Sales Senior Citizen Discount = Billable Amount
Php 446.43 Php 89.29 = Php 357.14
IMPORTANT NOTE: The Senior citizen law applies anywhere in the Philippines. It doesn’t matter where the senior citizen resides as they can get these discounts and perks as long as they are in the country. Also, senior citizens are not allowed to have double discounts in an establishment. They can only use their discount perks once every day per store.
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What Is Not Covered
The following are not covered under the Coverage for Seniors program:
- claims for benefit expenses incurred prior to the effective date of coverage
- claims for benefit expenses received by Alberta Blue Cross more than 12 months after the service was provided
- services covered by the AHCIP
- charges for drugs supplied directly and charged for by a physician, with the exception of allergy serums
- registration, admission or user fees charged by a hospital
- drug products not listed in the Alberta Drug Benefit List ask your pharmacist or physician if your prescribed medication is on this list
- semi-private or private hospital room
- travel insurance for emergency hospital and medical expenses outside of the province or country
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Senior Assistance Programs $3000
One assistance program for seniors on social security holds the key to unlocking doors to numerous government benefits. However, it has a $3,000 resource limitation, plus a ceiling on countable income.
Supplemental Security Income recipients may qualifyautomatically for other helpful entitlements with entwined eligibility. Therefore, prepare to meet the critical criteria.
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Benefits Pradhan Mantri Vaya Vandana Yojana
- The PMVVY scheme offers the beneficiaries assured returns of 8% per annum on their deposits.
- The returns or the pension is paid for ten years, and the beneficiary can choose the tenure of payment.
- Individuals can invest a minimum of Rs. 100 and a maximum of Rs. 15 lakhs in PMVVY pension scheme.
- In the event of the individual’s death before the end of the scheme, the principal amount is credited to the nominee’s account.
- Individuals investing in PMVVY can exit from the scheme prematurely only in the event of critical illness. However, in such cases, a 2% penalty will be levied.
Programmes Admissible For Assistance Under The Scheme
What Is The Safest Investment For Seniors Citizens
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Senior Citizen Perks That You Should Be Aware Of
Because of its many rules and circumstances, the Philippine senior citizen act may be difficult to understand for the general public.
If you have parents or family members that are already in their senior years, it’s important to learn as much as you can about your senior loved ones so that you can prevent misunderstanding and frustration. That is why we collected some reminders about the senior citizens’ benefits:
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Find Out If You Or Your Children Are Eligible For The Wic Program
If youre applying for yourself, you must be at least one of the following:
Within six months of having given birth or pregnancy ending
If youre applying for your children, they must be under 5 years old.
You must meet other WIC eligibility requirements based on your income, your health, and where you live.
Help With Household Chores
If youre struggling to clean your home, it may be possible to get help for getting those chores done. According to the Older Americans Act, many caregiving agencies will offer help with household chores as part of their home care services.
These chores can include cleaning, laundry, cooking, trips to the grocery store, and more. Not all services will be free, but agencies usually do offer discounts.
What you get: Low-cost or free home care and moving help
Beneficiaries: Those over 60 or disabled
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What Is The Senior Citizen Savings Scheme
The Senior Citizens Savings Scheme is a 2004 Central Government scheme that targets the welfare of Indias senior citizens. You can create an SCSS scheme account at the nearby post office.
Since you can create an SCSS account even at a Post Office, the scheme is also known as the Post Office Senior Citizen Saving Scheme.
A Senior Citizen in India is a resident who was at least 60 years old but not yet 80 years old at any time during the previous year.
The Government via the Ministry of Social Justice & Empowerment provides an array of welfare services to the senior citizens of India ranging from social security schemes and tax benefits to travelling concessions.
This is eight
The Senior Citizen Savings Scheme is a government-backed social security program. Senior Citizens in India can invest a lump sum in the scheme, either alone or with others, and get regular income and tax breaks in return.
The Government Savings Promotion Act of 1873 enables the Central Government to frame Savings schemes to promote a saving habit amongst the citizens. The SCSS is one such scheme.
What Is The Senior Citizen Age In The Philippines
The senior citizen age in the Philippines is 60 years old and above. This is based on the Republic Act 9994, commonly known as the Expanded Senior Citizens Act of 2010.
Under R.A. 9994, all Filipino residents 60 years or older are automatically entitled to benefits and privileges, as granted by law. This also extends to elderly dual citizens who have resided in the Philippines for at least six months.
