Reverse Mortgage Guide

The usual idea with a reverse mortgage is to gain extra income or credit in addition to Social Security, savings, investments and other financial resources.

The Motley Fool has an interesting article which suggests that it’s smart (or “foolish” in the lingo of the site) to Beware Early Retirement Promises

Here’s a snippet — but take a look at the entire article. This is more then interesting if you have reached a certain age.

“Retiring early is a great goal,” says the article. “If your financial advisor is committed to helping you retire early and is giving you solid investment advice at a reasonable fee, then I wish you every success. But if you’ve been invited to a “free seminar” where you were encouraged to cash out your pension and 401(k) and invest in load funds in some broker’s IRA, be careful. Be especially careful if:

“The broker promised you a certain level of returns every year. (Be doubly careful if that level was over 8% or so — most firms’ compliance departments won’t allow brokers to use a higher number than that in sales literature.)

“The broker is encouraging you to abandon your workplace savings plans in favor of high-fee products like Class B or Class C mutual fund shares or annuities, or ETFs that come with huge per-trade commissions.

“The broker is telling you that you can withdraw more than 5% of your nest egg every year. (Some would say that even 5% is too much, and 4% is the largest reasonable number.)”

For more, go to:

Beware Early Retirement Promises

This entry was posted on Wednesday, August 29th, 2007 at 5:11 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.