The New Reverse Mortgage…When staying in your home is your first priority

The best time to plan your retirement is before the boss does!

Getting a pink slip along with your paycheck can be devastating, for baby boomers it can be life changing.

Call it what you like but at 65 Norm knew a pink slip meant he had just met “involuntary retirement”

involuntary retirement

There aren’t many options for seniors facing involuntary retirement

Norm’s first thought was how to keep his home until he figured out his next retirement plan.  The job market for software engineers his age was almost non-existent. He knew his retirement plans would have to change but his foremost concern was staying in his home.

Related: 25 retirement solutions using The New Reverse Mortgage

Norm’s Retirement Dilemma

Cessation of work is not accompanied by cessation of expenses. – Cato

He could take his Social Security now, but had hoped to wait until he was 66 or 70. His pension from a previous job wouldn’t kick in until he was 65 as was the case for Medicare.

Norm knew he could pick up some contract jobs to help but he was most concerned about:

1) Staying in his home

2) making his mortgage payment of $1600

3) Paying for medical insurance until he was eligible for Medicare.

Related: Unlocking your trapped equity is the key to a secure retirement

He considered rolling over his 401(k) and taking distributions from it but it had been performing so well he hated the idea of tapping it now. Like many people his age he was also worried about outliving his money. His severance package would carry him for a few months, but that was a short term solution to a long term problem.

Related: Easing the “retirement squeeze”

Reverse Mortgage to the Rescue!

Let me explain…

“I never thought I’d be talking to you guys” Norm said when we first met. “I’ve seen the TV ads with their celebrity spokesman but I thought they were a little cheesy, so I never paid much attention. Staying in my home is my first priority.”

Related: Because everyone needs a Plan B

Fortunately Norm had options. Paying off his current mortgage would save him a little over $1600/mo*. He chose taking a guaranteed payment for 5 years until his pension, Social Security and Medicare had all kicked in.

Related: Create your own personal retirement paycheck

Norm’s new retirement plan

Home Value

Rev Mtg

Amount

Mo. Pmt*

Retirement Paycheck

(60 months)

Equity

Reserve

$750,000

$223,000

$0*

$1160

$466,000

* Homeowner remains responsible for payment of property taxes, homeowner's insurance and property maintenance 
Numbers are approximate and for informational purposes only

Related: Choosing the right reverse mortgage lender

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.


From the desk of Greg Cook

greg@reverselendingexperts.com; 951.265.4532​