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Low Income Home Energy Assistance Program
Energy costs can become a significant financial burden for seniors or lower-income households. The U.S Energy Information Administration says households spend nearly $ 117 each month on home energy bills.
Well, the price may differ from one State to another. For example, if you stay in Connecticut, you need to spend almost $162 every month on a home energy bill, but staying in Columbia may cost you less.
You have to pay $89 as a home energy bill in Columbia each month. The Low-Income Home Energy Assistance Program provides federally funded assistance to senior adults. It helps manage energy bills and minor home repairs related to energy.
However, LIHEAP is not responsible for covering all your homes energy bills every month. It depends on various factors like the location of your house, the size of the family, and income.
Here’s A List Of Some Of The Most Useful Facilities And Benefits Available To Senior Citizens In India To Ease Their Financial Burden
senior citizensET WealthLOWER TAXTax laws are relaxed for the them to ease their financial burden.***insuranceTRAVEL DISCOUNTSSenior citizens can avail of various discounts on fares.Air travelRail travelBus travelHIGHER INTERESTThey get higher interest on investmentsSenior Citizen’s Saving SchemeSPECIAL SCHEMESThe government has several senior citizen welfare schemes.PensionLOWER CHARGESTheir telephone bills are subsidisedOTHER BENEFITSBanks, hospitals, etc. make special allowances for them
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Senior Citizens Benefits In The Philippines
A law in the Philippines, Republic Act 9994, outlines the rights and advantages that all Filipino seniors have. Elderly Filipinos above the age of 60 are eligible for a 20% senior citizen discount and are excluded from the value-added tax on relevant products and services for their own use. The best thing about this? Both cash and credit card payments are eligible for these benefits!
Below is the list of discounts and VAT exemptions that our senior citizens may enjoy in the country:
Many additional benefits are available to the Filipino elderly, other than the 20% discount for senior citizens and the exclusion from VAT on purchases made by them. Some of the mandatory benefits for senior citizens are:
Discounts in special programs for senior citizens
Express lanes for senior citizens in all government offices and commercial establishments
Free flu and pneumococcal vaccinations for indigent senior citizens
Free medical and dental services in government facilities
Retirement benefits from SSS, GSIS, and Pag-IBIG
Scholarships and financial assistance for seniors education in public and private schools
Training fee exemption on socio-economic programs
Avoiding Tax At Source
Senior citizens who maintain fixed deposits with a bank need to be careful. If the interest income earned on a bank deposit exceeds Rs 10,000 in a financial year, the banks deduct tax at source of 10 per cent on the entire interest income. In case of company FDs, TDS is applicable when interest income exceeds Rs 5,000 a year. To avoid TDS and in instances where the income is less than the exempted limit, one can fill a bank declaration. This benefit is applicable to all, but the declaration has to be in a different form. As a senior citizen, if the total income in a financial year is within the exemption limit, Form 15H may be submitted by the depositor to the bank for not deducting TDS. Remember, if the deposits are for more than a year, one has to submit these forms every year ideally in April.
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Senior Citizens’ Welfare Fund
Launched by the Ministry of Social Justice and Empowerment, this fund includes unclaimed amounts from small savings and savings accounts in the Central government schemes. It aims to make seniors financially stable for their overall welfare and health care.
This scheme focuses on those seniors who have made significant contributions in their disciplines and recognizes their efforts. It was upgraded to the National Award in 2013, and since then, awards have been granted under thirteen categories.
Getting Help With Medicare Costs
Life is expensive, and unexpected costs can throw a monkey wrench in an already tight budget. Dont let your healthcare expenses zap your budget even more. Call our experienced Medicare experts today, or fill out our online quote form. Our dedicated team will find the best Supplement plan for you and your budget so you can sleep soundly at night.
Your Guide To Benefits For Seniors Over 65
Are you looking for discounts or government benefits for seniors over 65?
It can be difficult to find many of these senior citizen benefits.
Whether youre looking for government programs or financial assistance, weve started the research for you.
In this article, we have compiled a list of government benefits and discounts that may be available for seniors in America today.
Tax Counseling For Elderly
The Tax Counseling For Elderly program is designed to provide free tax assistance to senior people above 60 years old and are not working.
The IRS certified volunteers would help you prepare basic income tax returns and electronic filing at various community locations. The community locations can be banks, libraries, local malls.
You dont need any application to benefit from this program. You have to locate the nearest TCE site for services. Most of the TCE sites are operated by AARP Foundations Tax-Aide program.
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