Williams: Pair plans for funeral costs

My husband and I are retired. He is 70 and I am 63 years old. We live on Social Security benefits and my husband's pension. We have $20,000 earmarked in our savings account for our funerals, figuring about $10,000 each. There are no life insurance policies and no other money funds. Our home is paid for and we have no bills. Which would be wiser, to pre-pay our funerals, to buy two CDs at $10,000 to be cashed when the time comes or to leave the money in our savings account? My concern is in the event one of us should have to be institutionalized, the government would take the little bit we have.

- M.R., via e-mail

I am very much in favor of prepaid funerals, given that this takes the burden off of other family members. In your case however, I would not endorse that since you seem to indicate that this $20,000 is a substantial portion of your savings. I would not tie the money up where you cannot get at it. I have no problem with the CDs because they still will be a part of your available funds, should they be needed. I understand your concern about having to pay for nursing or other services sometime in the future. That is a concern of many seniors. There are other emergencies that could develop in your life for which you would want to have the money available. I would keep the money in your own hands.

We are an elderly couple in our late 60s. My husband is a diabetic, and our insurance does not cover much of his medication, which is very costly. In order to afford his medicine, he wants to take out a reverse mortgage. He is telling me that if he dies, I would be able to stay in our home until I die or want to sell. The home would require upkeep that I am not able to do. I do not think this is the right thing for us.

- Ann, via e-mail

Are you not eligible under Medicare for the prescription help? It would seem to me that you should investigate. Reverse mortgages have a very definite place. Your husband is correct when he says that, even after you've exhausted the money that the reverse mortgage gives you, you are allowed to stay, or, if you wish, t