Are you comfortable with your investment strategies? Are you prepared to live on a budget? Have you saved enough? It’s not too late to make changes. Let’s explore strategies you (may) have at your disposal and see how easily they partner with a reverse mortgage.
As you can see, a reverse mortgage does not have to be a last resort option. In fact, all of the strategies above can tie into a partnership with the reverse mortgage product.
Professor Wade Pfau published a study in the Journal of Financial Planning about opening a reverse mortgage line of credit early in retirement and then delay using it until after the investment portfolio is depleted. This strategy allows the credit line to grow over a longer period of time before it is ultimately used, providing for more income.
In another study (again with the Journal of Financial Planning), researchers Barry H. Sacks, J.D., Ph.D., and Stephen R. Sacks, Ph.D., found that coordinating a reverse mortgage with spending down liquid assets was an alternative to taking out the reverse mortgage after other assets have been depleted. They found that accessing the line of credit in years when the market has a negative return is a better option than selling assets during a market decline to meet living expenses.
Taking these research findings into consideration, you’ll see there are many ways to use a reverse mortgage to make retirement savings last longer.
As the government continues to strengthen the rules and regulations for reverse mortgages, reverse mortgages may be top of mind when retirement planning. Let’s not forget that property values and home equity continue to be on the rise. That said, reverse mortgages are certainly an option that deserves further discussion.
If you’re interested in remaining at home, mortgage free, and want to learn more about reverse mortgage benefits — give one of our salary-based mortgage experts a call.