A reverse mortgage isn’t just for homeowners short on cash! It offers a reliable funding source to secure a comfortable retirement, helping older Americans support the lifestyle they deserve.
Today, reverse mortgages are used by more than a million households as a cornerstone of their retirement strategy. One of the best features of this type of loan is that your clients can use the funds as they wish, at their discretion. Here are just some of the ways a reverse mortgage can play a significant role in retirement financial planning:
1. Eliminate traditional mortgage payments. With a reverse mortgage, monthly payments are optional. Borrowers may pay as much, as little or nothing at all, eliminating a monthly bill.*
2. Establish a “standby” line of credit. Borrowers can gain peace mind knowing they can tap into their equity as needed to alleviate financial worry. Similar to an emergency fund, they can ensure the money is there if and when they need it most. And remember, the perk of opening a reverse mortgage line of credit early is that your client may borrow more now to enjoy later.
3. Coordinate portfolios. Borrowers can use proceeds from the reverse mortgage to allow their portfolio to grow (by avoiding withdraws) and reduce the need to take distributions when the portfolio is down.
4. Postpone Social Security benefits. The maximum Social Security benefit for someone of full retirement age this year is a monthly payment of $3,345. While benefits can be claimed as early as age 62, collecting them before full retirement age may result in reduced monthly benefits for the rest of that individual’s life.
5. Finance health expenses. Out-of-pocket health costs for older Americans covered by Medicare can be astronomical. Not to mention the costs of prescription medications, hospitalizations and at-home medical care that retirees must factor in. A reverse mortgage may be a viable option to finance these expenses.
6. Fund home renovations. A reverse mortgage can be a great tool for making necessary home renovations and modifications to age in place — from widening doorways to redesigning a kitchen. If your clients plan to remain at home, but can’t make a substantial investment in these upgrades, a reverse mortgage can offer them the funds they need.
7. Cover the “extras”. The loan proceeds can be used however your clients deem necessary.
So, if their retirement plans include traveling, eating at upscale restaurants and enjoying their lives to the fullest, a reverse mortgage may afford them those luxuries.
Remind your clients of all the ways these funds can help create a more fulfilling and enjoyable future. And don’t hesitate to reach out to your Account Executive to learn how RMF can help.
*As with any mortgage, the borrower must meet their loan obligations, keeping current with property taxes, insurance, and maintenance.