The New Reverse Mortgage and a secure retirement

5 ways to a safe and secure retirement – Including one that will save you thousand$

Baby boomers agree having a safe and secure retirement is priority one. But in today’s uncertain economy, achieving that goal is challenging to say the least.

Many of us have seen our investments decimated by the recent housing crash and financial crisis, while others might find it difficult to simply save enough for retirement as they wrestle with other expenses.


A reverse mortgage might not be the perfect solution for everybody, but they can provide a wealth of relief for some retirees, according to a recent article from The Mortgage Professor. 

Retirement planning is tricky business

In a recent article, Jack Guttentag, a.k.a The Mortgage Professor, discusses five ways a reverse mortgage can ease the retirement of older homeowners, including using a Home Equity Conversion Mortgage to eliminate existing mortgage debt. 

The 5 Strategies

  1. “Many homeowners today choose to retire, or are obliged to, before they have fully paid off their mortgage,”

Guttentag writes. “With their income reduced, the required monthly mortgage payment can become heavily burdensome.” Having a source of funds that is exempt from federal and state income taxes keeps the tax collector away from your retirement 401ks and IRAs.

Did the housing bubble cause you to delay retirement?

    2. The New Reverse Mortgage can help you delay drawing Social Security –

By delaying social security until you reach 70 results in a significantly higher monthly draw.  A typical senior who could draw $1,350 a month at age 62 would see the draw increase to $2,376 at age 70.

Create your very own personal retirement paycheck

   3. Receive guaranteed tax free income for as long as you live in your home –

The New Reverse Mortgage tenure payment option can provide cash flow for a set period (term) to meet temporary medical expenses like home health care or for a lifetime (tenure) to ease the burden that reduced income can put on your lifestyle.

The Retiree’s Equity Line of Credit – Everyone needs a Plan B

4. Create a “rainy day” fund that is guaranteed to grow –

The reverse mortgage credit line can be used as a reserve fund to protect against outliving one’s money or to pay property taxes and insurance with tax free income. The Retiree’s Equity LIne of Credit (RELOC) is guaranteed to when you’re not using it.

5. Keep more of your retirement savings in your pocket and not Uncle Sam’s

If your retirement funds are tied up in 401ks or IRAs, those funds will be subject to taxation when withdrawn. Funds from your reverse mortgage are not considered income and not subject to taxation, which over the life of the loan will save you thousands of dollars. Paying the taxes due on your IRA/401k withdrawals will also save you from a double dip on those taxes. (Consult with your financial planner or CPA for details) 

 The New Reverse Mortgage isn’t for everyone…but it could be!

If you’re still wondering if a Reverse Mortgage is the right solution for you but you’re not ready to sit down with one of our Reverse Mortgage Experts, then we’ll be happy to mail (or email) you Use Your Home to Stay at Home which is the official federally approved consumer booklet for those considering a reverse mortgage.


Some of this information first appeared