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Reverse Mortgage Blog

What Does Your Retirement Picture Look Like?

June 3, 2021

Picture your grandparents' retirement. Now picture your parents' retirement.

 

What did the world look like back then?  How much did a gallon of gas cost? How much did a dozen eggs cost?  How much did a bottle of soda cost?  How much did homes cost?  What were interest rates? 

 

Now visualize your retirement. Does it look the same?  What's different? 

 

If you are like me, the answer would be that everything has changed!  My future retirement will not look anything close to my parents or grandparents retirement!  Part of the difference is not just the cost of living and home prices but society is totally different today than what it was 40, 50, 60 years ago! 

 

When we think about how retirement has changed and how it looks, I would argue that the tools used for retirement are also different.  My mother was a teacher for 30+ years and receives a pension.  My grandparents lived a very modest, mediocre retirement (at best) on social security and never travelled or took any vacations at all.  So when I visualize my retirement, there is no pension plan in sight and I do not want to sit in a rocking chair for 30 years and grow old and not travel or take any vacations.  I want to live a long, fulfilling, fun retirement and I need money to do all of those items on my bucket list! 

 

So I ask myself, what tools do I need to achieve the retirement that I have always dreamed of? Well I can tell you that reducing my monthly expenses is certainly one of the most critical pieces to that equation. Let's face it, if my income is less in retirement than ultimately my expenses need to also be reduced. So I will need to get rid of my mortgage payment which is typically the largest monthly expense. On top of reducing expenses, I need cash to pay for all of the activities and trips that I want to take. The money I have saved in my 401K and my IRA are simply not enough to cover a 30 year retirement. Ultimately, that money is designed to help replace lost income in retirement. So, I need to tap into my home equity to access some additional cash to cover larger expenses in retirement. Yeah, I paid into my home during all of my working years and now it is time to pull some of that money (equity) back out. So how do I access my home equity and still not have a mortgage payment? I can't do that with a 30 year mortgage or a 15 year mortgage or a HELOC. Even if the rate is 2 or 3 or 4%, I still need to pay it back right?

 

Well, the answer is a home equity conversion mortgage. This is a tool that allows you to access your home's equity and not have to make monthly payments, bingo! You can make payments but you are simply not required to make payments. This is ultimately the most incredible retirement planning tool that exists today! Seriously...you can access your home's equity without ever needing to pay it back until you sell the house! (you still need to pay your property taxes, home insurance and HOA dues if applicable) And if you never sell your home, you never have to pay it back, your heirs simply pay it back using the proceeds of the sale of the home someday after you are gone. Oh yeah, and you do not need to pay any income taxes on the equity that you take out! (this is not tax or financial advice)

 

So what's the catch? There isn't any...seriously! OK, the catch is you must be at least 62 years old to qualify. Yes that's right for all of you who are in your 30's, 40's and 50's, you have to wait a few more years to get your home equity conversion mortgage. I can tell you now, I will get mine as soon as I turn 62 years old! This is the most powerful retirement tool that exists today and it is an unbelievable, flexible, and financially smart strategy that can increase your cash flow, overall quality of life in retirement and to improve your financial probability of success in retirement as well!

 

Call me to learn if you can qualify for a home equity conversion mortgage today! 

Fairway Independent Mortgage Corporation profile picture
Fairway Independent Mortgage Corporation
This blog is intended to educate and clear up any misconceptions surrounding reverse mortgages. I aim to provide education on what reverse mortgages are and how they actually work so more people are aware that they are an incredible retirement planning tool.
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This blog is intended to educate and clear up any misconceptions surrounding reverse mortgages. I aim to provide education on what reverse mortgages are and how they actually work so more people are a...
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