Most people are completely unprepared to retire because they haven’t planned very well for it or frankly the rescission dug a big hole in their investments. And it’s amazing to know that 10,000 people a day are turning 62 and in most cases, totally unprepared for retirement and this giant group of Boomers is referred to as the “Silver Tsunami”.
As they age and move into their “Golden Years”, their number one concern is running out of money. People are living longer and the reality of out-living your savings is frighteningly real.
However, more Financial Advisers are suggesting to their clients to consider using a Stand By Reverse mortgage to extend the longevity of their savings and investments and it’s a very smart move.
The Dallas Morning News featured a column recently that discussed this important strategy for making, money, last.
Here is part 3 of a summary. The other parts of this article can be found in my previous, 2 posts.
Reverse Mortgage Line of Credit: A ‘Powerful’ Retirement Tool
Posted ByJason OlivaOn October 26, 2015 @ 5:01 pm In News,Retirement,Reverse Mortgage
“In another scenario, Burns notes a couple that recently lost their jobs before they retired. The couple, aged 65 and 67, has $2,000 per month in Social Security benefits; only $70,000 in savings; and own a home worth $200,000.
“If they do nothing, their lifetime consumption will be $20,000 a year in constant purchasing power,” Burns writes. “But if they take out a reverse mortgage line of credit, their lifetime annual consumption will be $25,900 a year. That’s a 29.5 percent increase.”
In a previous column, Burns wrote about what he calls “the thinness of wealth,” specifically about how 80% of all households have more money in home equity than they do in their combined financial assets and retirement accounts.
“Think about that—80 percent,” Burns writes. “It tells us that whether it is a reverse mortgage, downsizing, right-sizing, renting or living in a trailer, our shelter decisions will make the difference between retirement squeeze and retirement comfort.”’