Retirement Solutions

Retirement Solutions
by Jim Doyle

Everyone knows that people are living longer. Consequently, retirement is lasting longer. This is a good thing! But, what if your retirement income is not keeping up with the extra years with which you have been blessed? What if your 401(K) was hit hard in 2007 – 2008, and has not recovered significantly? What if an unforeseen illness, or other expense has depleted savings?

The largest asset most people have is the equity in their home. Retirement Income Certified Planners (RICP) are recommending more and more that people look to the substantial equity found in their home to bridge the income gap in retirement.

Independence and a comfortable lifestyle in retirement are a top priority for many seniors. They do not want to rely on their children for financial support, nor do they want to just barely pay the bills each month. A reverse mortgage that eliminates the mortgage payment (if there is one), and/or allows access to a portion of the equity in the home, may be the perfect solution. Of course, you must continue to pay your property taxes and insurance, and maintain the home.

Significant government changes to the reverse mortgage program in recent years has addressed the problems of the past. As a government insured loan program, it is a non-recourse loan, meaning that neither your heirs, nor your estate will be burdened with any debt.

You may receive a lump sum at closing, a growing line of credit on which you pay no interest, a monthly income stream, or a combination of these. If left untouched, the line of credit will grow at about 5% a year, compounded annually. Then, if you need money in the future, it will be available to you. Not many retirement accounts perform so well!

It pays to know your options whether you are approaching retirement, or you are already there. If you own your home and it is your primary residence, have substantial equity, and at least one spouse is 62 or over, a reverse mortgage may be a tool that can help you through the retirement years.

Contact your Reverse Mortgage Specialist for information on your options.

This article first appeared in My Primetime News, August 27, 2017.

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