The Allianz Life "Reclaiming the Future" survey of more than 3,200 Americans divided survey participants into five personalities based on their responses. The largest group, at 32 percent of all respondents, was labeled "overwhelmed", feeling unprepared and without confidence about their ability to plan for retirement.

The next largest group of respondents, at 27 percent, was labeled "resilient" because these individuals, while not financially ready for retirement, have recognized the need for planning and are beginning to take steps to improve their retirement outlook.

Reverse mortgages and retirement

While the respondents in this survey are too young for a reverse mortgage, which is available only to homeowners age 62 and older, those who are planning for retirement should consider the possibility of using a reverse mortgage for income in the future. Lenders have recently reduced the fees associated with a reverse mortgage and the FHA has introduced the "HECM Saver" reverse mortgage which also carries lower upfront costs.

Homeowners age 62 and older can access the equity in their home based on a sliding scale depending on their age and the available equity. Some homeowners opt to pay off their current mortgage with a reverse mortgage in order to eliminate a mortgage payment. Others choose to borrow more against their equity to pay off other bills or to provide a steady monthly income.

Homeowners can gather information about reverse mortgages from reverse mortgage lenders even before they are eligible for this type of loan in order to incorporate this possibility as part of their retirement plans.

Reverse mortgage for purchase

Most people assume that a reverse mortgage is only available for seniors who want to stay in their current home, but consumers can also use a reverse mortgage for purchase if they want to downsize or relocate. The homeowners sell their current home and use the profit from the sale to make a substantial down payment (or a cash purchase) on their next home. At the same time, they can close on a reverse mortgage on the new home in order to have access to some of the cash they invested in the property.

Consulting with a reverse mortgage lender can ease some of baby boomer's retirement concerns.

Michele Lerner

Michele Lerner is a freelance writer with twenty years of experience writing articles and web content for newspapers and magazines on topics related to real estate, personal finance and business. Her clients include The Washington Times, Urban Land Magazine, NAREIT's Real Estate Portfolio, and numerous Realtor association publications. Michele's first book, "HOMEBUYING: Tough Times, First Time, Any Time" is available now at Amazon.com or from www.MicheleLerner.com.

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