Retirement Planning is tricky business

Planning for a comfortable retirement is tricky business

New Reverse Mortgage

Retirement planning can be overwhelming in today’s uncertain economy. We’re trying to figure out how to use the income from our peak earning years, the 70s, 80s and 90s to pay for goods and services at today’s prices. Even though the FED has managed to keep inflation under control for the last 30 years, the costs of many of the items we use everyday have risen dramatically.

The rising costs of some common goods

Commodity 1970 1980 1990 Today
Home $23,450 $68,700 $123,000 $289,500
New Cars $3,450 $7,200 $16,950 $31,352
Gas/gallon 36 cents $1.19 $1.34 $3.80
Bread/loaf 25 cents 50 cents 70 cents $1.98
Hamburger/lb 70 cents 99 cents 89 cents


What is the retirement paradox?

Dirk Cotton at calls this the Retirement Paradox. As seniors we’re faced with the dilemma of retiring for an unpredictable number of years with unpredictable expenses and somewhat-predictable income.

Paying Uncle Sam doesn’t stop just because you’re retired

Further complicating the rising cost of goods is the small matter of Uncle Sam. If you’re like most seniors your retirement savings are in tax deferred 401(k)s or an IRA., which means when you need distributions the deferral period is over and it’s time to give Sam his cut.

Don’t forget the “tax torpedo”

For example, if it’s time to buy a new car at today’s price of $30,000 and you’re taking a distribution from your IRA. You will need to take an extra 20% or $6,000 to net enough (assuming 15% for federal income tax and 5% to California).to pay for you new car. This withdrawal could also launch the “Tax Torpedo” making a portion of your SSI subject to taxation.

The New Reverse Mortgage can keep more money in your pocket

Countless seniors have discovered the Standby Reverse Mortgage option. The Standby Reverse Mortgage works just like a traditional home equity line of credit except you don’t have to repay the borrowed funds if you elect not to . The line of credit gives you access to tax free funds that helps manage the unpredictability of your expenses and not have to pay a percentage to the government.

If you elect to repay the borrowed funds, they again become available to you in the event a need arises.

My line of credit can actually make more funds available?

You’re probably wondering why would anyone repay the money if they didn’t have to? To make more money of course!

The unused balance of the line of credit is GUARANTEED by the federal government to grow each year for the entire time you own your home., regardless of what the value of your home has done. That guarantee is courtesy of the US Government by backing the loan with its “full faith and credit”. The same guarantee you would get if you bought Treasury certificates.

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

How do I know if the New Reverse Mortgage is right for me?

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.