Seniors are living longer than ever, a trend that’s expected to continue in decades ahead.
In fact, a recent report from the National Center for Health Statistics found that a 65-year-old American can expect to live to the age of 84.3—or for 19 years past the age of retirement
Because seniors are living longer, they face the challenge of extending their retirement savings. With a recent U.S. Government Accountability Office study finding that households aged 65 – 74 have an average of $148,000 in retirement savings (or $649 to draw on monthly), it’s clear that solutions are needed to help seniors live comfortably during retirement.
Fortunately, there’s already an option that can help seniors supplement retirement savings while providing a financial nest egg: a reverse mortgage.
Reverse mortgages provide seniors with an infusion of cash
Reverse mortgages let Americans aged 62 and older convert part of their home equity (wealth) into cash without selling their home. This can be an effective way to supplement monthly expenses or help prepare for unexpected costs (such as medical bills).
With reverse mortgages:
- The lender pays you using a percentage of equity that you’ve built up from years of making mortgage payments. The money you receive usually isn’t taxable, and it generally doesn’t affect your Social Security or Medicare benefits.
- You’re not required to pay back loan balance while you live in the home. If you pass away, sell the home, or the home isn’t your primary residence for more than 12 months, the loan comes due. This means you or the estate must repay the loan.
- You’re able to keep the title of your home. This means you’re responsible for paying property taxes, homeowner’s insurance and other expenses.
Reverse mortgages can be a good option for seniors who want to supplement their income or have extra money available for a “rainy day.” To learn more about this loan, please contact me today.