A recent poll revealed that among people age 44 to 75 more than three in five fear outliving their savings. Find out how a reverse mortgage can help homeowners increase their income during retirement.
A reverse mortgage can reduce financial stress
The Allianz Life Insurance Co. conducted a poll among people age 44 to 75 and discovered that 61 percent are more afraid of running out of money than they are of dying.
Despite their concerns, the majority of those surveyed (79 percent) believe their retirement lifestyle will surpass that of their parents. Among the youngest of the survey respondents, age 44 to 54, over half (56 percent) are afraid they won't have the money to cover basic living expenses once they retire. Within the same age group, 36 percent said they had no idea whether their savings were sufficient for retirement.
Planning for retirement is best started the minute you start working, but if you're in your twenties, you're probably not thinking that far ahead. Even those who were best prepared for retirement have been hit with unexpected financial hazards during the economic downturn, including reduced home values and tumbling 401(k) and investment accounts.
A reverse mortgage, an option available to homeowners age 62 and older, could ease some of the concerns of older Americans. Based on a sliding scale according to the age of the homeowner and the equity in the home, rather than income, other assets or a credit score, a reverse mortgage can provide peace of mind in a variety of ways.
Reverse mortgage proceeds can be accessed as a line of credit so that you use the money only when needed; a lump sum distribution to pay off other debts or invest; a monthly income or a combination of those methods. The loan is paid back through the sale of the home.
There are two things about reverse mortgages, which may add to borrowers' comfort level with these loans:
- The homeowners will be allowed to stay in their home, provided all taxes and insurance premiums are paid and the home is reasonably well-maintained--even if the eventual reverse mortgage loan exceeds the value of the property.
- The loan will be repaid from the sale of the property--if the loan value exceeds the sales price of the home, the lender will not be allowed to demand additional payments from the owners or their heirs.
Gather information from a reverse mortgage lender to see if this financial tool can ease your retirement fears.
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,
Next: Is Downsizing or a Reverse Mortgage Better for Retirement? >>>
RSS Feed
